Item 8.01 Other Events
As previously disclosed, on
Following receipt of the stockholder letter, the Board undertook a review of the
matters raised with the assistance of outside counsel not involved in the
underlying transactions at issue and had determined, in reliance upon, among
other things, advice of several law firms including a legal opinion of
The Company continues to believe that a separate vote of Class A common stock
was not required to approve the 2020 Class A Increase Amendment. However, in
light of a recent decision of the
While we believe that a separate vote of Class A common stock was not required
to approve the 2020 Class A Increase Amendment, and therefore that all of our
currently outstanding shares of Class A common stock were validly issued, if we
are not successful in the Section 205 proceeding, the uncertainty with respect
to the Company's capitalization resulting from the
Forward-Looking Statements
This report includes forward looking statements. These statements are made under
the "safe harbor" provisions of the
With respect to the matters addressed in this report, no assurances can be made regarding the outcome of our proceeding pursuant to Section 205 of the Delaware General Corporation Law or any claims, proceedings or litigation regarding the authorization of our common stock. Our Section 205 proceeding is, and any other litigation regarding the authorization of our stock would be, subject to uncertainties inherent in the litigation process, and may not result in timely resolution of the uncertainty regarding our capitalization, if at all. If we are unsuccessful in the Section 205 proceeding, claims alleging that a portion of our Class A common stock was not authorized could have a material adverse effect on the Company.
In addition, the transactions we entered into with Foxconn and future vehicle
development plans are subject to risks and uncertainties. The additional funding
transactions under the Investment Agreement, dated
Foxconn. The EV program will require additional funding and the establishment and implementation of the program requirements, among other matters, may not be consummated, sufficiently implemented or provide the benefits we expect. If we are unable to close the subsequent tranches of funding, successfully utilize the Foxconn EV ecosystem or develop new vehicles for ourselves and potentially other customers, our business prospects, results of operations and financial condition may be adversely affected. If we are unable to maintain our relationship with Foxconn or effectively manage outsourcing the production of the Endurance to Foxconn, we may be unable to ensure continuity, quality, and compliance with our design specifications or applicable laws and regulations, which may ultimately disrupt and have a negative effect on our production and operations.
We will need additional funding and will seek strategic partnerships to execute
our business plan and to achieve scaled production of the Endurance and
development of other vehicles. There can be no assurance that such financing or
partnerships would be available to us on favorable terms or at all, due to
several factors, including the pending Section 205 proceeding, market and
economic conditions, the significant amount of capital required, the fact that
our bill of materials cost is currently, and expected to continue to be,
substantially higher than our anticipated selling price, uncertainty surrounding
the performance of the vehicle, meaningful exposure to material losses related
to ongoing litigation and the
Additional information on potential factors that could affect the financial
results of the Company and its forward-looking statements is included in its
most recent Form 10-K and subsequent filings with the
2
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Description 104 Cover Page Interactive Data File (formatted as inline XBRL)
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