MONTREAL, March 10,
2023 /PRNewswire/ - The Lion Electric Company (NYSE:
LEV) (TSX: LEV) ("Lion" or the "Company"), a leading manufacturer
of all-electric medium and heavy-duty urban vehicles, today
announced its financial and operating results for the fourth
quarter and fiscal year 2022, which ended on December 31,
2022. Lion reports its results in US dollars and in accordance with
International Financial Reporting Standards ("IFRS").
Q4 2022 FINANCIAL HIGHLIGHTS
- Delivery of 174 vehicles, an increase of 103 vehicles, as
compared to the 71 delivered in the same period last year.
- Revenue of $46.8 million, up
$23.9 million, as compared to
$22.9 million in Q4 2021.
- Gross loss of $4.8 million as
compared to gross profit of $2.2
million in Q4 2021.
- Net loss of $4.6 million in Q4
2022, as compared to net earnings of $28.3
million in Q4 2021. Net loss for Q4 2022 includes a
$15.4 million gain related to
non-cash decrease in the fair value of share warrant obligations
and a $2.5 million charge related to
non-cash share-based compensation, whereas net earnings for Q4 2021
included a $46.6 million gain related
to non-cash decrease in the fair value of share warrant obligations
and a $5.0 million charge related to
non-cash share-based compensation.
- Adjusted EBITDA1 of negative $13.9 million, as compared to negative
$7.5 million in Q4 2021, after mainly
adjusting for certain non-cash items such as change in fair value
of share warrant obligations and share-based compensation.
- Capital expenditures, which included expenditures related to
the Company's U.S. manufacturing facility in Joliet, Illinois (the "Joliet Facility") and
the Company's battery manufacturing plant and innovation center in
Mirabel, Quebec (the "Lion
Campus'), amounted to $39.1 million,
up $19.9 million, as compared to
$19.2 million in Q4 2021.
- Additions to intangible assets, which mainly consist of R&D
activities, amounted to $21.3
million, up $11.6 million, as
compared to $9.7 million in Q4
2021.
- Closed a public offering of units in December 2022, pursuant to which the Company
issued 19,685,040 units at a price of $2.54 per unit for gross proceeds of
approximately $50 million; each unit
consisted of one common share and one common share purchase warrant
(a "2022 Warrant"), with each whole 2022 Warrant entitling the
holder thereof to acquire one common share at an exercise price of
$2.80 per share for a period of five
years until December 16, 2027.
- Total gross proceeds from financing activities of approximately
$116 million, consisting of offering
of units (approximate gross proceeds of $50
million), issuance of common shares under the Company's
"at-the-market" program (approximate gross proceeds of $10 million) and borrowings under long-term debt
instruments (approximately $56
million in the aggregate under the Company's revolving
credit agreement, loan with Investissement Quebec, loan with the
Strategic Innovation Fund of the Government of Canada and new loan agreement with Finalta and
CDPQ), as compared to approximately $64
million in the aggregate in Q4 2021.
|
____________________________
|
|
1
Adjusted EBITDA is a non-IFRS financial measure. See "Non-IFRS
Measures and Other Performance Metrics" section of this press
release.
|
FISCAL 2022 FINANCIAL HIGHLIGHTS
- Delivery of 519 vehicles, an increase of 323 vehicles, as
compared to the 196 delivered in fiscal 2021.
- Revenue of $139.9 million, up
$82.2 million, as compared to
$57.7 million in fiscal 2021.
- Gross loss of $12.9 million, as
compared to gross profit of nil in fiscal 2021.
- Net earnings of $17.8 million, as
compared to a net loss of $43.3
million in fiscal 2021. Net earnings for fiscal 2022
includes higher gains related to non-cash decrease in the fair
value of share warrant obligations and lower non-cash share-based
compensation, as compared to fiscal 2021.
- Adjusted EBITDA of negative $54.8
million, as compared to negative $27.6 million in fiscal 2021, after mainly
adjusting for certain non-cash items such as change in fair value
of share warrant obligations and share-based compensation.
- Capital expenditures, which included expenditures related to
the Joliet Facility and the Lion Campus, amounted to $148 million, up $119.4
million, as compared to $28.6
million in fiscal 2021.
- Additions to intangible assets, which mainly consist of R&D
activities, amounted to $79.1
million, up $42.7 million, as
compared to $36.4 million in fiscal
2021.
BUSINESS UPDATES
- More than 950 vehicles on the road, with over 10 million miles
driven.
- Vehicle order book2 of 2,468 all-electric medium-
and heavy-duty urban vehicles as of March 9,
2023, consisting of 301 trucks and 2,167 buses, representing
a combined total order value of approximately $575 million based on management's
estimates.
- LionEnergy order book2 of 317 charging stations and
related services as of March 9, 2023,
representing a combined total order value of approximately
$6 million.
- 12 Experience Centers in operation in the United States and Canada.
- Completed in December 2022 the
delivery of its first LionC zero-emission school bus built at the
Joliet Facility and funded by the U.S. EPA's Clean School Bus
Program.
- Completed production of its first lithium-ion battery pack at
the battery manufacturing plant in Mirabel, Quebec in December 2022 and transferred an additional
portion of the battery production line from JR Automation's
facility in Troy, Michigan (where
the Company previously produced and tested prototype battery packs)
to the battery manufacturing facility in Mirabel in early 2023. Final certification of
the first battery pack is expected in the first half of 2023,
followed by a gradual ramp up of production in 2023.
- Completed in February 2023 a
sale-leaseback transaction for the battery manufacturing building
located in Mirabel, Quebec for a
total purchase price of $21.5 million
(C$28 million) and entered into a
lease agreement for an initial 20-year term with subsequent renewal
options.
- As of March 9, 2023, Lion had
approximately 1,400 employees, of which approximately 300 were in
its Engineering and R&D departments.
