Electric Last Mile Solutions (ELMS), a commercial electric vehicle (EV) company, has announced that it plans to file for Chapter 7 bankruptcy, less than a year after it went public through a merger with a special purpose acquisition company (SPAC).
The review involved assessing production plans, certification processes, planned product offerings, and the feasibility of meeting previously announced targets.
Based on the findings, ELMS was “forced to withdraw” financial guidance and declare past financial statements unreliable. “The compound effect of these events, along with a pending SEC investigation initiated this year, made it extremely challenging to secure a new auditor and attract additional funding,” the release said.
The company tried to raise new sources of capital, while attempting to improve its liquidity position. However, the board eventually decided that filing for Chapter 7 bankruptcy was in the best interest of the company, as well as its stakeholders, creditors, stockholders, and other parties.
McIntyre expressed disappointment at the outcome. “Unfortunately, there were too many obstacles for us to overcome in the short amount of time available to us,” she said.
“I could not be prouder of what our team has been able to accomplish under very challenging circumstances. This is a viable and essential technology, and I am confident that many of our talented employees will play a future role in this energy transition effort.”
ELMS, which was at $0.51 per share on June 10, is currently trading at $0.18 per share as of June 13. The value of shares has dropped 97.34 percent year-to-date. On Jan. 3, ELMS was trading at $6.93 per share.
The resignation of Taylor and Luo was linked to alleged improper stock purchases before the company announced the SPAC merger in December 2020. ELMS listed on the NASDAQ in June 2021. The SPAC transaction had netted the company around $379 million.
The company announced in March that it would lay off around 24 percent of its staff to focus on its core business and become leaner. This was in accordance with a plan approved Feb. 21 to terminate 50 employees. On May 27, ELMS warned that it might run out of cash in June.
Also in March, a regulatory filing by the company revealed that it was under investigation by the U.S. Securities and Exchange Commission. The agency was looking into prior filings by ELMS, including compliance with NASDAQ’s listing rules and disagreements with an accounting firm.
