LION ELECTRIC ANNOUNCES SECOND QUARTER 2024 RESULTS
Q2 2024 FINANCIAL HIGHLIGHTS
- Revenue of
$30.3 million , down$27.7 million , as compared to$58.0 million in Q2 2023. - Delivery of 101 vehicles, a decrease of 98 vehicles, as compared to the 199 delivered in Q2 2023. Less vehicles were delivered due to the impact of the timing of
EPA rounds and the continued delays and challenges associated with the granting of subsidies related to the ZETF program. Deliveries were also impacted by a slowdown in the Company's production cadence due to the integration of its Lion MD batteries onto its vehicles and the continued ramp-up of production of the Lion5 and LionD platforms. - Gross loss of
$15.2 million , reflecting higher manufacturing costs due to the introduction of new products and to the impact of lower sales volume, as compared to gross profit of$0.4 million in Q2 2023. - Net loss of
$19.3 million , as compared to net loss of$11.8 million in Q2 2023. - Adjusted EBITDA1 of negative
$20.6 million , as compared to negative$9.7 million in Q2 2023. - Additions to property, plant and equipment of
$1.3 million , down$17.8 million , as compared to$19.1 million in Q2 2023. - Additions to intangible assets, which mainly consist of vehicle and battery development activities, amounted to
$10.6 million , ($9.4 million net of government assistance received), down$7.3 million as compared to$17.9 million in Q2 2023.
________________________________ |
1 Adjusted EBITDA is a non-IFRS financial measure. See "Non-IFRS Measures and Other Performance Metrics" section of this press release. |
BUSINESS UPDATES
- More than 2,100 vehicles on the road, with over 28 million miles driven (over 46 million kilometers).
- Vehicle order book2 of 1,994 all-electric medium- and heavy-duty urban vehicles as of
July 30, 2024 , consisting of 190 trucks and 1,804 buses, representing a combined total order value of approximately$475 million based on management's estimates. - LionEnergy order book of 394 charging stations and related services as of
July 30, 2024 , representing a combined total order value of approximately$9 million . - 12 experience centers in operation in
the United States andCanada . - Commercial launch of our Lion8 Tractor truck at the ACT conference in May
- Successfully completed the final certification for heavy duty Lion battery packs, which will be integrated into our Lion8 Tractor trucks
On
- a reduction of the Company's workforce by 30% (representing approximately 300 employees) across
Canada andthe United States and impacting all areas of the organization, which is expected to be implemented over the upcoming days and will result in mostly temporary lay offs (such initiative being expected to result in annualized costs savings for the Company of up to approximately$25 million , assuming that employees temporarily laid off are not re-hired); - adjusting the Company's truck manufacturing operations in light of a lower market demand than initially anticipated for all-electric trucks, including by introducing a batch-size manufacturing approach for trucks directly aligned with the Company's order book;
- the creation of a new product line through which the Company will sell its battery packs to third parties;
- a process to optimize usage of the Company's facilities, including the potential sublease of a significant portion of its Joliet Facility and certain experience centers throughout
Canada andthe United States ; and - the implementation of an overall efficiency improvement plan to further reduce other operational expenses, such as third-party logistics costs, consultant costs, and other selling and administrative expenditures.