"We are pleased with our 2022 performance, as once again,
despite external challenges, we delivered a record number of
electric vehicles. In parallel, we produced our first electric
school bus at our Joliet, IL
manufacturing plant and we produced our first battery pack at our
Mirabel, QC battery manufacturing
facility, while efficiently managing our cash position throughout
the year," commented Marc Bedard,
CEO – Founder of Lion. "As we head into a new year, I would like to
thank all our employees for their hard work and dedication. In
2023, we will continue to carefully manage liquidities while
maintaining focus on investing the capital and resources required
to accelerate the efficient ramp-up of our production, with a view
to optimize our manufacturing footprint and drive long-term growth
and profitability," concluded Marc
Bedard.
|
____________________________________
|
|
2 See
"Non-IFRS Measures and Other Performance Metrics" section of this
press release. The Company's vehicle and charging stations order
book is determined by management based on purchase orders
that have been signed, orders that have been formally confirmed by
clients or products in respect of which formal joint applications
for governmental subsidies or economic incentives have been made by
the applicable clients and the Company. The order book is expressed
as a number of units or a total dollar value, which dollar value is
determined based on the pricing of each unit included in the order
book. The vehicles included in the vehicle order book as of March
9, 2023 provided for a delivery period ranging from a few months to
the end of the year ending December 31, 2025. Substantially all
deliveries are subject to the granting of subsidies and incentives
with processing times that are subject to important variations, and
there has been in the past and the Company expects there will
continue to be variances between the expected delivery periods of
orders and the actual delivery times, and certain delays could be
significant. Such variances or delays could result in the loss of a
subsidy or incentive and/or in the cancellation of certain orders,
in whole or in part. The Company's presentation of the order book
should not be construed as a representation by the Company that the
vehicles and charging stations included in its order book will
translate into actual sales.
|
SELECT EXPLANATIONS ON RESULTS OF OPERATIONS FOR THE FOURTH QUARTER
AND FISCAL YEAR 2022
Revenue
For the three months ended December 31,
2022, revenue amounted to $46.8
million, an increase of $23.9
million, compared to the corresponding period in the prior
year. The increase in revenue was primarily due to an increase in
vehicle sales volume of 103 units, from 71 units (57 school buses
and 14 trucks; 43 vehicles in Canada and 28 vehicles in the U.S.) for the
three months ended December 31, 2021
to 174 units (139 school buses and 35 trucks; 160 vehicles in
Canada and 14 vehicles in the
U.S.) for the three months ended December
31, 2022. Revenues for the three months ended December 31, 2022 were impacted by continuing
global supply chain challenges, which required the Company to delay
the final assembly of certain vehicles and resulted in increased
inventory levels, as well as challenges associated with the
production ramp-up and the development of certain models.
For the year ended December 31,
2022, revenue amounted to $139.9
million, an increase of $82.2
million, compared to the year ended December 31, 2021. The increase in revenue was
primarily due to an increase in vehicle sales volume of 323 units,
from 196 units (151 school buses and 45 trucks; 134 vehicles in
Canada and 62 vehicles in the
U.S.) for the year ended December 31,
2021, to 519 units (409 school buses and 110 trucks; 471
vehicles in Canada and 48 vehicles
in the U.S.) for the year ended December 31,
2022. Revenues for the year ended December 31, 2022 were impacted by
continuing global supply chain challenges, which required the
Company to delay the final assembly of certain vehicles and
resulted in increased inventory levels, as well as challenges
associated with the production ramp-up and the development of
certain models.
Cost of Sales
For the three months ended December 31,
2022, cost of sales amounted to $51.5
million, representing an increase of $30.8 million compared to $20.7 million in the corresponding period in the
prior year. The increase was primarily due to increased sales
volumes and higher production levels, increased fixed manufacturing
and inventory management system costs related to the ramp-up of
future production capacity, higher raw material and commodity
costs, and the impact of continuing global supply chain challenges
and inflationary environment.
For the year ended December 31,
2022, cost of sales amounted to $152.9 million, representing an increase of
$95.2 million, compared to the year
ended December 31, 2021. The increase
was primarily due to increased sales volumes and higher production
levels, increased fixed manufacturing and inventory management
system costs related to the ramp-up of future production capacity,
higher raw material and commodity costs, and the impact of
continuing global supply chain challenges and inflationary
environment.
Gross Profit
For the three months ended December 31,
2022, gross profit decreased by $6.9
million, from a gross profit of $2.2
million for the corresponding period in the prior year, to a
gross loss of $4.8 million for the
three months ended December 31, 2022.
The decrease was primarily due to the impact of increased fixed
manufacturing costs and inventory management system costs related
to the ramp-up of future production capacity, higher raw material
and commodity costs, product mix, and the impact of continuing
global supply chain challenges and inflationary environment,
partially offset by the positive gross profit impact of increased
sales volumes.
For the year ended December 31,
2022, gross profit decreased by $13.0
million to negative $12.9
million, compared to nil for the year ended December 31, 2021. The decrease was primarily due
to the impact of increased fixed manufacturing costs and inventory
management system costs related to the ramp-up of future production
capacity, higher raw material and commodity costs, product mix, and
the impact of continuing global supply chain challenges and
inflationary environment, partially offset by the positive impact
of increased sales volumes.
Administrative Expenses
For the three months ended December 31,
2022, administrative expenses decreased by $2.2 million, from $12.2
million for the three months ended December 31, 2021, to $10.0 million for the three months ended
December 31, 2022. Administrative
expenses for the three months ended December
31, 2022 included $2.1 million
of non-cash share-based compensation, compared to $4.4 million for the three months ended
December 31, 2021. Excluding the
impact of non-cash share-based compensation, administrative
expenses increased from $7.8 million
for the three months ended December 31,
2021 to $7.9 million for the
three months ended December 31, 2022.
The increase was mainly due to an increase in expenses resulting
from the expansion of Lion's head office and general corporate
capabilities in anticipation of an expected increase in business
activities.
For the year ended December 31,
2022, administrative expenses decreased by $33.6 million, from $78.4
million for the year ended December
31, 2021, to $44.8 million.
Administrative expenses for the year ended December 31, 2022 included $9.5 million of non-cash share-based
compensation, compared to $56.7
million for the year ended December
31, 2021. Excluding the impact of non-cash share-based
compensation, administrative expenses increased from $21.7 million for the year ended December 31, 2021 to $35.3
million for year ended December 31,
2022. The increase was mainly due to an increase in expenses
reflecting Lion's transition to being a public company in
May 2021, an increase in expenses
resulting from the expansion of Lion's head office and general
corporate capabilities in anticipation of an expected increase in
business activities, as well as professional fees related to supply
chain and strategic project optimization initiatives.
Selling Expenses
For the three months ended December 31,
2022, selling expenses increased by $0.9 million, from $4.8
million for the three months ended December 31, 2021, to $5.6
million for the three months ended December 31, 2022. Selling expenses for the three
months ended December 31, 2022
included $0.4 million of non-cash
share-based compensation, compared to $0.7
million for the three months ended December 31, 2021. Excluding the impact of
non-cash share-based compensation, selling expenses increased from
$4.1 million for the three months
ended December 31, 2021 to
$5.2 million for the three months
ended December 31, 2022. The increase
was primarily due to Lion expanding its sales force in anticipation
of the ramp-up of production capacity, and an increase in expenses
as a result of the opening and operations of new Experience
Centers.
