By
Mayowa Adebajo
November 8th, 2023
One of the major drawbacks ELMS is currently experiencing is its inability to acquire new financing as well as a new set of auditors.
Electric vehicle maker Electric Last Mile Solutions (NASDAQ: ELMS) has announced its plans to file for Chapter 7 bankruptcy, as it seeks succor from the current challenges plaguing the EV company.
ELMS as a company has passed through so much in so little time and the decision to file the Chapter 7 bankruptcy followed the resignation of founder and previous Chairman Jason Luo and past Chief Executive Officer Jim Taylor over discrepancies in the share purchase activities.
The ELMS board thereafter appointed Shauna McIntyre as interim CEO and President, drawing on her broad experiences in the automotive industry. McIntyre has done quite a lot to revive the company from its current woes, kickstarted by the broad review of the company’s broad products and commercialization plans.
She also piloted the affairs of the company to place a high premium on safety, and inspired the entire company’s workforce to produce cars of high quality. McIntyre and the new leadership team began “assessing the Company’s planned product offerings, production plans, and certification processes, including the feasibility of meeting previously announced targets.”
Despite these broad efforts, ELMS has still been dragged behind in its primary deliverables.
“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,” said Ms. McIntyre. “Unfortunately, there were too many obstacles for us to overcome in the short amount of time available to us. 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 Bankruptcy Shows the Best Is Not Enough
ELMS is trying to get it right and it has made the right move in this direction with its leadership reshuffle, however, the bankruptcy push is evidence that its best is not enough.
One of the major drawbacks ELMS is currently experiencing is its inability to acquire new financing as well as a new set of auditors. For a company that made its public debut in June last year through a merger with a Special Purpose Acquisition Company (SPAC), Forum Merger III Corp, the public market has not been favorable in any way for the company.
In the wake of the current occurrences, ELMS has also laid off as many as 24% of its entire workforce, a downsizing it initiated to focus on its core business.
“For the past several months, the ELMS board and the new ELMS leadership team have worked nonstop to address legacy financial, governance, and operational matters at the Company, and enormous progress was made, including towards vehicle certification” said Brian Krzanich, ELMS Board Chair and former CEO of Intel. “Therefore, it’s extremely frustrating that we must take this route, but it was the only responsible next step for our shareholders, partners, creditors, and employees.”
At the time of writing, ELMS stock is trading at a 5.02% loss to $0.48 per share.