________________________________ |
2 See "Non-IFRS Measures and Other Performance Metrics" section of this press release. The Company's vehicle and charging stations order book is determined by management based on purchase orders that have been signed, orders that have been formally confirmed by clients or products in respect of which formal joint applications for governmental programs, subsidies or incentives have been made by the applicable clients and the Company. The order book is expressed as a number of units or a total dollar value, which dollar value is determined based on the pricing of each unit included in the order book. The vehicles included in the vehicle order book as of |
On
"Despite the important challenges the electric vehicle market is currently facing, Lion has been able to realize major headway in the recent rounds of the
SELECT EXPLANATIONS ON RESULTS OF OPERATIONS FOR THE SECOND QUARTER OF FISCAL YEAR 2024
Revenue
For the three months ended
For the six months ended
Cost of Sales
For the three months ended
For the six months ended
Gross Profit (Loss)
For the three months ended
For the six months ended
Administrative Expenses
For the three months ended
For the six months ended
Selling Expenses
For the three months ended
For the six months ended
Restructuring Costs
Restructuring costs of
Finance Costs
For the three months ended
For the six months ended
Foreign Exchange Loss (Gain)
Foreign exchange loss (gain) relates primarily to the revaluation of net monetary assets denominated in foreign currencies to the functional currencies of the related Lion entities. For the three and six months ended
Change in Fair Value of Conversion Options on Convertible Debt Instruments
For the three and six months ended
Change in Fair Value of Share Warrant Obligations
Change in fair value of share warrant obligations moved from a gain of
Change in fair value of share warrant obligations moved from a gain of
Net Loss
The net loss of
The net loss of
Continued Listing Standard Notice from the
The Company also announced that on
In accordance with applicable NYSE rules, the Company notified the NYSE of its intent to regain compliance with Rule 802.01C and return to compliance with the applicable NYSE continued listing standards.
The Company can regain compliance at any time within a six-month cure period following its receipt of the Notice if, on the last trading day of any calendar month during such cure period, the Company has both: (i) a closing share price of at least
The Company is considering all available options to regain compliance with the NYSE's continued listing standards, including, but not limited to, taking actions that are subject to shareholder approval no later than at the Company's next annual meeting of shareholders.
The Notice has no immediate impact on the listing of the Company's common stock, which will continue to be listed and traded on the NYSE during such cure period, subject to the Company's compliance with other NYSE continued listing standards. The Common Stock will continue to trade under the symbol "LEV," but will have an added designation of ".BC" to indicate that the Company currently is not in compliance with the NYSE's continued listing requirements. If the Company is unable to regain compliance during the cure period, the NYSE may initiate procedures to suspend and delist the Common Stock
Furthermore, the Notice is not anticipated to impact the ongoing business operations of the Company or its reporting requirements with the
CONFERENCE CALL
A conference call and webcast will be held on
FINANCIAL REPORT
This release should be read together with the 2024 second quarter financial report, including the unaudited condensed interim consolidated financial statements of the Company and the related notes as at
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at
(in US dollars)
|
(Unaudited) |
|
|
|
|
|
|
|
$ |
|
$ |
ASSETS |
|
|
|
Current |
|
|
|
Cash |
2,002,741 |
|
29,892,966 |
Accounts receivable |
58,542,074 |
|
75,641,780 |
Inventories |
230,018,902 |
|
249,606,756 |
Prepaid expenses and other current assets |
1,860,117 |
|
1,553,276 |
Current assets |
292,423,834 |
|
356,694,778 |
Non-current |
|
|
|
Other non-current assets |
7,646,954 |
|
6,994,815 |
Property, plant and equipment |
190,020,538 |
|
198,536,683 |
Right-of-use assets |