For the year ended December 31,
2022, selling expenses decreased by $4.7 million, from $27.7
million for the year ended December
31, 2021, to $23.0 million.
Selling expenses for the year ended December
31, 2022 included $2.9 million
of non-cash share-based compensation, compared to $14.4 million for the year ended December 31, 2021. Excluding the impact of
non-cash share-based compensation, selling expenses increased from
$13.3 million for the year ended
December 31, 2021 to $20.1 million for year ended December 31, 2022. The increase was primarily due
to Lion expanding its sales force in anticipation of the ramp-up of
production capacity, and an increase in expenses as a result of the
opening and operations of new Experience Centers.
Transaction Costs
Transaction costs of $13.7 million
for the year ended December 31, 2021
were incurred in the second quarter of 2021 and related to the
completion of the Business Combination pursuant to which Lion
became a public company, and were mainly composed of legal,
banking, and other professional fees. No such transaction costs
were incurred in fiscal 2022.
Finance Costs
For the three months ended December 31,
2022, finance costs decreased by $2.1 million compared to the corresponding
period in the prior year. Finance costs for the three months ended
December 31, 2022 were net of
$5.1 million of capitalized borrowing
costs. Excluding the impact of capitalized borrowing costs, finance
costs increased by $3.0 million
compared to the three months ended December
31, 2021. The increase was driven primarily by higher
interest expense on long-term debt, due to higher debt outstanding
during the quarter relating to borrowings made under the Company's
revolving credit agreement, loan with Investissement Quebec, loan
with the Strategic Innovation Fund of the Government of
Canada and new loan agreement with
Finalta and CDPQ, as well as an increase in financing costs related
to the issuance of the 2022 Warrants, and an increase in interest
costs related to lease liabilities, including for the Joliet
Facility.
For the year ended December 31,
2022 finance costs decreased by $7.4
million, from $8.3 million for
the year ended December 31, 2021, to
$1.0 million. Finance costs for the
year ended December 31, 2022 were net
of $5.1 million of borrowing costs
capitalized to the Lion Campus construction and to development
costs. Excluding the impact of capitalized borrowing costs, finance
costs decreased by $2.2 million
compared to the year ended December 31,
2021. The decrease was driven primarily by lower interest
expense on long-term debt, the non-recurrence of interest expense
on convertible debt instruments that was repaid in fiscal 2021 and
accretion expense on retractable common shares which were repaid on
May 6, 2021, and the gain on
derecognition of a financial liability (which occurred as a result
of the agreement with a private company relating to the previous
acquisition of dealership rights in certain territories in
the United States maturing on
May 7, 2022), partially offset by an
increase in financing costs related to the establishment of the
Company's "at-the-market" program and the issuance of the 2022
Warrants and interest on lease liabilities, including for the
Joliet Facility.
Foreign Exchange Loss
Foreign exchange losses for both periods relate primarily to the
revaluation of net monetary assets denominated in foreign
currencies to the functional currencies of the related Lion
entities. For three months ended December
31, 2022, foreign exchange loss was $0.6 million, compared a loss of $2.3 million in the corresponding period in the
prior year, largely as a result of a lesser weakening of the
Canadian dollar relative to the U.S. dollar during the three months
ended December 31, 2022, as compared
to the three months ended December 31,
2021.
Foreign exchange losses for both periods relate primarily to the
revaluation of net monetary assets denominated in foreign
currencies to the functional currencies of the related Lion
entities. Foreign exchange loss for the year ended December 31, 2022, was $2.0 million compared to a loss of $1.0 million year ended December 31, 2021, largely as a result of
stronger weakening of the Canadian dollar relative to the U.S.
dollar during 2022, as compared to 2021.
Change in Fair Value of Share Warrant
Obligations
Change in fair value of share warrant obligations moved from a
gain of $46.6 million for the three
months ended December 31, 2021, to a
gain of $15.4 million, for the three
months ended December 31, 2022. The
gain for the three months ended December 31,
2022, was related to the warrants issued to a customer in
July 2020, and the public and private
warrants issued as part of the closing of the Company's business
combination on May 6, 2021, and the
2022 Warrants issued in December
2022, and resulted mainly from the decrease in the market
price of Lion equity as compared to the previous valuations.
Change in fair value of share warrant obligations resulted in a
gain of $101.5 million for the year
ended December 31, 2022, compared to
a gain of $85.8 million for the year
ended December 31, 2021, related to
the warrants issued to a customer in July
2020, the public and private warrants issued as part of the
closing of the Company's business combination on May 6, 2021, and the 2022 Warrants issued in
December 2022. The gain for the year
ended December 31, 2022 results
mainly from the decrease in the market price of Lion equity as
compared to the previous valuations.
Net Earnings (Loss)
The net loss for the three months ended December 31, 2022 as compared to the net earnings
for the corresponding prior period were largely due to the lower
decrease in the fair value of share warrant obligations (resulting
in a lower gain) discussed in "Change in fair value of share
warrant obligations" above, a gross loss (versus gross profit in
the prior period), higher administrative and selling expenses
(excluding share-based compensation), and higher finance costs,
partially offset by lower non-cash share-based compensation.
For the year ended December 31,
2022, net earnings increased by $61.1
million, from a net loss of $43.3
million for the year ended December
31, 2021, to net earnings of $17.8
million. The increase in net earnings for the year ended
December 31, 2022 as compared to the
year ended December 31, 2021 was
largely due to lower non-cash share-based compensation, lower
transaction and finance costs, and the higher gain on the fair
value of share warrant obligations during discussed in "Change in
fair value of share warrant obligations" above, partially offset by
higher gross loss and higher administrative and selling expenses
(excluding share-based compensation).
CONFERENCE CALL
A conference call and webcast will be held on March 10,
2023, at 8:30 a.m. (Eastern Time) to
discuss the results. To participate in the conference call, dial
226) 828-7575 or (833) 950-0062 (toll free) using the Access Code
319983. An investor presentation and a live webcast of the
conference call will also be available at www.thelionelectric.com
under the "Events and Presentations" page of the "Investors"
section. An archive of the event will be available for a period of
time shortly after the conference call.
