Core Viewpoint - LeEco, once a thriving company, is now deeply in debt with a negative net asset of 21.5 billion yuan and liabilities reaching 23.8 billion yuan, yet it has announced stock investment plans twice this year, including a recent plan to invest 180 million yuan in the capital market [2][3][26] Financial Situation - LeEco's financial condition shows a significant imbalance, with a reported 4.59 billion yuan in consolidated cash at the end of Q3, but only 36,600 yuan in cash at the parent company level, indicating poor financial management [8][9] - The company plans to invest 180 million yuan, which is significantly higher than the 50 million yuan planned in the first half of the year [7] Investment Strategy - The investment strategy includes purchasing stocks in the secondary market, with at least 50% allocated to bank stocks and 80% to components of the CSI 300 index [6][3] - This approach raises concerns about the potential risks to ordinary creditors, as the company appears to be gambling with funds rather than focusing on debt repayment [8][11] Business Operations - LeEco's current operations are supported by its intellectual property from classic TV dramas and light asset businesses, generating an estimated 287 million yuan in internet service revenue and nearly 30 million yuan from film distribution in 2024 [13] - The company has attempted various cross-industry ventures, including entering the fast-food industry and exploring new growth points, but these efforts have not yielded significant results [13][15] Debt Management - The company has a significant debt burden, including nearly 4.8 billion yuan owed to related parties controlled by its founder, Jia Yueting, and must also share approximately 2.065 billion yuan in debt and over 2 billion yuan in repurchase obligations [22] - Effective risk isolation mechanisms are necessary to separate debt from business operations, similar to strategies employed by other companies [24] Conclusion - LeEco's operations are centered around survival, but this should not come at the expense of ordinary citizens' rights. The company must prioritize debt repayment and creditor interests over high-risk investments [26][28] - The capital market is unforgiving to those who gamble with public funds, and sustainable operations are essential for regaining trust and stability [28]

Company Overview - The Lion Electric Company is a manufacturer of zero-emission vehicles, including all-electric school buses, and is a leader in electric transportation in North America [4] - The company designs, builds, and assembles many components of its vehicles, such as chassis, battery packs, truck cabins, and bus bodies [4] Workforce Reduction - The company announced a temporary layoff of approximately 150 employees across all departments in Canada and the United States [1] - Following this reduction, Lion will retain about 160 employees focused on customer maintenance and servicing of school buses and trucks [1] Restructuring Process - The workforce reduction is part of the company's ongoing proceedings under the Companies' Creditors Arrangement Act (CCAA) [2] - The Superior Court of Quebec granted the company protection under the CCAA and approved a sale and investment solicitation process (SISP) for its business or assets [3]

Core Viewpoint - The Lion Electric Company has initiated restructuring under the Companies' Creditors Arrangement Act (CCAA) due to financial difficulties, with plans to seek recognition of these proceedings in the United States under Chapter 15 of the Bankruptcy Code [1][2]. Group 1: CCAA Proceedings - The Superior Court of Quebec has granted an initial order for the Company and its subsidiaries to receive protection under the CCAA, appointing Deloitte Restructuring Inc. as the Monitor to assist in the restructuring efforts [1][2]. - The Court has approved a sale and investment solicitation process (SISP) to allow interested parties to submit proposals, aiming to determine the best available transaction for the Company and its stakeholders [2]. - The Initial Order includes a stay of proceedings, halting creditor claims and contractual rights, and approves debtor-in-possession financing (DIP Financing) to support operations during the restructuring [2][3]. Group 2: Company Operations - While under CCAA protection, the management of the Company will continue to oversee day-to-day operations with the Monitor's oversight, and the Company will maintain support for its customers regarding the servicing of school buses and trucks [3]. - The Company is recognized as a leading manufacturer of all-electric medium and heavy-duty urban vehicles, focusing on zero-emission vehicles, including electric school buses [6][7]. Group 3: Trading and Market Impact - Trading of the Company's common shares on the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE) has been suspended, with the TSX initiating a delisting review and the NYSE commencing delisting proceedings [5].