85,697,681 |
|
89,663,139 |
Intangible assets |
183,052,914 |
|
175,703,257 |
Contract asset |
13,072,979 |
|
13,528,646 |
Non-current assets |
479,491,066 |
|
484,426,540 |
Total assets |
771,914,900 |
|
841,121,318 |
|
|
|
|
LIABILITIES |
|
|
|
Current |
|
|
|
Trade and other payables |
66,758,623 |
|
92,424,961 |
Deferred revenue and other deferred liabilities |
10,473,496 |
|
18,267,139 |
Current portion of long-term debt and other debts |
31,886,443 |
|
27,056,476 |
Current portion of lease liabilities |
8,236,230 |
|
7,984,563 |
Current liabilities |
117,354,792 |
|
145,733,139 |
Non-current |
|
|
|
Long-term debt and other debts |
247,688,441 |
|
197,885,889 |
Lease liabilities |
81,167,262 |
|
83,972,023 |
Share warrant obligations |
8,579,583 |
|
29,582,203 |
Conversion options on convertible debt instruments |
6,026,498 |
|
25,034,073 |
Non-current liabilities |
343,461,784 |
|
336,474,188 |
Total liabilities |
460,816,576 |
|
482,207,327 |
SHAREHOLDERS' EQUITY |
|
|
|
Share capital |
489,454,628 |
|
489,362,920 |
Contributed surplus |
140,757,712 |
|
139,569,185 |
Deficit |
(296,708,772) |
|
(255,746,097) |
Cumulative translation adjustment |
(22,405,244) |
|
(14,272,017) |
Total shareholders' equity |
311,098,324 |
|
358,913,991 |
Total shareholders' equity and liabilities |
771,914,900 |
|
841,121,318 |
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE EARNINGS
For the three and six months ended
(in US dollars)
|
(Unaudited) |
|
(Unaudited) |
||||
|
Three months ended |
|
Six months ended |
||||
|
|
|
|
|
|
|
|
|
$ |
|
$ |
|
$ |
|
$ |
Revenue |
30,276,027 |
|
58,015,843 |
|
85,756,916 |
|
112,719,248 |
Cost of sales |
45,489,617 |
|
57,596,937 |
|
112,114,193 |
|
114,557,630 |
Gross profit (loss) |
(15,213,590) |
|
418,906 |
|
(26,357,277) |
|
(1,838,382) |
|
|
|
|
|
|
|
|
Administrative expenses |
10,944,160 |
|
12,478,787 |
|
22,061,493 |
|
25,481,472 |
Selling expenses |
4,274,676 |
|
5,466,706 |
|
8,035,670 |
|
11,326,366 |
Restructuring costs |
1,383,009 |
|
— |
|
1,383,009 |
|
— |
Operating loss |
(31,815,435) |
|
(17,526,587) |
|
(57,837,449) |
|
(38,646,220) |
|
|
|
|
|
|
|
|
Finance costs |
12,292,088 |
|
2,001,084 |
|
22,909,829 |
|
3,421,438 |
Foreign exchange loss (gain) |
971,342 |
|
(1,753,661) |
|
3,524,106 |
|
(2,965,306) |
Change in fair value of conversion options on convertible debt instruments |
(12,471,759) |
|
— |
|
(23,217,793) |
|
— |
Change in fair value of share warrant obligations |
(13,341,671) |
|
(5,986,425) |
|
(20,090,916) |
|
(11,731,321) |
Net loss |
(19,265,435) |
|
(11,787,585) |
|
(40,962,675) |
|
(27,371,031) |
Other comprehensive loss |
|
|
|
|
|
|
|
Item that will be subsequently reclassified to net earning (loss) |
|
|
|
|
|
|
|
Foreign currency translation adjustment |
(2,276,235) |
|
6,898,743 |
|
(8,133,227) |
|
7,362,420 |
Comprehensive loss for the period |
(21,541,670) |
|
(4,888,842) |
|
(49,095,902) |
|
(20,008,611) |
|
|
|
|
|
|
|
|
Loss per share |
|
|
|
|
|
|
|
Basic loss per share |
(0.09) |
|
(0.05) |
|
(0.18) |
|
(0.12) |
Diluted loss per share |
(0.09) |
|
(0.05) |
|
(0.18) |
|
(0.12) |
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three and six months ended
(in US Dollars)
|
(Unaudited) |
|
(Unaudited) |
||||
|
Three months ended |
|
Six months ended |
||||
|
|
|
|
|
|
|
|
|
$ |
|
$ |
|
$ |
|
$ |
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
Net loss |
(19,265,435) |
|
(11,787,585) |
|
(40,962,675) |
|
(27,371,031) |
Non-cash items: |
|
|
|
|
|
|
|
Depreciation and amortization |
9,108,162 |
|
5,561,359 |
|
17,195,476 |
|
10,475,016 |
Share-based compensation |
466,448 |
|
2,056,710 |
|
867,084 |
|
3,470,553 |
Accretion expense |
3,047,934 |
|
— |
|
6,074,007 |
|
— |
Interest paid in kind on convertible debt instruments |
2,477,108 |
|
— |
|
4,950,035 |
|
— |
Change in fair value of share warrant obligations |
(13,341,671) |
|
(5,986,425) |
|
(20,090,916) |
|
(11,731,321) |
Change in fair value of conversion options on convertible debt |
(12,471,759) |
|
— |
|
(23,217,793) |
|
— |
Unrealized foreign exchange gain (loss) |
1,280,968 |
|
(1,847,822) |
|
3,917,505 |
|
(1,231,348) |
Net change in non-cash working capital items |
19,691,656 |
|
7,054,722 |
|
(1,439,318) |
|
(16,161,663) |
Cash flows used in operating activities |
(9,006,589) |
|
(4,949,041) |
|
(52,706,595) |