FINANCIAL REPORT
This release should be read together with the audited annual
audited consolidated financial statements of the Company and the
related notes for the years ended December
31, 2022 and 2021, and the related management discussion and
analysis ("MD&A") for the three and twelve months ended
December 31, 2022, which will be
filed by the Company with applicable Canadian securities regulatory
authorities and with the U.S. Securities and Exchange Commission,
and which will be available on SEDAR as well as on our website at
www.thelionelectric.com.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at
December 31, 2022 and December 31,
2021
(Audited, in US dollars)
|
Dec 31,
2022
|
|
Dec 31, 2021
|
|
$
|
|
$
|
|
ASSETS
|
|
|
|
|
Current
|
|
|
|
|
Cash
|
88,266,985
|
|
241,702,030
|
|
Accounts
receivable
|
62,971,542
|
|
37,899,085
|
|
Inventories
|
167,191,935
|
|
115,978,979
|
|
Prepaid expenses and
other current assets
|
5,067,513
|
|
4,647,163
|
|
Current
assets
|
323,497,975
|
|
400,227,257
|
|
Non-current
|
|
|
|
|
Other non-current
assets
|
1,073,226
|
|
793,298
|
|
Property, plant and
equipment
|
160,756,328
|
|
32,668,158
|
|
Right-of-use
assets
|
60,508,354
|
|
60,902,362
|
|
Intangible
assets
|
151,364,023
|
|
81,899,830
|
|
Contract
asset
|
13,211,006
|
|
14,113,415
|
|
Non-current
assets
|
386,912,937
|
|
190,377,063
|
|
Total
assets
|
710,410,912
|
|
590,604,320
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Current
|
|
|
|
|
Trade and other
payables
|
75,857,013
|
|
40,409,565
|
|
Current portion of
long-term debt and other debts
|
24,713
|
|
13,015,584
|
|
Current portion of
lease liabilities
|
5,210,183
|
|
4,691,344
|
|
Current
liabilities
|
81,091,909
|
|
58,116,493
|
|
Non-current
|
|
|
|
|
Long-term debt and
other debts
|
110,648,635
|
|
62,086
|
|
Lease
liabilities
|
58,310,032
|
|
57,517,973
|
|
Share warrant
obligations
|
23,243,563
|
|
106,225,934
|
|
Non-current
liabilities
|
192,202,230
|
|
163,805,993
|
|
Total
liabilities
|
273,294,139
|
|
221,922,486
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
Share
capital
|
475,950,194
|
|
418,709,160
|
|
Contributed
surplus
|
134,365,664
|
|
122,637,796
|
|
Deficit
|
(151,979,960)
|
|
(169,755,726)
|
|
Cumulative translation
adjustment
|
(21,219,125)
|
|
(2,909,396)
|
|
Total shareholders'
equity
|
437,116,773
|
|
368,681,834
|
|
Total shareholders'
equity and liabilities
|
710,410,912
|
|
590,604,320
|
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) AND COMPREHENSIVE
EARNINGS (LOSS)
For the three months and years ended
December 31, 2022 and
2021
(in US dollars)
|
(Unaudited)
|
|
(Audited)
|
|
Three months
ended
|
|
Year
ended
|
|
Dec 31,
2022
|
|
Dec 31,
2021
|
|
Dec 31,
2022
|
|
Dec 31,
2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Revenue
|
46,768,660
|
|
22,870,406
|
|
139,914,470
|
|
57,710,204
|
|
Cost of
sales
|
51,533,378
|
|
20,690,602
|
|
152,861,775
|
|
57,664,749
|
|
Gross profit
(loss)
|
(4,764,718)
|
|
2,179,804
|
|
(12,947,305)
|
|
45,455
|
|
|
|
|
|
|
|
|
|
Administrative
expenses
|
9,996,995
|
|
12,181,342
|
|
44,843,042
|
|
78,422,622
|
|
Selling
expenses
|
5,643,130
|
|
4,789,563
|
|
22,973,972
|
|
27,719,888
|
|
Transaction
costs
|
—
|
|
—
|
|
—
|
|
13,654,851
|
|
Operating
loss
|
(20,404,843)
|
|
(14,791,101)
|
|
(80,764,319)
|
|
(119,751,906)
|
|
|
|
|
|
|
|
|
|
Finance
costs
|
(891,329)
|
|
1,193,959
|
|
955,422
|
|
8,332,477
|
|
Foreign exchange
loss
|
558,551
|
|
2,336,548
|
|
1,972,679
|
|
1,036,840
|
|
Change in fair value of
share warrant obligations
|
(15,434,253)
|
|
(46,587,319)
|
|
(101,468,186)
|
|
(85,795,903)
|
|
Net income
(loss)
|
(4,637,812)
|
|
28,265,711
|
|
17,775,766
|
|
(43,325,320)
|
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
|
|
Item that will be
subsequently reclassified to net earnings (loss)
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
3,522,926
|
|
3,734,078
|
|
(18,309,729)
|
|
321,188
|
|
Comprehensive
earnings (loss) for the period
|
(1,114,886)
|
|
31,999,789
|
|
(533,963)
|
|
(43,004,132)
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share
|
(0.02)
|
|
0.15
|
|
0.09
|
|
(0.27)
|
|
Diluted earnings (loss)
per share
|
(0.02)
|
|
0.14
|
|
0.09
|
|
(0.27)
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three
months and years ended December 31,
2022 and 2021
(in US Dollars)
|
(Unaudited)
|
|
(Audited)
|
|
Three months
ended
|
|
Year
ended
|
|
Dec 31,
2022
|
|
Dec 31, 2021
|
|
Dec 31,
2022
|
|
Dec 31, 2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
|
Net earnings (loss) for
the period
|
(4,637,812)
|
|
28,265,711
|
|
17,775,766
|
|
(43,325,320)
|
|
Non-cash
items:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
3,723,559
|
|
1,642,987
|
|
11,492,473
|
|
5,544,175
|
|
Share-based
compensation
|
2,521,960
|
|
5,080,008
|
|
12,362,070
|
|
71,081,047
|
|
Accretion expense on
common shares, retractable
|
—
|
|
—
|
|
—
|
|
2,031,863
|
|
Accretion and
revaluation expense on balance of purchase price payable related to
the acquisition of the dealership rights
|
—
|
|
(102,831)
|
|
82,850
|
|
125,290
|
|
Accretion expense on
convertible debt instruments
|
—
|
|
—
|
|
—
|
|
2,503,097
|
|
Gain on derecognition
of the balance of purchase price payable related to the acquisition
of the dealership rights
|
—
|
|
—
|
|
(2,130,583)
|
|
—
|
|
Change in fair value
of share warrant obligations
|
(15,434,253)
|
|
(46,587,319)
|
|
(101,468,186)
|
|
(85,795,903)
|
|
Unrealized foreign
exchange loss (gain)
|
(10,785)
|
|
250,524
|
|
821,424
|
|
17,973
|
|
Net change in non-cash
working capital items
|
(16,768,935)
|
|
(47,189,473)
|
|
(58,488,611)
|
|
