Electric Vehicle start-up company Electric Last Mile Solutions Inc. plans to liquidate after undergoing a Chapter 7 bankruptcy. This decision comes after a year of the EV maker’s public and only four months after its Chairman and Chief Executive Officer resigned.
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In a statement made late Sunday, the Michigan-based start-up said that the board and its interim Chief Executive Officer Shauna McIntyre have decided to liquidate after reviewing the products and plans of Electric Last Mile, which offered no better options to the creditors, shareholders, and other stakeholders in the company.
As per Bloomberg News, the bankruptcy filing will make Electric Last Mile the first Electric Vehicle start-up that was merged with SPAC (particular purpose acquisition companies) to exit this business amidst the recent stock market slump. The company’s shares have fallen 93% in the past year, and last week, it closed at 51 cents. On May 27, Electric Last Mile had warned that the company might run out of cash in June.
Founder Jason Luo and James Taylor planned to import electric delivery vans from China in semi-knocked-down condition and then assemble them in the factory in Mishawaka, Indiana. The factory was formerly a General motor Hummer factory.
Both founders resigned in early February after the company accused them of making improper stock purchases, just before the company’s merger with SPAC in December 2021. Electric Last Mile was listed on Nasdaq on June 2021 and netted about $379 million in the SPAC transaction.
Interim CEO McIntyre said in a statement that she was disappointed by the outcome after the team at Electric Last Mile had demonstrated a great determination to get the electric vans ready and comply with the need to reduce carbon emissions with clean, connected vehicles in ground transportation.
According to McIntyre, there were, unfortunately, any obstacles to overcome in the short amount of time available to them.
Taylor, who once headed the Hummer brand at General Motors, was the CEO of Electric last Mile, while Luo, who earlier was the CEO at Ford China, became the Chairman.
The market value of Electric Last Mile had reached a high of $1.4 billion after it started trading. The company had struggled since the shake-up, and a week later, after the founders Taylor and Luo resigned the auditor of the company BDO LLP also quit. Since then, the company has operated without an auditor and has not yet filed its annual report for the fiscal year 2021 and financial earnings for the first quarter of 2022, defaulting on Nasdaq listing rules compliance.
In March, the company cut its workforce by 24% and disclosed it was being investigated by the US Securities and Exchange Commission.