|
(42,549,794) |
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
Acquisition of property, plant and equipment |
(1,564,403) |
|
(17,812,004) |
|
(5,388,348) |
|
(45,396,451) |
Addition to intangible assets |
(11,321,352) |
|
(18,747,189) |
|
(22,435,659) |
|
(40,456,259) |
Proceeds from |
— |
|
— |
|
— |
|
20,506,589 |
Government assistance related to property, plant and equipment and |
1,270,299 |
|
5,751,268 |
|
4,399,095 |
|
5,751,268 |
Cash flows used in investing activities |
(11,615,456) |
|
(30,807,925) |
|
(23,424,912) |
|
(59,594,853) |
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
Increase in long-term debt and other debts |
19,807,525 |
|
43,058,254 |
|
56,602,075 |
|
69,224,720 |
Repayment of long-term debt and other debts |
(3,698) |
|
(6,199) |
|
(4,370,947) |
|
(22,495,971) |
Payment of lease liabilities |
(2,021,130) |
|
(1,354,189) |
|
(4,013,671) |
|
(2,715,536) |
Proceeds from issuance of shares through "at-the-market" equity |
— |
|
1,613,804 |
|
— |
|
6,239,038 |
Proceeds from the issuance of units through the |
— |
|
— |
|
— |
|
2,907,226 |
Proceeds from the issuance of units through the |
— |
|
— |
|
— |
|
4,175,836 |
Cash flows from financing activities |
17,782,697 |
|
43,311,670 |
|
48,217,457 |
|
57,335,313 |
Effect of exchange rate changes on cash held in foreign currency |
41,829 |
|
625,793 |
|
23,825 |
|
695,328 |
Net decrease in cash |
(2,797,519) |
|
8,180,497 |
|
(27,890,225) |
|
(44,114,006) |
Cash, beginning of year |
4,800,260 |
|
35,972,482 |
|
29,892,966 |
|
88,266,985 |
Cash, end of period |
2,002,741 |
|
44,152,979 |
|
2,002,741 |
|
44,152,979 |
Other information on cash flows related to operating activities: |
|
|
|
|
|
|
|
Interest paid |
5,181,170 |
|
2,116,335 |
|
9,620,379 |
|
3,857,674 |
Interest paid under lease liabilities |
1,252,263 |
|
1,128,148 |
|
2,510,465 |
|
2,127,051 |
NON-IFRS MEASURES AND OTHER PERFORMANCE METRICS
This press release makes reference to Adjusted EBITDA, which is a non-IFRS financial measure, as well as other performance metrics, including the Company's order book, which are defined below. These measures are neither required nor recognized measures under IFRS, and, as a result, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company's results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the Company's financial information reported under IFRS. Lion compensates for these limitations by relying primarily on Lion's IFRS results and using Adjusted EBITDA and order book on a supplemental basis. Readers should not rely on any single financial measure to evaluate Lion's business. Adjusted gross profit (loss) and adjusted gross margin (loss), as defined in section 4.0 entitled "Non-IFRS Measures and Other Performance Metric" of the Company's MD&A for the years ended 2023 and 2022, are not presented in this press release as the inventory write-down recorded by the Company in connection with its decision to indefinitely delay the start of commercial production of the
Adjusted EBITDA
"Adjusted EBITDA" is defined as net earnings (loss) before finance costs, income tax expense or benefit, and depreciation and amortization, adjusted to exclude restructuring costs, share-based compensation, change in fair value of conversion options on convertible debt instruments, change in fair value of share warrant obligations, foreign exchange (gain) loss and transaction and other non-recurring expenses. Lion uses adjusted EBITDA to facilitate a comparison of the profitability of its business on a consistent basis from period-to-period and to provide a further understanding of factors and trends affecting its business. The Company also believes this measure is useful for investors to assess the Company's profitability, its cost structure and its ability to service debt and to meet other payment obligations. However, readers should be aware that when evaluating Adjusted EBITDA, Lion may incur future expenses similar to those excluded when calculating Adjusted EBITDA. In addition, Lion's presentation of these measures should not be construed as an inference that Lion's future results will be unaffected by unusual or non-recurring items. Readers should review the reconciliation of net earnings (loss), the most directly comparable IFRS financial measure, to Adjusted EBITDA presented by the Company under section 13.0 of the Company's MD&A for the three and six months ended
