Close Menu
    Facebook X (Twitter) Instagram
    Pro Magzine
    • Home
    • News
      • Top Stories
      • USA
    • Entertainment
      • Movies
      • Celebrity
      • Web series
      • Net worth
    • Business
    • Health
      • Fitness
      • Food & Drink
    • Lifestyle
      • Tattoos
      • Fashion
      • Love & Relationship
      • Messages
      • Sports
      • Travel
    • Tech
      • Internet
      • Gaming
      • SEO
      • Software
      • Tips
    • More
      • Trending
      • Crypto
      • Dogecoin
      • Pets
      • Real Estate
    Pro Magzine
    Home»News»Foxconn’s threat to pull out of a significant financial contract has Lordstown Motors threatening bankruptcy.

    Foxconn’s threat to pull out of a significant financial contract has Lordstown Motors threatening bankruptcy.

    EmilyeBy EmilyeMay 1, 2023No Comments3 Mins Read
    Foxconn's threat to pull out of a significant financial contract has Lordstown Motors threatening bankruptcy.

    Foxconn’s threat to pull out of a significant financial contract has Lordstown Motors threatening bankruptcy. Lordstown Motors, an electric vehicle startup, disclosed on Monday that a finance contract with Foxconn is in peril, and the company may go bankrupt if the deal does not go through. The initial drop in share price was 25 percent.

    In a regulatory filing made on Monday, Lordstown stated that it had received a letter from Foxconn on April 21 alleging that the startup was in breach of an investment deal because its stock had fallen below $1 per share for 30 consecutive trading days, which triggered a delisting notice from NASDAQ. The letter alleged the breach occurred because the startup’s stock had fallen below $1 for 30 consecutive trading days.

    Read more: American citizens fleeing the violence in Sudan in the first government-organized convoy.

    A year ago, the struggling new business agreed with the industry leader in contract manufacturing from Taiwan to sell its factory in Ohio. After the initial transaction between the two companies was finalized in May 2022, the two businesses agreed on a second transaction in which Foxconn would invest up to $170 million in Lordstown, equating to a 19.3% stake.

    Last year, Foxconn made the initial payment of $52.7 million that was owed by that arrangement; however, the remaining balance and the deal itself are currently in peril.

    Foxconn must invest $47.3 million within ten business days after receiving regulatory approval from the Committee on Foreign Investment in the United States by the agreement’s provisions. According to Lordstown, Foxconn successfully obtained that support on April 25, and as a result, the company is obligated to make that expenditure by May 8.

    Lordstown has expressed its fear that further investment will not come in before the deadline and that Foxconn does not appear to be making a good-faith attempt to finish an electric vehicle plan, which is one of the deal’s milestones. Lordstown indicated that it is concerned that the deadline will not be met.

    Foxconn must make an additional investment of $70 million after the two businesses fulfilled their agreement to finalize a plan to jointly create a new electric vehicle by the 7th of May. Lordstown claims that Foxconn is not making “commercially reasonable efforts” to complete the project, which is why it has not been finalized.

    Lordstown claimed that Foxconn’s actions are “completely unwarranted” and have resulted in “material — and what is becoming irreparable — harm to the company.” Lordstown said this about the company’s situation.

    In the document, Lordstown expressed concern that it would be compelled to seek bankruptcy protection if the Foxconn deal is unsuccessful. Despite suffering a loss of more than $100 million in the last quarter of 2022, the company ended the year with a cash balance of 221.7 million dollars.

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    Emilye

    Related Posts

    Soft Semiconductors: Designing for Flexibility Without Performance Trade-Offs

    April 29, 2025

    The Complete Guide to Buying Central Vacuum Systems Online

    April 24, 2025

    Maximize Your Hunting Success with the Right Gear and Equipment

    April 3, 2025
    Leave A Reply Cancel Reply

    You must be logged in to post a comment.

    Top Posts

    Edge AI Solution for Traffic Management with NVIDIA Jetson AGX Orin

    May 4, 20257 Views

    Soft Semiconductors: Designing for Flexibility Without Performance Trade-Offs

    April 29, 20258 Views

    The Complete Guide to Buying Central Vacuum Systems Online

    April 24, 202513 Views

    Reasons Why a Meditation Retreat in Malaysia Should Be Your Next Getaway

    April 14, 20257 Views

    The Secret to Scaling: CRM by Rocket and the Future of Smart Business Management

    April 13, 202516 Views

    Maximize Your Hunting Success with the Right Gear and Equipment

    April 3, 20255 Views

    Impact of New Tariffs on the Cosmetics Industry and How Innovative Solutions Address the Challenges

    April 3, 202541 Views

    AI-Driven Government Proposal Analytics: Turning Data Into Competitive Advantage

    April 3, 202516 Views

    How a Virtual Receptionist Service Can Save Your Business Time and Money

    April 3, 202513 Views

    The Ultimate Guide to Renting a Charter Bus: Everything You Need to Know Before You Book

    April 3, 20258 Views
    • Home
    • Privacy Policy
    • About Us
    • Disclaimer
    • Contact Us
    © 2025 Pro Magzine. Designed by GP.

    Type above and press Enter to search. Press Esc to cancel.