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Lightning eMotors delays quarterly report citing supplier dispute

LOVELAND — Lightning eMotors Inc., the Loveland manufacturer of light electrically powered trucks and buses, is delaying the release of its first quarter 2023 earnings report, as, the company said, “it requires additional time to finalize certain of the disclosures.”

The delay is necessary, according to Lightning, “due to the complexity of the accounting associated with the company’s recall of vehicles containing batteries purchased from Romeo Power Systems.

Lightning “expects the delay will be no more than a few days,” but has not set a date for the quarterly report release. 

The Loveland firm, which employs about 190 people, has been in an ongoing spat with supplier Romeo Systems Inc. (NYSE: RMO). Lightning sued Romeo in March, claiming that it failed to meet delivery schedules for batteries that it was committed by contract to deliver, and that Nikola Motor Co. (Nasdaq: NKL), which bought Romeo in August 2022, interfered in the contract.

Lightning eMotors alleged in the lawsuit that it and Romeo signed a contract in July 2020 in which Romeo would supply battery packs for Lightning vehicles. Romeo was permitted under that contract to accept or reject purchase orders in writing within seven days of receipt. If batteries were not delivered on time, the contract permitted Lightning to cancel the order and Romeo would indemnify Lightning for losses attributable to the failure to deliver, the lawsuit said.

Orders placed in June 2022 were accepted, then delayed. Romeo claimed its production lines were fulfilling a different product order, the lawsuit said.

Lightning also alleged that defects in the battery packs that were delivered resulted in a recall and that Romeo failed to correct the issue.

In the meantime, Romeo was being purchased by Nikola in a deal that was announced in August and closed in October. Nikola, which manufactures e-powered semi trucks — a class of vehicle not produced by Lightning — intended to use Romeo as its in-house supplier of battery packs. Nikola disclosed in a Securities and Exchange Commission filing that it had concerns about Romeo being able to supply it with the quantity of battery packs that it needed because of contract work for other manufacturers.

“We need as many batteries as [Romeo] can produce,” Nikola’s CEO was quoted in announcing the acquisition.

Nikola terminated the Lightning contract in December.

The lawsuit also said that failure of Romeo to deliver resulted in Lightning’s inability to deliver vehicles it was contracted to produce. 

Lightning eMotors has spent months navigating tumultuous legal and financial waters. 

The company finds itself on the other side of the legal ledger in a separate case that accuses Lightning eMotors’ leadership of misleading investors and regulators. 

Last month, the company implemented a reverse stock split in an effort to boost its stock price and maintain its listing on the New York Stock Exchange.

When Lightning reported its fourth quarter 2022 earnings in March, it failed to meet Wall Street expectations, sending its stock plummeting. 

Source: BizWest