Battery-electric delivery van startup Electric Last Mile Solutions (ELMS) has filed for bankruptcy, ending a long slide that included insider trading, an SEC investigation and a bear market hitting the news public transport companies.
“Unfortunately, there were too many hurdles to overcome in the short time we had,” Shauna McIntyre, CEO and interim president, said in a statement. Press release.
In a 8-K Rating On Sunday with the Securities and Exchange Commission, ELMS said its board of directors and outside advisers determined that a Chapter 7 liquidation filing was the best course of action after the company was unable to attract new investment.
ELMS shares fall
ELMS stock fell 61.59% on Monday to close at 20 cents per share on the Nasdaq. The stock exchange told the company on Friday it has 180 days to push its stock price above $1 a share or face delisting. Shares fell a further 2.76% after hours to 19 cents.
ELMS went public a year ago this month following a December 2020 merger with Forum Merger III Corp., the deal was valued at $1.4 billion. ELMS received gross proceeds of $379 million upon closing of the business combination on June 28.
Monday was an awful day overall for electric and self-driving transportation companies that went public through special-purpose acquisition companies created to merge with start-ups and take them public.
Embark technology (NASDAQ: EMBK), the maker of autonomous trucking software, fell 15.79% to 64 cents per share.
Nikola Corp., (NASDAQ: NKLA) an early merger SPAC, which went through a series of problems and agreed to pay the SEC $125 million in fines over allegations of fraud against its founder, lost 13.41% to close at 5, $23, less than 50 cents higher than its 52-week low.
Roundup of misfortunes
ELMS was already in shock. Last week, he said former CEO James Taylor, a veteran auto executive who co-founded the company, failed to repay shares in the company that an internal investigation found had been bought by the through insider trading.
The ELMS business plan included building last-mile Class 1 electric delivery vans with bodies imported from China that would be married to electric chassis at a former General Motors plant in Mishawaka, Indiana.
The owner of the Mishawaka plant has agreed to reduce mortgage payments on the plant for four months while the company tries to raise new funds.
Board members tender their resignations
“Over the past few months, the ELMS Board of Directors and the new ELMS management team have worked tirelessly to resolve the financial, governance and operational issues inherited from the business, and tremendous progress has been made. made, especially toward vehicle certification,” said Brian Krzanich, ELMS non-chairman and former CEO of Intel.
“Therefore, it is extremely frustrating that we had to go this route, but it was the only responsible next step for our shareholders, partners, creditors and employees.”
The company is completing preparations for the Chapter 7 case, which will be handled by a trustee. McIntyre, Krzanich and Richard N. Peretz, who retired in 2020 as senior vice president, chief financial officer and treasurer of United Parcel Service, tendered their resignations as board members effective takeover of the affairs of ELMS by the trustee in bankruptcy.
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