December 2024

Dear Lion Electric Shareholders,

We wish to inform you that Lion Electric (NYSE : LEV) (TSX : LEV ) has recently filed for protection under the Companies’ Creditors Arrangement Act (CCAA). Our investigation over the past few weeks has uncovered troubling evidence suggesting that this decision may have been premeditated, aimed at sidelining retail investors who have financially supported the company.

1. We question the timing of the going concern warning in the 2024 Q3 Earnings Call, and if this warning was provided far too late.  We believe such a warning should have been provided earlier and that there was clear opportunities for management to disclose such concerns, where they instead reassured that there was no such concerns. 

2. Lion Electric has invested over $250 million in research and development, much of which involved third-party companies that are not independent. We will be petitioning the courts for a comprehensive review of the expense records.

3. In the same year that Lion Electric faces financial distress due to a $21 million debt maturity, the company allocated $28 million for R&D. This discrepancy raises significant concerns, suggesting that the defunding of the company could have been a deliberate action.

4. The Lion Electric board includes members from Power Corp, Finalta, and individuals with close ties to the Quebec government. Assuming these groups have put in place adequate governance and controls, they should have been aware of what appears to be a systematic defunding strategy, and should have taken actions earlier. 

5. Lion’s Executive team have been receiving questionnable compensation packages, considering the company was underperforming, missing both revenue and profitability target, and that the company essentially lived on public funding for the greater part of its existence. 

6. In an interview given by Marc Bedard on May 8, 2024, to RDI économie, Marc Bedard confidently stated that restructuring under the CCAA was not being considered, and that Lion’s financial capabilities were satisfactory. However, 5 days earlier, a Deloitte report mentioned that the National Bank had mandated them to shed light on Lion’s concerning situation. We believe that Marc Bedard failed to strike a balance between the optimism that a public company executive can share and his duty of transparency towards shareholders.

Investissement Quebec, FTQ, and CDPQ were early investors in Lion Electric via XPND Capital, obtaining shares at less than $1 each. Subsequently, these shares were sold at $17 USD, resulting in profits exceeding $200 million for IQ, FTQ, and CDPQ.

We believe it is crucial for the public to be aware of these developments and the circumstances surrounding them. We are actively compiling a list of investors as we fully intend to challenge any efforts by Lion Electric, its creditors, Marc Bedard, and the Quebec government to undermine retail shareholders. We are committed to ensuring that all relevant facts are thoroughly presented and considered by the courts before any restructuring is approved.

We are a group of independent investors, and we implore the media and governments to shed light on the potential irregularities that may have misled investors. We will be present during court representations on behalf of ourselves and the hundreds, if not thousands, of retail investors.

Join the movement to add your name to ours.