Shares of electrical car startup Lordstown Motors disclosed on Monday {that a} funding cope with Foxconn is in jeopardy – and that it might go bankrupt if the deal would not occur. Shares sank 25% in early buying and selling.

Lordstown stated in a Monday regulatory submitting that it acquired a letter from Foxconn on April 21 alleging that the startup was in breach of an funding deal as a result of its inventory had fallen beneath $1 per share for 30 consecutive buying and selling days, triggering a delisting discover from NASDAQ.

The embattled startup struck a deal to promote its Ohio manufacturing facility to the Taiwanese contract-manufacturing big final 12 months. Following that deal, which closed in Might 2022, the 2 firms agreed to a second deal wherein Foxconn would make investments as much as $170 million in Lordstown, amounting to a 19.3% stake.

Foxconn paid the primary $52.7 million due beneath that deal final 12 months, however the the rest – and the deal itself – is now in jeopardy.

Underneath the phrases of the deal, Foxconn is meant to speculate $47.3 million inside 10 days of regulatory approval by the Committee on International Funding in america. That approval was secured on April 25, Lordstown stated, that means that Foxconn is obliged to make that funding by Might 8.

Lordstown stated it is involved that additional funding will not are available earlier than that deadline, and that Foxconn would not appear to be making religion effort to finish an EV plan that is without doubt one of the deal’s milestones.

The 2 firms had agreed to finalize a plan to collectively develop a brand new EV by Might 7, after which Foxconn is obliged to speculate a further $70 million. Based on Lordstown, that plan hasn’t been finalized as a result of Foxconn is not making “commercially cheap efforts” to complete it.

In a press release to CNBC, Lordstown stated that Foxconn’s actions are “fully unwarranted” and have resulted in “materials — and what’s turning into irreparable — hurt to the corporate.”

Lordstown warned within the submitting that it might be pressured to file for chapter safety if the Foxconn deal falls by. The corporate nonetheless had $221.7 million available as of the tip of 2022, however it misplaced over $100 million within the fourth quarter.

Foxconn did not instantly reply to a request for remark.