LION ELECTRIC ENTERS INTO DEFINITIVE AGREEMENT WITH A GROUP OF QUEBEC BASED INVESTORS

LION ELECTRIC ENTERS INTO DEFINITIVE AGREEMENT WITH A GROUP OF QUEBEC BASED INVESTORS

MONTREAL, May 15, 2025 /CNW/ - The Lion Electric Company ("Lion" or the "Company"), a leading manufacturer of all-electric medium and heavy-duty urban vehicles, announced today that following the conclusion of the sale and investment solicitation process ("SISP") conducted under the supervision of the Superior Court of Québec (Commercial Division) (the "Court") and Deloitte Restructuring Inc., as Court-appointed monitor of the Company and its subsidiaries, in connection with the restructuring proceedings (the "CCAA Proceedings") of the Company and its subsidiaries instituted on December 18, 2024, under the Companies' Creditors Arrangement Act (Canada), the Company entered into a subscription agreement (the "Definitive Agreement") with 9539-5034 Québec Inc. (the "Purchaser"), a corporation newly incorporated for the sole purpose of completing the transactions contemplated by the Definitive Agreement on behalf of a consortium comprised of Quebec based investors. The execution of the Definitive Agreement is the culmination of the Company's aforementioned SISP in the context of the CCAA Proceedings.

The transactions contemplated by the Definitive Agreement are to be implemented by way of reverse vesting order (the "Reverse Vesting Order") to be issued by the Court. The Reverse Vesting Order shall approve the Definitive Agreement and the transactions contemplated thereby, including the following: (i) all of the issued and outstanding common shares of the Company, including those currently held by the public, as well as any and all options, warrants and other instruments exercisable into, or convertible or exchangeable for, common shares of the Company, will ultimately be cancelled for no consideration, (ii) certain excluded assets and excluded liabilities of the Company and its subsidiaries will be vested-out and transferred to entities newly-incorporated for such purposes, and (iii) the Purchaser will subscribe for a new class of common shares in the capital of the Company, as a result of which, upon closing of the transactions contemplated by the Definitive Agreement, the Purchaser will be the sole shareholder of the Company.

The Company has applied to the Court for the issuance of the Reverse Vesting Order and expects the Reverse Vesting Order to be granted on May 16, 2025, with the closing of the transactions to occur shortly thereafter, subject to fulfillment or waiver, as applicable, of other closing conditions customary for transactions of this nature.

The Company has also applied to the Autorité des marchés financiers in order to obtain a decision partially revoking the failure-to-file cease-trade order ("FFCTO") currently in effect over the securities of the Company solely for the purposes of allowing the Company and the Purchaser to complete the transactions contemplated by the Definitive Agreement.

Following completion of the transactions contemplated by the Definitive Agreement, the Company intends to apply for a full revocation of the FFCTO and to cease to be a reporting issuer order in all of the provinces and territories of Canada.

Related Party Transaction Disclosure

The Purchaser is a "related party" of the Company as a result of Mr. Pierre Wilkie, a director of the Company, forming part of the consortium, and, accordingly, the transactions contemplated by the Definitive Agreement would constitute a "related-party transaction" under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). As a result of the Company being insolvent and the transactions contemplated by the Definitive Agreement not providing any recovery to holders of the Company's equity securities, and subject to the orders to be granted by the Court under the Reverse Vesting Order, the Company intends to rely on the exemptions to the formal valuation and majority of the minority approval requirements provided under Section 5.5(f) and 5.7(d), respectively, of MI 61-101. 

ABOUT LION ELECTRIC

Lion Electric is an innovative manufacturer of zero-emission vehicles, including all electric school buses. Lion is a North American leader in electric transportation and designs, builds and assembles many of its vehicles' components, including chassis, battery packs, truck cabins and bus bodies. 

Always actively seeking new and reliable technologies, Lion vehicles have unique features that are specifically adapted to its users and their everyday needs. Lion believes that transitioning to all-electric vehicles will lead to major improvements in our society, environment and overall quality of life.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This press release contains "forward-looking information" and "forward-looking statements" within the meaning of applicable securities laws (collectively, "forward-looking statements"), including statements regarding the transactions contemplated by the Definitive Agreement and the expected closing of such transactions, the issuance of the Reverse Vesting Order by the Court, the issuance of an order partially revoking the FFCTO over the securities of the Corporation, and the expectations that the Company cease to be a reporting issuer following completion of the transactions. Forward-looking statements may be identified by the use of words such as "believe," "may," "will," "continue," "anticipate," "intend," "expect," "should," "would," "could," "plan," "project," "potential," "seem," "seek," "future," "target" or other similar expressions and any other statements that predict or indicate future events or trends or that are not statements of historical matters, although not all forward-looking statements may contain such identifying words. The forward-looking statements contained in this press release are based on a number of estimates and assumptions that Lion believes are reasonable when made. Such estimates and assumptions are made by Lion in light of the experience of management and their perception of historical trends, current conditions and expected future developments, as well as other factors believed to be appropriate and reasonable in the circumstances. However, there can be no assurance that such estimates and assumptions will prove to be correct. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. For additional information on estimates, assumptions, risks and uncertainties underlying certain of the forward-looking statements made in this press release, please consult section 23.0 entitled "Risk Factors" of the Company's annual management's discussion and analysis of financial condition and results of operations (MD&A) for the fiscal year 2023, as well as other documents filed with the applicable Canadian regulatory securities authorities and the Securities and Exchange Commission, including the Company's interim MD&As. Many of these risks are beyond Lion's management's ability to control or predict. All forward-looking statements attributable to Lion or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained and risk factors identified in the Company's annual MD&A for the fiscal year 2023 and in other documents filed with the applicable Canadian regulatory securities authorities and the Securities and Exchange Commission. Because of these risks, uncertainties and assumptions, readers should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under applicable securities laws, Lion undertakes no obligation, and expressly disclaims any duty, to update, revise or review any forward-looking information, whether as a result of new information, future events or otherwise.

SOURCE The Lion Electric Co.