(83,150,851)
|
|
Cash flows used in
operating activities
|
(30,606,266)
|
|
(58,640,393)
|
|
(119,552,797)
|
|
(130,968,629)
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
|
Acquisition of
property, plant and equipment
|
(39,642,755)
|
|
(10,436,899)
|
|
(129,573,638)
|
|
(19,825,006)
|
|
Addition to intangible
assets
|
(20,805,023)
|
|
(9,174,252)
|
|
(78,284,126)
|
|
(44,956,423)
|
|
Disposition of
property, plant and equipment
|
—
|
|
—
|
|
24,413
|
|
—
|
|
Government assistance
related to property, plant and equipment and intangible
assets
|
3,226,696
|
|
236,369
|
|
3,226,696
|
|
2,182,923
|
|
Cash flows used in
investing activities
|
(57,221,082)
|
|
(19,374,782)
|
|
(204,606,655)
|
|
(62,598,506)
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
|
Net change in credit
facilities
|
—
|
|
—
|
|
—
|
|
(19,188,863)
|
|
Loans on research and
development tax credits receivable and subsidies
receivable
|
22,233,751
|
|
—
|
|
22,233,751
|
|
2,934,384
|
|
Repayment of loans on
research and development tax
credits and subsidies
receivable
|
(9,926,471)
|
|
(83,542)
|
|
(9,926,471)
|
|
(2,829,254)
|
|
Increase in long-term
debt and other debts
|
40,404,648
|
|
—
|
|
89,342,762
|
|
15,775,473
|
|
Repayment of long-term
debt and other debts
|
(2,038)
|
|
(131,024)
|
|
(422,423)
|
|
(41,611,760)
|
|
Repayment of
convertible debt instruments
|
—
|
|
—
|
|
—
|
|
(23,903,068)
|
|
Payment of lease
liabilities
|
(1,219,492)
|
|
(433,421)
|
|
(4,977,183)
|
|
(2,093,371)
|
|
Proceeds from issuance
of shares through private
placement, net of
issuance costs
|
—
|
|
—
|
|
—
|
|
196,255,491
|
|
Proceeds from issuance
of shares through "at-the-market" equity program
|
10,164,952
|
|
—
|
|
29,351,308
|
|
—
|
|
Proceeds from the
issuance of shares through the December 2022 Offering -
Warrants
|
19,913,196
|
|
—
|
|
19,913,196
|
|
—
|
|
Proceeds from the
issuance of shares through the December 2022 Offering- Common
Shares
|
27,264,038
|
|
—
|
|
27,264,038
|
|
—
|
|
Proceeds from the
issuance of shares through exercise of stock options and
warrants
|
19,375
|
|
400,341
|
|
23,173
|
|
1,124,940
|
|
Proceeds from issuance
of shares through business combination transaction
|
—
|
|
—
|
|
—
|
|
308,232,870
|
|
Cash flows from
financing activities
|
108,851,959
|
|
(247,646)
|
|
172,802,151
|
|
434,696,842
|
|
Effect of exchange rate
changes on cash held in foreign currency
|
628,959
|
|
2,118,127
|
|
(2,077,744)
|
|
663,399
|
|
Net (decrease)
increase in cash
|
21,653,570
|
|
(76,144,694)
|
|
(153,435,045)
|
|
241,793,106
|
|
Cash (bank overdraft),
beginning of year
|
66,613,415
|
|
317,846,724
|
|
241,702,030
|
|
(91,076)
|
|
Cash, end of
year
|
88,266,985
|
|
241,702,030
|
|
88,266,985
|
|
241,702,030
|
|
Other information on
cash flows related to operating activities:
|
|
|
|
|
|
|
|
|
Interest
paid
|
835,592
|
|
1,479,447
|
|
2,386,930
|
|
5,722,466
|
|
Interest paid under
lease liabilities
|
819,786
|
|
139,517
|
|
3,162,932
|
|
443,740
|
NON-IFRS MEASURES AND OTHER PERFORMANCE METRICS
This press release makes reference to Adjusted EBITDA, which is
a non-IFRS financial measure, as well as other performance metrics,
including the Company's order book, which are defined below. These
measures are not recognized measures under IFRS, do not have a
standardized meaning prescribed by IFRS and are therefore unlikely
to be comparable to similar measures presented by other companies.
Rather, these measures are provided as additional information to
complement those IFRS measures by providing further understanding
of the Company's results of operations from management's
perspective. Accordingly, they should not be considered in
isolation nor as a substitute for analysis of the Company's
financial information reported under IFRS. Lion compensates for
these limitations by relying primarily on Lion's IFRS results and
using Adjusted EBITDA and order book on a supplemental basis.
Readers should not rely on any single financial measure to evaluate
Lion's business.
Adjusted EBITDA
"Adjusted EBITDA" is defined as net earnings (loss) before
finance costs, income tax expense or benefit, and depreciation and
amortization, adjusted for share-based compensation, changes in
fair value of share warrant obligations, foreign exchange (gain)
loss and transaction and other non-recurring expenses. Adjusted
EBITDA is intended as a supplemental measure of performance that is
neither required by, nor presented in accordance with, IFRS. Lion
believes that the use of Adjusted EBITDA provides an additional
tool for investors to use in evaluating ongoing operating results
and trends and in comparing Lion's financial measures with those of
comparable companies, which may present similar non-IFRS financial
measures to investors. However, readers should be aware that when
evaluating Adjusted EBITDA, Lion may incur future expenses similar
to those excluded when calculating Adjusted EBITDA. In addition,
Lion's presentation of these measures should not be construed as an
inference that Lion's future results will be unaffected by unusual
or non-recurring items. Lion's computation of Adjusted EBITDA may
not be comparable to other similarly entitled measures computed by
other companies, because all companies may not calculate Adjusted
EBITDA in the same fashion. Readers should review the
reconciliation of net earnings (loss), the most directly comparable
IFRS financial measure, to Adjusted EBITDA presented by the Company
under section 13.0 of the Company's MD&A for the three and
twelve months ended December 31, 2022 entitled "Results of
Operations - Reconciliation of Adjusted EBITDA."
