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LORDSTOWN MOTORS CORP.

(RIDE)
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LORDSTOWN MOTORS CORP. : Entry into a Material Definitive Agreement, Unregistered Sale of Equity Securities, Financial Statements and Exhibits (form 8-K)

07/26/2021 | 09:17am EDT

Item 1.01 Entry into a Material Definitive Agreement.

On July 23, 2021, Lordstown Motors Corp. (the "Company" or "we") entered into an equity purchase agreement (the "Purchase Agreement") with YA II PN, LTD. ("YA"), pursuant to which YA has committed to purchase up to $400 million of our Class A common stock (the "Total Commitment"), at our direction from time to time, subject to the satisfaction of the conditions in the Purchase Agreement. YA is a fund managed by Yorkville Advisors Global, LP, headquartered in Mountainside, New Jersey.

Such sales of Class A common stock, if any, will be subject to certain limitations, and may occur from time to time at our sole discretion, over the approximately 36-month period commencing on the date of the Purchase Agreement, provided that a registration statement covering the resale by YA of the shares of Class A common stock purchased from us (which we have agreed to file) is declared effective by the SEC and the other conditions set forth in the Purchase Agreement are satisfied.

YA has no right to require us to sell any shares of Class A common stock to YA, but YA is obligated to make purchases at our direction subject to certain conditions. There is no upper limit on the price per share that YA could be obligated to pay for the Class A common stock under the Purchase Agreement.

Actual sales of shares of Class A common stock to YA from time to time will depend on a variety of factors, including, among others, market conditions, the trading price of our Class A common stock and determinations by us as to the appropriate sources of funding for us and our operations. The net proceeds that we may receive under the Purchase Agreement cannot be determined at this time, since it will depend on the frequency and prices at which we sell shares of our Class A common stock to YA, our ability to meet the conditions of the Purchase Agreement and the other limitations, terms and conditions of the Purchase Agreement. The Company expects that any proceeds received by the Company from such sales to YA will be used for working capital and general corporate purposes.

Under applicable Nasdaq rules and the Purchase Agreement, we will not sell to YA shares of our Class A common stock in excess of 35,144,690 shares (the "Exchange Cap"), which is 19.9% of the shares of Class A common stock outstanding immediately prior to the execution of the Purchase Agreement, unless (i) we obtain stockholder approval to issue shares of Class A common stock in excess of the Exchange Cap or (ii) the average price of all applicable sales of shares of Class A common stock under the Purchase Agreement (including the Commitment Shares described below in the number of shares sold for these purposes) equals or exceeds $7.48 per share (which represents the lower of (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the Purchase Agreement; or (ii) the average Nasdaq Official Closing Price of the Common Shares (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the Purchase Agreement). In any event, we may not issue or sell any shares of our Class A common stock under the Purchase Agreement if such issuance or sale would breach any applicable Nasdaq rules.

The Purchase Agreement also prohibits us from directing YA to purchase any shares of Class A common stock if those shares, when aggregated with all other shares of our Class A common stock then beneficially owned by YA and its affiliates as a result of purchases under the Purchase Agreement, would result in YA and its affiliates having beneficial ownership of more than the 4.99% of our then outstanding Class A common stock.

We may direct YA to purchase amounts of our Class A common stock under the Purchase Agreement that we specify from time to time in a written notice (an "Advance Notice") delivered to YA on any trading day. The maximum amount that we may specify in an Advance Notice is equal to the lesser of: (i) an amount equal to thirty percent (30%) of the Daily Value Traded of the Class A common stock on the trading day immediately preceding an Advance Notice, or (ii) $30.0 million. For these purposes, "Daily Value Traded" is the product obtained by multiplying the daily trading volume of our Class A common stock by the volume weighted average price for that trading day. Subject to the satisfaction of the conditions under the Purchase Agreement, we may deliver Advance Notices from time to time, provided that we have delivered all shares relating to all prior Advance Notices.

The purchase price of the shares of Class A common stock will be equal to 97% of the simple average of the daily VWAPs for the three trading days following the Advance Notice as set forth in the Purchase Agreement.

YA has agreed that, during the term of the Purchase Agreement, neither YA or its affiliates will engage in any short sales or hedging transactions with respect to our Class A common stock, provided that upon receipt of an Advance Notice, YA may sell shares that it is obligated to purchase under such Advance Notice prior to taking possession of such shares.

Unless earlier terminated as provided in the Purchase Agreement, the Purchase Agreement will terminate automatically on the earliest to occur of:

• the first day of the month next following the 36-month anniversary of the date

of the Purchase Agreement; and

the date on which YA shall have purchased shares of Class A common stock under • the Purchase Agreement for an aggregate gross purchase price equal to its

  $400 million Total Commitment under the Purchase Agreement.



We have the right to terminate the Purchase Agreement at any time, at no cost or penalty, upon five trading days' prior written notice to YA, provided that there are no outstanding Advance Notices that have not been completed. We and YA may also terminate the Purchase Agreement at any time by mutual written consent.

As consideration for YA's irrevocable commitment to purchase shares of the Company's Class A common stock upon the terms of and subject to satisfaction of the conditions set forth in the Purchase Agreement, upon execution of the Purchase Agreement, the Company agreed to issue 371,287 shares of its Class A common stock to YA (the "Commitment Shares").

The Purchase Agreement contains customary representations, warranties, conditions and indemnification obligations of the parties.

The foregoing description of the Purchase Agreement is qualified in its entirety by reference to the full text of such agreement, a copy of which is attached hereto as Exhibit 10.1, and which is incorporated herein in its entirety by reference. The representations, warranties and covenants contained in such agreement was made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement and may be subject to limitations agreed upon by the contracting parties.

This current report on Form 8-K shall not constitute an offer to sell or a solicitation of an offer to buy any shares of common stock in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

Item 3.02 Unregistered Sales of Equity Securities.

The information contained above in Item 1.01 is hereby incorporated by reference into this Item 3.02.

In the Purchase Agreement, YA represented to the Company, among other things, that it is an "accredited investor" (as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the "Securities Act")). The securities referred to in this Current Report on Form 8-K are being issued and sold by the Company to YA in reliance upon the exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act.

Item 9.01 Financial Statements and Exhibits.





(d) Exhibits.




Exhibit
Number     Description
10.1         Equity Purchase Agreement by and between Lordstown Motors Corp. and
           YA II PN, LTD., dated July 23, 2021
104        Cover Page Interactive Data File (formatted as inline XBRL)

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Daniel A. Ninivaggi Chief Executive Officer & Director
Rich Schmidt President
Rebecca A. Roof Chief Financial Officer
Angela Strand Boydston Non-Executive Chairman
Darren C. Post Vice President-Engineering
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