Lightning eMotors warns it could go bankrupt

LOVELAND – Although it reported record quarterly revenue on Monday, Loveland-based Lightning eMotors Inc. (OTC: ZEVY) expressed concern this week that it might not survive.

“The continuation of the company as a going concern is dependent upon the company attaining and maintaining profitable operations and/or raising additional capital from equity offerings, debt financings or other capital markets transactions, collaborations, strategic partnerships or licensing arrangements, all of which may be impacted by our ability to fund operations in the short term,” the company wrote in its third-quarter earnings report issued Monday. “Furthermore, if we are unable to obtain the necessary funding and/or complete a strategic transaction, we could be required to liquidate inventory, cease or curtail operations, or seek protection under applicable bankruptcy laws or similar state proceedings.”

The third-quarter earnings report was issued six days late by the electric-vehicle manufacturer,

“Although the company is working to collect outstanding accounts receivable and/or obtain bridge financing, there can be no certainty that either will occur prior to the Dec. 15 payment deadline” when convertible debt notes come due, the company said.

That deadline comes one day after Lightning is scheduled to have a hearing on its appeal of its ouster by the New York Stock Exchange. It was delisted by the NYSE in October after failing to lift its stock price over the exchange’s $1 minimum threshold. Lightning has since been traded on the over-the-counter market, using a broker/dealer network.

Even so, “we are pleased with our performance with record revenue in the third quarter” ended Sept. 30, said Tim Reeser, Lightning’s co-founder and CEO, “and we still have vehicles in inventory to sell to satisfy customer demand and generate cash.“

The company reported that it sold 110 units across a range of classes including both cargo and passenger vehicles, school buses, shuttles and cargo trucks. It received an order for five electric shuttle buses from St. Louis’ Lambert International Airport.

It said it continues to build the pipeline for its Lightning Mobile DC Fast Charger and made progress on its proprietary e-chassis.

Although Reeser expressed support for U.S. and Canadian incentive programs to accelerate adoption of commercial electric vehicles, he added that “one of the unintended consequences is that the programs can add significant delays in delivery of vehicles and collection of the payment from customers.”

Lightning had $6 million in cash on hand on Sept. 30, down by more than half from the $12.6 million it reported on June 30. It produced just 55 units in the third quarter, down from 104 in the same quarter last year, although 110 units were sold in the quarter, compared with 93 in the third quarter of 2022.

Third quarter revenue was $12.4 million, compared with $11.1 million for the same quarter last year. Excluding customer refunds related to the recall of its Romeo batteries, adjusted revenue was $12.7 million. However, that revenue was more than offset by a net loss of $50.7 million, or $7.84 per share, compared with net loss of $1.2 million, or 33 cents per diluted share, during the third quarter of last year.