Lordstown Motors merger approved
Shareholders of DiamondPeak Holdings Corp. did as expected Thursday and approved the merger with Lordstown Motors Corp., a move that’s expected to inject $675 million into the startup to manufacture the battery-powered Endurance truck when the deal is final.
Shareholders also approved three other proposals relative to the merger: the charter proposal, Nasdaq proposal and 2020 incentive plan proposal that combined with blessing the merger are the final steps toward Lordstown Motors becoming a publicly traded company.
A spokesman for the Lordstown-based company told this newspaper “there are a few formalities left to be completed” and more information will be shared once the merger is officially complete and trading details are finalized.
Lordstown Motors, in the midst of retooling its plant, the former General Motors assembly plant in Lordtown, is targeting the first deliveries for the second half of 2022. The company hopes to expand production to 100,000 by 2024.
Lordstown Motors announced in September it has 40,000 preorders for the truck, which has a sticker price of about $52,000 before tax credits. Barring any cancellations or delays, the preorders represent about $2 billion in revenue.
The new agreement calls for Lordstown Motors to become a wholly-owned subsidiary of New York-based DiamondPeak, a special purpose acquisition company, or “blank check” company, but retain the Lordstown Motors Corp. name.
Shares of the company’s stock will be traded on the Nasdaq exchange under the ticker “RIDE.”
The Nasdaq proposal, according to notice sent to DiamondPeak shareholders, calls for the issuance of 78.8 million shares of Class A common stock to Lordstown Motors stockholders; the issuance of up to 50 million shares of Class A common stock to certain qualified institutional buyers and accredited investors at $10 per share; converting some Class A common stock to Class B common stock; issuing up to 4 million shares of Class A common stock upon the conversion of Lordstown Motors promissory notes; and entitling Brown Gibbons Lang and Co. — the Cleveland-based investment firm helping Lordstown Motors raise capital — to buy 1 percent of the issued and outstanding common stock of DiamondPeak.
Shareholders also approved expanding the size of DiamondPeak’s board of directors from five to nine, including five nominated by Steve Burns, founder of Lordstown Motors.
The board nominated Jane Reiss, Dale Spencer and Mick Kowitz as Class I directors; Michael Gates, Angela Strand and Martin Rucidlo as Class II directors; and David T. Hamamoto, DiamondPeak chairman and CEO, Keith Feldman and Steve Burns, Lordstown Motors founder and CEO, as CLass III directors.
The companies announced the proposed business combination in October. The new company will have an equity value of about $1.6 billion.
DiamondPeak went public in 2019. It operates as a blank-check company — a development stage company with no specific business plan or with the business plan of mergers and acquisitions.