Core Viewpoint - The Lion Electric Company has applied for creditor protection under the Companies' Creditors Arrangement Act (CCAA) and intends to seek recognition of these proceedings in the United States under Chapter 15 of the Bankruptcy Code, indicating significant financial distress and a restructuring effort [1][2]. Group 1: CCAA Proceedings - The company is seeking approval for a formal sale and investment solicitation process (SISP) to allow interested parties to submit proposals, aiming to determine the best available transaction for the company and its stakeholders [2]. - The application for the initial order includes a request for a stay of proceedings, which would halt creditor claims and contractual rights, and authorization for interim debtor-in-possession (DIP) financing to support operations during the restructuring [3]. - Deloitte Restructuring Inc. is proposed to be appointed as the monitor to oversee the CCAA proceedings, while the company's management will continue to handle day-to-day operations under the monitor's oversight [3]. Group 2: Financial Context - This announcement follows the expiration of the covenant relief period under the company's senior revolving credit agreement and the maturity of its loan agreement with Finalta Capital and Caisse de dépôt et placement du Quebec, highlighting the company's deteriorating financial situation [4]. - Trading of the company's common shares on the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE) has been halted, with the TSX initiating a delisting review, indicating concerns about the company's compliance with listing requirements [5]. Group 3: Company Overview - Lion Electric is recognized as a leading manufacturer of zero-emission vehicles, including all-electric school buses, and is a North American leader in electric transportation [6][7].

Core Viewpoint - The Lion Electric Company is initiating restructuring proceedings under the Companies' Creditors Arrangement Act (CCAA) due to the expiry of its covenant relief period and the maturity of its loan agreements, leading to a default situation [1][2][3]. Financial Agreements and Defaults - The company had previously amended its Revolving Credit Agreement and Finalta CDPQ Loan Agreement to extend the covenant relief period and maturity date to December 16, 2024, but no viable alternatives for restructuring or business sale have emerged [2]. - The expiry of the covenant relief period has resulted in the re-introduction of financial covenants, placing the company in default under its debt instruments, allowing lenders to demand immediate repayment [2]. Restructuring Efforts - The company is currently in discussions with senior lenders to secure additional funding through a new debtor-in-possession credit facility and plans to seek creditor protection under the CCAA to restructure its business and financial affairs [3]. Trading Status - Trading of the company's common shares on the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE) has been halted pending a review of the company's suitability for listing [4]. Company Overview - Lion Electric is a manufacturer of zero-emission vehicles, including all-electric school buses, and is recognized as a North American leader in electric transportation [5][6].

Financial Data and Key Metrics Changes - The company recorded quarterly revenue of $30.6 million, driven by lower unit sales due to various factors [15] - Gross margins were negative $16 million, compared to negative $19.5 million in the previous quarter [15] - Available liquidity as of September 30 was approximately $27 million [16] Business Line Data and Key Metrics Changes - During Q3, the company delivered 89 vehicles, comprising 71 buses and 18 trucks, with a decline in deliveries primarily due to delays with the ZETF program [10] - The vehicle order book stood at 1,590 vehicles, consisting of 1,455 buses and 135 trucks, representing a combined total order value of approximately $420 million [11] - The company removed 515 bus orders related to the ZETF program due to uncertainty in the application process [11] Market Data and Key Metrics Changes - The company obtained $30 million in Expense Reimbursement payments under the grant ramp [6] - The latest three rounds of the EPA Clean School Bus program are expected to result in over 10,000 new electric school buses being deployed by the end of 2027 [13] Company Strategy and Development Direction - The company is focused on improving liquidity and has implemented cost reduction initiatives expected to result in annual savings of approximately $65 million [4] - Plans to start selling battery packs to third parties in 2025 are underway [5] - The company aims to maintain its leadership position in the electric school bus segment while addressing the challenges in the current operating environment [8] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2024 is a challenging year but emphasized efforts to position the company for future success [8] - Positive movements in the ZETF and EPA programs were noted, indicating potential improvements in cash flow and revenue [5][6] - The company is actively seeking additional financing to strengthen its financial position [5][16] Other Important Information - The company has seen a $15 million reduction in inventory during Q3 and a $35 million reduction year-to-date [7] - The commercial production of a new vehicle line has been pushed to 2025 due to headcount reductions [7] Q&A Session Summary Question: Impact of new U.S. administration on electric vehicle programs - Management stated it is too early to determine the exact impact but noted that the EPA Clean School Bus program is functioning well and funding is being allocated [20] Question: Status of removed bus orders related to the ZETF program - Management clarified that the removal of 515 units was not a cancellation by customers but a proactive adjustment based on the timeline of the ZETF program [22] Question: Comments on pricing strategy - Management indicated that subsidies from the EPA program are adequate and that pricing will be adjusted based on market dynamics and total cost of ownership [24] Question: Delivery expectations for Q4 - Management emphasized ongoing discussions with lenders regarding liquidity and the timing of subsidies, but could not provide specific details on future deliveries [26] Question: Potential for vehicle deployment under EPA programs - Management confirmed that over 10,000 vehicles are expected to be deployed under various EPA programs by 2027 [28] Question: Competition and market share - Management acknowledged the competitive environment but stated that the company aims to increase its market share in the electric school bus segment [29] Question: Production capacity and ramp-up potential - Management confirmed that the company has the manufacturing capacity to ramp up production when needed [30] Question: Options for improving liquidity - Management reiterated that they are exploring various financing options but could not provide specific details at this stage [31]

