Electric Last Mile Solutions (ELMS), which was founded by the former head of the Hummer brand and the onetime CEO of Ford China, will liquidate its assets through a Chapter 7 bankruptcy process.
The decision comes just a year after the company was first listed publicly and follows the resignation of its founders, James Taylor and Jason Luo, as well as an SEC investigation into its accounting processes. The company announced it would file for bankruptcy in a statement published late on Sunday.
In the release, interim CEO Shauna McIntyre said that the company decided to liquidate after no better option could be found for its stockholders, creditors, and other interested parties. Its share prices fell by 55 percent in premarket trading on Monday, to 23 cents a share, reports Bloomberg.
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Electric Last Mile Solutions had planned to import electric delivery vehicles from China and assemble them in a former GM plant in Mishawaka, Indiana. In June 2021, the company went public with Forum Merger III Corp., which netted the company about $379 million.
By February, its founders had resigned after being accused by ELMS of making improper stock purchases just before it announced an SPAC merger in December 2020. A week later, its auditor, BDO LLP, also quit. It has, therefore, not yet filed an annual report for 2021, nor any quarterly reports for this year, making it non-compliant with Nasdaq listing rules.
That failure to report ultimately led to an SEC investigation that the company announced in March 2022. At the same time, it cut 24 percent of its workforce, all of which led its shares to fall 93 percent between January 1, 2022, and the end of trading last week.
“I’m very disappointed by this outcome because our ELMS team demonstrated incredible determination to get our electric vans ready to meet the critical need for clean, connected vehicles that reduce carbon emissions from ground transportation,” McIntyre said. “Unfortunately, there were too many obstacles for us to overcome in the short amount of time available to us.”