Order Book
This press release also makes reference to the Company's "order book" with respect to vehicles (trucks and buses) as well as charging stations. The Company's vehicles and charging stations order book is determined by management based on purchase orders that have been signed, orders that have been formally confirmed by clients, or products in respect of which formal joint applications for governmental programs, subsidies or incentives have been made by the applicable clients and the Company. The order book is expressed as a number of units or a total dollar value, which dollar value is determined based on the pricing of each unit included in the order book as further explained under "Pricing" in section 10.0 of the Company's MD&A for the three and six months ended
The Company's presentation of the order book should not be construed as a representation by the Company that the vehicles and charging stations included in its order book will translate into actual sales. See the section below for a full description of the methodology used by the Company in connection with the order book and certain important risks and uncertainties relating to such methodology and the presentation of the order book.
|
The Company's vehicle and charging stations order book is determined by management based on purchase orders that have been signed, orders that have been formally confirmed by clients or products in respect of which formal joint applications for governmental programs, subsidies or incentives have been made by the applicable clients and the Company. The order book is expressed as a number of units or a total dollar value, which dollar value is determined based on the pricing of each unit included in the order book as further explained below under the section entitled "Pricing".
The vehicles included in the vehicle order book as of
The Company's presentation of the order book should not be construed as a representation by the Company that the vehicles and charging stations included in its order book will translate into actual sales.
|
Delivery Periods:
|
The Company's order book refers to products that have not yet been delivered but which are reasonably expected by management to be delivered within a time period that can be reasonably estimated and includes, in the case of charging stations, services that have not been completed but which are reasonably expected by management to be completed in connection with the delivery of the product.
Purchase orders and applications relating to vehicles of Lion generally provide for a time period during which the client expects delivery of the vehicles. Such period can vary from a specific date, a number or range of months after the issuance of the order or application, or a calendar year. The vehicles included in the vehicle order book as of
|
Pricing:
|
When the Company's order book is expressed as an amount of sales, such amount has been determined by management based on the current specifications or requirements of the applicable order, assumes no changes to such specifications or requirements and, in cases where the pricing of a product or service may vary in the future, represents management's reasonable estimate of the prospective pricing as of the time such estimate is reported. A small number of vehicles included in the order book have a pricing that remains subject to confirmation based on specifications and other options to be agreed upon in the future between the applicable client and the Company. For purposes of the determination of the order book and the value allocated to such orders, management has estimated the pricing based on its current price lists and certain other assumptions relating to specifications and requirements deemed reasonable in the circumstances.
|
Performance Metric:
|
The order book is intended as a supplemental measure of performance that is neither required by, nor presented in accordance with, IFRS, and is neither disclosed in nor derived from the financial statements of the Company. The Company believes that the disclosure of its order book provides an additional tool for investors to use in evaluating the Company's performance, market penetration for its products, and the cadence of capital expenditures and tooling.