Financial Performance - The Lion Electric Company reported a quarterly loss of $0.15 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.13, and compared to a loss of $0.10 per share a year ago, indicating a decline in performance [1] - The company posted revenues of $30.63 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 10.77%, and a significant drop from year-ago revenues of $80.35 million [2] - Over the last four quarters, the company has only surpassed consensus EPS estimates once, indicating ongoing challenges in meeting market expectations [2] Stock Performance - Lion Electric shares have declined approximately 66% since the beginning of the year, contrasting sharply with the S&P 500's gain of 21.2% [3] - The current Zacks Rank for Lion Electric is 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.10 on revenues of $47.74 million, and for the current fiscal year, it is -$0.41 on revenues of $167.6 million [7] - The trend of estimate revisions for Lion Electric is mixed, which could change following the recent earnings report [6] Industry Context - The Automotive - Domestic industry, to which Lion Electric belongs, is currently ranked in the bottom 25% of over 250 Zacks industries, which may negatively impact the stock's performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry outlook can significantly affect stock performance [5][8]

Financial Performance - Revenue for Q3 2024 was $30.63 million, a decrease of 62% compared to $80.35 million in Q3 2023[6] - Gross loss for Q3 2024 was $15.95 million, compared to a gross profit of $5.37 million in Q3 2023[6] - Operating loss for the nine months ended September 30, 2024, was $88.04 million, significantly higher than the $51.44 million loss in the same period of 2023[6] - Net loss for the nine months ended September 30, 2024, was $74.91 million, compared to a net loss of $47.22 million in the same period of 2023[6] - For the three months ended September 30, 2024, the net loss was $33,945,985, compared to a net loss of $19,852,573 for the same period in 2023, representing a 71.5% increase in losses year-over-year[10] - For the nine months ended September 30, 2024, the net loss totaled $74,908,660, up from $47,223,604 in 2023, indicating a 58.6% increase in losses[15] - The company reported a basic loss per share of $0.15 for Q3 2024, compared to a loss of $0.09 per share in Q3 2023[6] Assets and Liabilities - Total assets decreased to $780.20 million as of September 30, 2024, down from $841.12 million at the end of 2023[4] - Current liabilities increased to $259.89 million as of September 30, 2024, compared to $145.73 million at the end of 2023[4] - Cash and cash equivalents decreased to $26.29 million as of September 30, 2024, from $29.89 million at the end of 2023[4] - Total shareholders' equity decreased to $280.44 million as of September 30, 2024, down from $358.91 million at the end of 2023[4] - The accumulated deficit increased to $330,654,757 as of September 30, 2024, compared to $255,746,097 at the end of 2023[15] - The company reported a working capital of $32,407,364 as of September 30, 2024, down from $210,961,639 at the end of 2023[15] Cash Flow and Financing - Cash flows used in operating activities for the nine months ended September 30, 2024, were $31,568,669, significantly improved from $86,245,911 in the same period of 2023[15] - The company is currently seeking potential sources of financing to improve liquidity and strengthen its financial position[15] - Management is in discussions with debt holders to negotiate potential amendments or waivers related to its debt instruments[17] Revenue and Deferred Liabilities - Deferred revenue and other deferred liabilities increased to $44.25 million as of September 30, 2024, from $18.27 million at the end of 2023[4] - Total deferred revenue and other deferred liabilities reached $44,253,046 as of September 30, 2024, compared to $18,267,139 at December 31, 2023, marking an increase of 142%[36] - Deferred revenue related to the U.S. EPA Clean School Bus Program increased to $39,033,525 as of September 30, 2024, up from $16,293,067 at December 31, 2023, representing a growth of 140%[36] Debt and Interest Rates - Long-term debt and other debts rose to $292,636,055 as of September 30, 2024, up from $224,942,365 at the end of 2023[28] - The current portion of long-term debt increased significantly to $149,540,872 as of September 30, 2024, compared to $27,056,476 at December 31, 2023[39] - The weighted average all-in interest rate for the credit agreement was 8.6% as of September 30, 2024, compared to 6.96% at December 31, 2023[44] Government Assistance and Loans - The company has secured a non-repayable financial contribution of up to C$26,991,772 under the Project Innovation Program, with $12,475,417 received as of September 30, 2024[37] - The Lion Electric Company secured a loan of up to C$50,000,000 from Investissement Quebec, with a potential forgiveness of up to 30% based on specific operational criteria[46] - The Strategic Innovation Fund loan has a nominal value of $21,807,465 as of September 30, 2024, with a potential forgiveness of up to 30% subject to certain criteria[49] Stock Options and Warrants - As of September 30, 2024, the company had 13,371,146 outstanding stock options with a weighted average exercise price of C$1.54, an increase from 11,301,137 options at C$2.16 as of September 30, 2023[86] - The company issued warrants to Amazon.com NV Investment Holdings LLC, allowing the purchase of up to 35,350,003 common shares at an exercise price of $5.66 per share[72] - The total Business Combination Warrants outstanding as of September 30, 2024, were 27,111,323, with 15,972,364 publicly traded[76] Depreciation and Amortization - The Company recognized a depreciation expense of $8,073,128 for the nine months ended September 30, 2024, compared to $6,577,331 for the same period in 2023[26] - Depreciation and amortization for the nine months ended September 30, 2024, totaled $26,239,530, compared to $17,715,104 for the same period in 2023[103] Restructuring and Costs - The company incurred restructuring costs of $2,163,269 during the nine months ended September 30, 2024, with a liability of $293,482 remaining at the end of the period[91] - Share-based compensation expenses for the three months ended September 30, 2024, totaled $438,191, a decrease from $1,324,325 in the same period of 2023[85]

