Troubled Michigan-Based EV Startup To File For Bankruptcy

Michigan-based electric vehicle startup Electric Last Mile Solutions Inc ELMS said on Sunday it plans to file for Chapter 7 bankruptcy.

What Happened: The late Sunday disclosure follows a series of developments at the startup, including the resignation of its CEO Jim Taylor and Chairman and founder Jason Luo, linked to share purchases and subsequent regulatory investigation.

“Based on the findings of the same Board-initiated investigation that led to the resignations of Mr Taylor and Mr Luo, ELMS was forced to withdraw financial guidance and declare the Company's past financial statements unreliable,” the startup said.

“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. “ 

ELMS in March withdrew its previous guidance and said it would need to raise cash to bring its vehicles to market after learning of the investigation by the SEC on March 7.

The startup, which went public in June last year, had previously said it has sufficient cash to run operations between July and September 2022. 

See Also: Elon Musk Tells Tesla Staff To Rally Hard, Salvage 'Tough Quarter'

Why It Matters: ELMS is among a host of electric vehicle startups that have taken the SPAC route to go public in the recent past and then have been rocked by troubles with either product development, production issues, regulatory investigations, or scandals, or executive churn.  

Some of the high-profile names include Nikola Corp NKLA, Lordstown Motors Corp RIDE, and Lucid Group Inc LCID are a few companies that have revealed regulatory inquiries. 

Price Action: ELMS closed 1.3% lower at $0.51 on Friday, according to data from Benzinga Pro.

Photo courtesy: Electric Last Mile

Posted In: Electric VehicleEVJason LuoJim TaylorNewsPenny StocksSmall CapEvents

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.