The Company's computation of its order book is subject to the specific methodology described herein and may not be comparable to other similarly entitled measures computed by other companies, because all companies may not calculate their order book in the same fashion. Other companies also sometimes refer to or use "order backlog" or "order intake" as performance metrics, which are most likely not calculated on the same basis as the Company's order book. In addition, as explained above, the Company's presentation of the order book is calculated based on the orders and the applications made as of the time that the information is presented, and it is not based on the Company's assessment of future events and should not be construed as a representation by the Company that the vehicles and charging stations included in its order book will translate into actual sales.
|
Ongoing Evaluation; Risk Factors: |
A portion of the vehicles or charging stations included in the Company's order book may be cancellable in certain circumstances (whether by reason of a delivery delay, unavailability of a program, subsidy or incentive or otherwise) within a certain period. Management reviews the composition of the order book every time it is reported in order to determine whether any orders should be removed from the order book. For purposes of such exercise, management identifies orders that have been or are reasonably likely to be cancelled and examines, among other things, whether conditions attaching to the order are reasonably likely to result in a cancellation of the order in future periods as well as any other available information deemed relevant, including ongoing dialogue with clients and governments. Such exercise may result from time to time in orders that have previously been included in the order book being removed even if they have not been formally canceled by the client. See the first paragraph of this section entitled "Order Book" for a presentation of the variance in the total number of units and the total dollar value of the vehicles and charging stations included in the Company's order book since
The Company cannot guarantee that its order book will be realized in full, in a timely manner, or at all, or that, even if realized, revenues generated will result in profits or cash generation as expected, and any shortfall may be significant. The Company's conversion of its order book into actual sales is dependent on various factors, including those described below and under section 23.0 entitled "Risk Factors" of the Company's MD&A for the years ended
Any termination, modification, delay or suspension of any governmental programs, subsidies and incentives, including, most importantly as of the date hereof, the ZETF, the Quebec Green Economy Plan or the EPA Program could result in delayed deliveries or the cancellation of all or any portion of orders, which, in turn, could have a material and adverse effect on the Company's business, results of operations or financial condition.
The Company's conversion of its order book into actual sales is also dependent on its ability to economically and timely manufacture its vehicles, at scale. The Company delivered 519 vehicles during the year ended |
RECONCILIATION OF ADJUSTED EBITDA
The following table reconciles net loss to Adjusted EBITDA for the three and six months ended
|
Unaudited - Three months ended |
|
Unaudited - Six months ended |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
(in thousands) |
|
(in thousands) |
||||
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
( |
|
( |
|
( |
|
( |
Restructuring costs(1) |
|
|
$— |
|
|
|
$— |
Finance costs |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
Share-based compensation(2) |
|
|
|
|
|
|
|
Change in fair value of conversion options on convertible debt instruments(3) |
( |
|
$— |
|
( |
|
$— |
Change in fair value of share warrant obligations(4) |
( |
|
( |
|
( |
|
( |
Foreign exchange loss (gain)(5) |
|
|
( |
|
|
|
( |
Transaction and other non-recurring expenses(6) |
|
|
|
|
|
|
|
Adjusted EBITDA |
( |
|
( |
|
( |
|
( |
(1) |
Represents the restructuring costs (mainly severance costs) recognized in connection with workforce reduction announced on |
(2) |
Represents non-cash expenses recognized in connection with the issuance of stock options, restricted share units, and deferred share units issued under Lion's omnibus incentive plan as described in Note 10 to the condensed interim consolidated financial statements as at |
(3) |
Represents non-cash change in the fair value of the conversion options on convertible debt instruments as described in Note 8 to the condensed interim consolidated financial statements as at |
(4) |
Represents non-cash change in the fair value of the share warrant obligations as described in Note 9 to the condensed interim consolidated financial statements as at |
(5) |
Represents losses (gains) relating to foreign exchange translation. |
(6) |
For the three and six months ended |
ABOUT LION ELECTRIC
Always actively seeking new and reliable technologies, Lion vehicles have unique features that are specifically adapted to its users and their everyday needs. Lion believes that transitioning to all-electric vehicles will lead to major improvements in our society, environment and overall quality of life. Lion shares are traded on the
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking information" and "forward-looking statements" within the meaning of applicable securities laws and within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking statements"). Any statements contained in this press release that are not statements of historical fact, including statements about Lion's beliefs and expectations, are forward-looking statements and should be evaluated as such.