Order Book
This press release also makes reference to the Company's "order
book" with respect to vehicles (trucks and buses) as well as
charging stations. The Company's vehicle and charging stations
order book is determined by management based on purchase orders
that have been signed, orders that have been formally confirmed by
clients, or products in respect of which formal joint applications
for governmental subsidies or economic incentives have been made by
the applicable clients and the Company. The order book is expressed
as a number of units or a total dollar value, which dollar value is
determined based on the pricing of each unit included in the order
book as further explained under "Pricing" in section 10.0 of the
Company's MD&A for the three and twelve months ended
December 31, 2022 entitled "Order Book". The vehicles included
in the vehicle order book as of March 9, 2023 provided for a
delivery period ranging from a few months to the end of the year
ending December 31, 2025.
Substantially all deliveries are subject to the granting of
subsidies and incentives with processing times that are subject to
important variations, and there has been in the past and the
Company expects there will continue to be variances between the
expected delivery periods of orders and the actual delivery times,
and certain delays could be significant. Such variances or delays
could result in the loss of a subsidy or incentive and/or in the
cancellation of certain orders, in whole or in part.
The Company's presentation of the order book should not be
construed as a representation by the Company that the vehicles and
charging stations included in its order book will translate into
actual sales. See the section below for a full description of the
methodology used by the Company in connection with the order book
and certain important risks and uncertainties relating to such
methodology and the presentation of the order book.
|
General
Principle:
|
The Company's vehicle
and charging stations order book is determined by management based
on purchase orders that have been signed, orders that have been
formally confirmed by clients or products in respect of which
formal joint applications for governmental subsidies or economic
incentives have been made by the applicable clients and the
Company. The order book is expressed as a number of units or a
total dollar value, which dollar value is determined based on the
pricing of each unit included in the order book as further
explained below under the section entitled "Pricing".
The vehicles included
in the vehicle order book as of March 9, 2023 provided for a
delivery period ranging from a few months to the end of the year
ending December 31, 2025. Substantially all of the vehicle orders
included in the order book are subject to the granting of
governmental subsidies and incentives, including programs in
respect of which applications relating to vehicles of Lion have not
yet been fully processed to date. The processing times of
governmental subsidies and incentives are also subject to important
variations. As further described below under the sections entitled
"Delivery Periods" and "Ongoing Evaluation; Risk Factors", there
has been in the past and the Company expects there will continue to
be variances between the expected delivery periods of orders and
the actual delivery times, and certain delays could be significant.
Such variances or delays could result in the loss of a subsidy or
incentive and/or in the cancellation of certain orders, in whole or
in part.
The Company's
presentation of the order book should not be construed as a
representation by the Company that the vehicles and charging
stations included in its order book will translate into actual
sales.
|
|
Delivery
Periods:
|
The Company's order
book refers to products that have not yet been delivered but which
are reasonably expected by management to be delivered within a time
period that can be reasonably estimated and includes, in the case
of charging stations, services that have not been completed but
which are reasonably expected by management to be completed in
connection with the delivery of the product.
Purchase orders and
applications relating to vehicles of Lion generally provide for a
time period during which the client expects delivery of the
vehicles. Such period can vary from a specific date, a number or
range of months after the issuance of the order or application, or
a calendar year. The vehicles included in the vehicle order book as
of March 9, 2023 provided for a delivery period, subject to
the satisfaction of the conditions set forth in each order (which,
in substantially all cases as further discussed herein, relate to
the approval of governmental subsidies and grants), ranging from a
few months to the end of the year ending December 31, 2025, which
corresponds to the latest date by which claims are required to be
made according to the current eligibility criteria of the Federal's
Infrastructure Canada's Zero-Emission Transit Fund ("ZETF"), unless
otherwise agreed by Infrastructure Canada. Delivery periods are
disclosed from time to time by the Company when available in
respect of material orders. Delivery periods should not be
construed as a representation or a guarantee by the Company that
the actual delivery time will take place as scheduled. Given the
nature of the business and the products of the Company, the implied
lead time for the production and delivery of a vehicle (which may
be impacted, among other things, by supply chain challenges or
changes in specifications), the nature of certain customers of the
Company (in many cases, fleet owners operating capital intensive
operations which require financing and ongoing scheduling
flexibility), and the fact that, as further described herein,
substantially all of the vehicle orders included in the order book
are subject to the granting of governmental subsidies and
incentives, actual delivery times may be subject to important
variations or delays. Please refer to the section entitled "Ongoing
Evaluation; Risk Factors" below regarding the potential impact of
variations or delays in deliveries.
|
|
Pricing:
|
When the Company's
order book is expressed as an amount of sales, such amount has been
determined by management based on the current specifications or
requirements of the applicable order, assumes no changes to such
specifications or requirements and, in cases where the pricing of a
product or service may vary in the future, represents management's
reasonable estimate of the prospective pricing as of the time such
estimate is reported. A small number of vehicles included in the
order book have a pricing that remains subject to confirmation
based on specifications and other options to be agreed upon in the
future between the applicable client and the Company. For purposes
of the determination of the order book and the value allocated to
such orders, management has estimated the pricing based on its
current price lists and certain other assumptions relating to
specifications and requirements deemed reasonable in the
circumstances.
|
|
Performance
Metric:
|
The order book is
intended as a supplemental measure of performance that is neither
required by, nor presented in accordance with, IFRS, and is neither
disclosed in nor derived from the financial statements of the
Company. The Company believes that the disclosure of its order book
provides an additional tool for investors to use in evaluating the
Company's performance, market penetration for its products, and the
cadence of capital expenditures and tooling.
The Company's
computation of its order book is subject to the specific
methodology described herein and may not be comparable to other
similarly entitled measures computed by other companies, because
all companies may not calculate their order book in the same
fashion. Other companies also sometimes refer to or use "order
backlog" or "order intake" as performance metrics, which are most
likely not calculated on the same basis as the Company's order
book. In addition, as explained above, the Company's presentation
of the order book is calculated based on the orders and the
applications made as of the time that the information is presented,
and it is not based on the Company's assessment of future events
and should not be construed as a representation by the Company that
the vehicles and charging stations included in its order book will
translate into actual sales.
|
|
Ongoing Evaluation;
Risk Factors:
|
A portion of the
vehicles or charging stations included in the Company's order book
may be cancellable in certain circumstances (whether by reason of a
delivery delay, unavailability of a subsidy or incentive or
otherwise) within a certain period. Management reviews the
composition of the order book every time it is reported in order to
determine whether any orders should be removed from the order book.
For purposes of such exercise, management identifies orders that
have been or are reasonably likely to be cancelled and examines,
among other things, whether conditions attaching to the order are
reasonably likely to result in a cancellation of the order in
future periods as well as any other available information deemed
relevant, including ongoing dialogue with clients. Such exercise
may result from time to time in orders that have previously been
included in the order book being removed even if they have not been
formally canceled by the client.