Core Insights - The Lion Electric Company has announced that its all-electric school buses are now eligible for Dominion Energy's Electric School Bus Infrastructure program in Virginia [1][3] - Dominion Energy is providing fast-charging solutions to public school districts that receive EPA Clean School Bus funding, facilitating the transition to electric school buses [2][3] - The program allows electric school buses to serve as a grid resource through vehicle-to-grid (V2G) technology, enabling energy storage and discharge during high demand periods [2][3] Company Overview - Lion Electric is a leading manufacturer of all-electric medium and heavy-duty urban vehicles, focusing on zero-emission vehicles including school buses and commercial trucks [1][5] - The company has over 15 years of experience in developing and deploying all-electric school buses, positioning itself as a leader in the industry [3][5] - Lion Electric designs and manufactures many components of its vehicles, including chassis, battery packs, and bus bodies, emphasizing its commitment to innovation and sustainability [5][6] Industry Context - Dominion Energy's program complements the EPA's Clean School Bus Program, which is expected to deploy $5 billion in funding over five years to accelerate the adoption of electric school buses across the U.S. [3] - The initiative aims to support public school districts in Virginia in their transition to electrification, enhancing clean pupil transportation [3][7] - The collaboration between Lion Electric and Dominion Energy highlights the growing trend towards electrification in the transportation sector, particularly in public services [2][3]

Core Viewpoint - Lion Electric reported disappointing earnings, with significant revenue misses and a notable decline in stock performance compared to the broader market. Financial Performance - Lion Electric posted revenues of $30.28 million for the quarter ended June 2024, missing the Zacks Consensus Estimate by 50.69% and down from $58.02 million year-over-year [2] - The company reported a quarterly loss of $0.18 per share, worse than the Zacks Consensus Estimate of a loss of $0.12, and compared to a loss of $0.08 per share a year ago [8] - The current consensus EPS estimate for the upcoming quarter is -$0.10 on revenues of $84.73 million, and -$0.39 on revenues of $298.45 million for the current fiscal year [5] Stock Performance - Lion Electric shares have declined approximately 51.7% since the beginning of the year, contrasting with a 14% gain in the S&P 500 [3] - The company has surpassed consensus EPS estimates only twice over the last four quarters [9] Earnings Outlook - The estimate revisions trend for Lion Electric is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [12] - The sustainability of the stock's price movement will depend on management's commentary during the earnings call [10] Industry Context - The Automotive - Domestic industry, to which Lion Electric belongs, is currently ranked in the bottom 27% of over 250 Zacks industries, suggesting potential challenges ahead [13] - Xos, Inc., another company in the same industry, is expected to report revenues of $18.65 million, reflecting a 292.6% increase from the year-ago quarter [7]