Forward-looking statements may be identified by the use of words such as "believe," "may," "will," "continue," "anticipate," "intend," "expect," "should," "would," "could," "plan," "project," "potential," "seem," "seek," "future," "target" or other similar expressions and any other statements that predict or indicate future events or trends or that are not statements of historical matters, although not all forward-looking statements may contain such identifying words. These forward-looking statements include statements regarding the Company's liquidity and capital requirements and management's forecasts related thereto, the implementation by the Company of measures and initiatives aimed at reducing its cost structure, managing its liquidity and optimizing its balance sheet (including the
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Lion believes that these risks and uncertainties include the following:
- any inability to generate sufficient cash flows and/or raise additional funds to meet its capital requirements (including as result of upcoming maturities of debt instruments such as the Finalta-CDPQ Loan Agreement (as defined below) or the expiration of the covenant relief period) and pursue its growth strategy, in each case, when and in the amounts needed;
- any inability to remain in compliance with the terms and conditions of its debt instruments (including during or after the covenant relief period);
- any adverse changes in
U.S. or Canadian general economic, business, market, financial, political or legal conditions, including as a consequence of the ongoing uncertainties relating to inflation and interest rates; - any unavailability, reduction, discriminatory application, delay in processing or elimination of governmental programs, subsidies or incentives due to policy changes, government regulations or decisions or otherwise;
- any inability to ramp-up the production of Lion's products and meet project construction and other project milestones and timelines;
- any inability to meet the expectations of the Company's customers in terms of products, specifications, and services;
- any inability to successfully and economically manufacture and distribute its vehicles at scale;
- any inability to execute the Company's growth strategy;
- any escalation, deterioration and adverse effects of current military conflicts, which may affect economic and global financial markets and exacerbate ongoing economic challenges;
- any unfavorable fluctuations and volatility in the availability or price of raw materials included in components used to manufacture the Company's products, including battery cells, modules and packs;
- the reliance on key suppliers and any inability to maintain an uninterrupted supply of raw materials;
- any inability to reduce total cost of ownership of electric vehicles sold by the Company over time;
- the reliance on key management and any inability to attract and/or retain key personnel;
- labor shortages (including as a result of employee departures, turnover, demands for higher wages and unionization of employees) which may force the Company to operate at reduced capacity, to lower its production and delivery rates or lower its growth plans, and could pose additional challenges related to employee compensation;
- any inability to maintain the Company's competitive position;
- any inability to reduce the Company's costs of supply over time;
- any inability to maintain and enhance the Company's reputation and brand;
- any significant product repair and/or replacement due to product warranty claims or product recalls;
- any failure of information technology systems or any cybersecurity and data privacy breaches or incidents;
- any inability to secure adequate insurance coverage or a potential increase in insurance costs;
- natural disasters, epidemic or pandemic outbreaks, boycotts and geo-political events such as civil unrest, acts of terrorism, the current ongoing military conflicts or similar disruptions;
- any event or circumstance, including the materialization of any of the foregoing risks and uncertainties, resulting in the Company's inability to convert its order book into actual sales; and
- the outcome of any legal proceedings in which the Company is or may be involved from time to time.
These and other risks and uncertainties related to the business of Lion are described in greater detail in section 23.0 entitled "Risk Factors" of the Company's MD&A for the years ended
Because of these risks, uncertainties and assumptions, readers should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under applicable securities laws, Lion undertakes no obligation, and expressly disclaims any duty, to update, revise or review any forward-looking information, whether as a result of new information, future events or otherwise.
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