The Company cannot
guarantee that its order book will be realized in full, in a timely
manner, or at all, or that, even if realized, revenues generated
will result in profits or cash generation as expected, and any
shortfall may be significant. The Company's conversion of its order
into actual sales is dependent on various factors, including those
described below and under section 23.0 of the Company's MD&A
for the three and twelve months ended December 31, 2022 entitled
"Risk Factors". For instance, a customer may voluntarily or
involuntarily default on an order, may become subject to bankruptcy
or insolvency or cease its business operations. In addition,
substantially all of the vehicle orders included in the order book
are subject to conditions relating to the granting of governmental
subsidies or incentives or a specified timing for the delivery of
the vehicle and, in a limited number of cases, the availability of
certain specifications and options or the renewal of certain routes
by governmental or school authorities. As a result, the Company's
ability to convert its order book into actual sales is highly
dependent on the granting and timing of governmental subsidies and
incentives, most notably subsidies and incentives under the Quebec
government's 2030 Plan for a Green Economy (the "Quebec Green
Economy Plan"), under the Federal's Infrastructure ZETF, the
Government of Canada Incentives for Medium- and Heavy-Duty
Zero-Emission Vehicles (iMHZEV) Program, the U.S. Environmental
Protection Agency Clean School Bus Program and California's Hybrid
and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP).
Approximately half of the vehicles included in the order book are
contingent upon grants under the ZETF, in respect of which
applications relating to vehicles of Lion have not yet been fully
processed to date and December 31, 2025 is the latest date by which
claims are required to be made according to the current eligibility
criteria of the program, unless otherwise agreed by Infrastructure
Canada. Any termination, modification, delay or suspension of any
governmental subsidies and incentives, including, most importantly
as of the date hereof, the ZETF or the Quebec Green Economy Plan,
could result in delayed deliveries or the cancellation of all or
any portion of orders, which, in turn, could have a material and
adverse effect on the Company's business, results of operations or
financial condition.
The Company's
conversion of its order book into actual sales is also dependent on
its ability to economically and timely manufacture its vehicles, at
scale. The Company delivered 196 vehicles during the year ended
December 31, 2021, and 519 vehicles during the year ended December
31, 2022. As of March 9, 2023, the Company's vehicle order
book stood at 2,468 vehicles. The execution of the Company's growth
strategy and the conversion of its order book, which currently
provides for deliveries ranging from a few months to the end of the
year ending December 31, 2025, will therefore require significant
ramp-up in its production. The Company's Saint-Jerome facility
currently has an estimated annual production capacity of 2,500
vehicles at full scale and the Company is in the process of
establishing its operations at the Joliet Facility and the Lion
Campus (see section 8.0 entitled "Operational Highlights" and
"Product Development and Manufacturing" under section 11.0 entitled
"Key Factors Affecting Lion's Performance" of the Company's
MD&A for the three and twelve months ended December 31, 2022
for further details), the Company has limited experience to date in
high volume manufacturing of its vehicles. In addition, as of
March 9, 2023, 428 units included in the order book,
consisting mainly of LionA and LionD buses and Lion8T trucks and
representing a combined total order value of approximately $155
million, related to products which had been developed and were
being sold, but that were not currently in commercial production.
See "Products and Solutions" in section 6.2 of the Company's Annual
Information Form for the year ended December 31, 2022 entitled
"General Development of the Business". Any failure by the Company
to successfully develop its vehicles, source its key components,
and scale its manufacturing processes within projected costs and
timelines could have a material adverse effect on its business,
results of operations or financial condition. As a result, the
Company's realization of its order book is subject to a number of
risks and uncertainties, including the risks described in sections
3.0 and 23.0 of the Company's MD&A for the three and twelve
months ended December 31, 2022 entitled "Caution Regarding
Forward-Looking Statements" and "Risk Factors", respectively, and
there can be no assurance that the Company will be successful in
converting all or a significant portion of its order book into
actual sales.
|
RECONCILIATION OF ADJUSTED EBITDA
The following table reconciles net earnings (loss) to Adjusted
EBITDA for the three months ended December
31, 2022 and 2021, and the years ended December 31, 2022 and 2021:
|
Three months
ended
December 31,
|
|
Year ended
December 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2020
|
|
(in
thousands)
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$46,769
|
|
$22,870
|
|
$139,914
|
|
$57,710
|
|
$23,423
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss)
|
($4,638)
|
|
$28,266
|
|
$17,776
|
|
($43,325)
|
|
($97,352)
|
|
Finance
costs
|
($891)
|
|
$1,194
|
|
$955
|
|
$8,332
|
|
$8,667
|
|
Depreciation and
amortization
|
$3,724
|
|
$1,643
|
|
$11,492
|
|
$5,260
|
|
$2,696
|
|
Share-based
compensation(1)
|
$2,522
|
|
$5,080
|
|
$12,362
|
|
$71,081
|
|
$65,249
|
|
Change in fair value of
share warrant obligations(2)
|
($15,434)
|
|
($46,587)
|
|
($101,468)
|
|
($85,796)
|
|
$16,847
|
|
Foreign exchange
(gain) loss(3)
|
$559
|
|
$2,337
|
|
$1,973
|
|
$1,037
|
|
($681)
|
|
Transaction and other
non-recurring expenses(4)
|
$245
|
|
$616
|
|
$2,140
|
|
$15,815
|
|
$233
|
|
Income taxes
|
–
|
|
–
|
|
–
|
|
–
|
|
–
|
|
Adjusted
EBITDA
|
($13,915)
|
|
($7,453)
|
|
($54,770)
|
|
($27,596)
|
|
($4,340)
|
|
(1)
|
Represents non-cash
expenses recognized in connection with the issuance and revaluation
to fair value of stock options issued to participants under Lion's
stock option plan as described in note 15 to the annual audited
consolidated financial statements as at and for years ended
December 31, 2022 and 2021.
|
|
(2)
|
Represents non-cash
change in the fair value of the share warrant obligations as
described in note 13 to the annual audited consolidated financial
statements as at and for years ended December 31, 2022 and
2021.
|
|
(3)
|
Represents non-cash
losses (gains) relating to foreign exchange translation.
|
|
(4)
|
For the year ended
December 31, 2022, represents professional fees related mostly to
supply chain and process optimization initiatives. For the year
ended December 31, 2021, represents transaction costs related to
the Business Combination which was completed on May 6, 2021, as
described in note 4 to the annual audited consolidated financial
statements, professional fees related to financing transactions,
and other non-recurring professional fees. For the year ended
December 31, 2020, represents professional fees related to
financing transactions and other non-recurring professional
fees.
|
ABOUT LION ELECTRIC
Lion Electric is an innovative manufacturer
of zero-emission vehicles. The company creates, designs
and manufactures all-electric class 5 to class 8 commercial
urban trucks and all-electric buses and minibuses for the school,
paratransit and mass transit segments. Lion is a North
American leader in electric transportation and designs, builds
and assembles many of its vehicles' components, including chassis,
battery packs, truck cabins and bus bodies.
