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Lordstown Says Hedge Fund to Buy Up to $400 Million in Stock

Lordstown Motors says hedge fund commits to buying up to $400 million of the company's stock.

Struggling electric truck maker Lordstown Motors  (RIDE) - Get LORDSTOWN MOTORS CORP. Report said Monday that hedge fund YA II PN Ltd has committed to buying up to $400 million of the company's stock over a three-year period.

Shares of the Ohio company were off 1.3% to $7.39 at last check.

Lordstown Motors disclosed the agreement in a filing with the Securities and Exchange Commission.

Under the terms the deal, YA can receive nearly 35 million Lordstown shares upon execution of the agreement, subject to the approval of Lordstown shareholders, as well as a small discount on the shares whenever purchased.

YA is a fund managed by Yorkville Advisors Global, LP, headquartered in Mountainside, N.J.

Yorkville Advisors has investments in more than 700 companies in over 20 countries, according to its website. 

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Some of its investments include cannabis deals network, copper ores company Copperstone Resources and biotechnology company CytoTools.

Earlier this month, Lordstown Motors said in an SEC filing that it’s the subject of an investigation by the agency related "to the merger between DiamondPeak and Legacy Lordstown and pre-orders of vehicles."

The merger with DiamondPeak was a SPAC transaction that led to a public listing for Lordstown in October. 

In June, Lordstown Motors said that CEO Steve Burns will step down following an independent investigation into allegations made by short-seller Hindenburg Research that called the company a "mirage'.

Burns, as well as CFO Julio Rodriguez, will resign following the publication of what Lordstown called an investigation by a "special committee" into a damning report by Hindenburg. 

Also in June, SEC filings showed that five of Lordstown’s top executives sold more than $8 million of stock in February. 

The company had warned in that same month that it didn't have enough cash on hand to build vehicles at scale and sell them, and that "these conditions raise substantial doubt regarding our ability to continue as a going concern."