Rather, stockholders who are entitled to a fractional share will receive cash equal to the fraction multiplied by the close price Tuesday, which was 28 cents per share. The move will cause each 15 shares of the company’s issued and outstanding common stock to be combined into one issued and outstanding common stock. The split was approved by Lordstown Motors stockholders Monday at the company’s annual meeting. “While the company (Lordstown Motors) remains willing to negotiate with Foxconn in an effort to resolve its disputes, no agreement currently exists and the company (Lordstown Motors) cannot predict whether such an agreement will be reached in the future,” the release states. Lordstown Motors disagreed with Foxconn’s claim and was May 8, the release states, “ready, willing and able to close” on the agreement - a position the company remains in now. Nasdaq notified Lordstown Motors on April 21 it had fallen out of compliance with the exchange’s minimum bid price requirement by falling below $1 per share for 30 consecutive business days - from March 7 to April 18. Lordstown Motors and Foxconn in November signed a $170 million equity investment agreement that called for Foxconn to close on a second investment round May 8, however, Foxconn notified Lordstown Motors on April 21 that because the company had fallen out of compliance with Nasdaq’s trading rules, it breached the agreement.
If the split causes the stock to remain above $1 per share for 10 trading days in a row and Nasdaq notifies the company it is back in compliance with trading rules, “that may satisfy Foxconn’s (incorrect) interpretation of the closing condition and cause Foxconn to close the transaction,” a release sent Tuesday states. Lordstown Motors on Tuesday, however, gave no assurance the split would cause share value to rise or whether it would persuade investor Foxconn to close on a stock purchase of about $47.3 million - funding critical to the survival of the startup. The 1:15 split of the company’s Class A common stock is scheduled for today, with trading on the split-adjusted basis to begin when the market opens.
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