Always actively seeking new and reliable technologies, Lion
vehicles have unique features that are specifically adapted to its
users and their everyday needs. Lion believes that transitioning to
all-electric vehicles will lead to major improvements in our
society, environment and overall quality of life. Lion shares are
traded on the New York Stock Exchange and the Toronto Stock
Exchange under the symbol LEV.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking information" and
"forward-looking statements" within the meaning of applicable
securities laws and within the meaning of the United States Private
Securities Litigation Reform Act of 1995 (collectively,
"forward-looking statements"). Any statements contained in this
press release that are not statements of historical fact, including
statements about Lion's beliefs and expectations, are
forward-looking statements and should be evaluated as such.
Forward-looking statements may be identified by the use of words
such as "believe," "may," "will," "continue," "anticipate,"
"intend," "expect," "should," "would," "could," "plan," "project,"
"potential," "seem," "seek," "future," "target" or other similar
expressions and any other statements that predict or indicate
future events or trends or that are not statements of historical
matters, although not all forward-looking statements may contain
such identifying words. These forward-looking statements include
statements regarding the Company's order book and the Company's
ability to convert it into actual sales, the expected production
capacity of the Company's manufacturing facilities, the Company's
U.S. manufacturing facility project and the Company's battery plant
and innovation center project in Quebec, the Company's future growth and
long-term strategy, the Company's expected product pipeline and the
launch and commercial production of certain platforms and models.
Such forward-looking statements are based on a number of estimates
and assumptions that Lion believes are reasonable when made,
including that Lion will be able to retain and hire key personnel
and maintain relationships with customers, suppliers and other
business partners, that Lion will continue to operate its business
in the normal course, that Lion will be able to implement its
growth strategy, that Lion will be able to successfully and timely
complete the construction of, and successfully and timely establish
its operations and ramp-up manufacturing capacity at, its U.S.
manufacturing facility and its Quebec battery plant and innovation center,
that Lion will not suffer any supply chain challenges or any
material disruption in the supply of raw materials on competitive
terms, that Lion will be able to maintain its competitive position,
that Lion will continue to improve its operational, financial and
other internal controls and systems to manage its growth and size,
that Lion will be able to benefit, either directly or indirectly
(including through applications made by the Company and/or its
clients), from governmental subsidies and incentives, and that Lion
will be able to secure additional funding through equity or debt
financing on terms acceptable to Lion and in the amounts needed
when required in the future. Such estimates and assumptions are
made by Lion in light of the experience of management and their
perception of historical trends, current conditions and expected
future developments, as well as other factors believed to be
appropriate and reasonable in the circumstances. However, there can
be no assurance that such estimates and assumptions will prove to
be correct.
By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future. Lion
believes that these risks and uncertainties include the
following:
- any adverse changes in U.S. or Canadian general economic,
business, market, financial, political or legal conditions,
including as a consequence of the ongoing uncertainties relating to
inflation and interest rates;
- any inability to ramp-up the production of Lion's products and
meet project construction and other project milestones and
timelines;
- any inability to meet its customers' business needs;
- any inability to successfully and economically manufacture and
distribute its vehicles at scale;
- any unavailability, reduction, discriminatory application,
delay in processing or elimination of governmental programs,
subsidies or economic incentives due to policy changes, government
regulation or otherwise;
- any inability to execute the Company's growth strategy;
- any adverse effects of the current military conflict between
Russia and Ukraine, which continues to affect economic
and global financial markets and exacerbate ongoing economic
challenges;
- any unfavorable fluctuations and volatility in the availability
or price of raw materials included in components used to
manufacture the Company's products, including battery cells,
modules and packs;
- the reliance on key suppliers and any inability to maintain an
uninterrupted supply of raw materials;
- the outcome of any legal proceedings that may be instituted by
or against the Company from time to time, including the ongoing
matter relating to supply of battery packs from Romeo Systems,
Inc.;
- any inability to reduce total cost of ownership of electric
vehicles sold by the Company over time;
- the reliance on key management and any inability to attract
and/or retain key personnel;
- labor shortages (including as a result of employee departures,
turnover, and demands for higher wages) which may force the Company
to operate at reduced capacity, to lower its production and
delivery rates or lower its growth plans, and could pose additional
challenges related to employee compensation;
- any inability to meet the expectations of the Company's
customers in terms of products, specifications, and services;
- any inability to maintain the Company's competitive
position;
- any inability to reduce the Company's costs of supply over
time;
- any inability to maintain and enhance the Company's reputation
and brand;
- any significant product repair and/or replacement due to
product warranty claims or product recalls;
- any failure of information technology systems or any
cybersecurity and data privacy breaches or incidents;
- any event or circumstance resulting in the Company's inability
to convert its order book into actual sales, including the
unavailability, reduction, discriminatory application, delay in
processing or elimination or discriminatory application of
government programs, subsidies and economic incentives;
- any inability to raise additional funds to meet its capital
requirements and pursue its growth strategy when and in the amounts
needed;
- any inability to secure adequate insurance coverage or a
potential increase in insurance costs; and
- natural disasters, epidemic or pandemic outbreaks, boycotts and
geo-political events such as civil unrest and acts of terrorism,
the current military conflict between Russia and Ukraine or similar disruptions
These and other risks and uncertainties related to the
businesses of Lion are described in greater detail in section 23.0
entitled "Risk Factors" of the Company's annual MD&A for the
fiscal year 2022. Many of these risks are beyond Lion's
management's ability to control or predict. All forward-looking
statements attributable to Lion or persons acting on its behalf are
expressly qualified in their entirety by the cautionary statements
contained and risk factors identified in the Company's annual
MD&A for the fiscal year 2022 and in other documents filed with
the applicable Canadian regulatory securities authorities and the
Securities and Exchange Commission (the "SEC'').
Because of these risks, uncertainties and assumptions, readers
should not place undue reliance on these forward-looking
statements. Furthermore, forward-looking statements speak only as
of the date they are made. Except as required under applicable
securities laws, Lion undertakes no obligation, and expressly
disclaims any duty, to update, revise or review any forward-looking
information, whether as a result of new information, future events
or otherwise.
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SOURCE Lion Electric
