Electric vehicle company with big plans for Indiana to file for bankruptcy – Indianapolis Business Journal

Electric vehicle startup Electric Last Mile Solutions Inc., a publicly traded company that aimed to manufacture battery-powered delivery vans in Mishawaka, northern Indiana, is filing for Chapter 7 bankruptcy.

The filing will make Electric Last Mile Solutions, or ELMS, the first of electric vehicle startups that merged with special purpose acquisition companies to go bankrupt amid the recent market slump, Bloomberg News reported.

The liquidation decision, announced on Sunday, comes less than a year after the EV company went public through a merger with SPAC Forum Merger III Corp. for a valuation of approximately $1.4 billion. The move also comes four months after former CEO Jim Taylor and former executive chairman Jason Lua resigned amid accusations of improper pre-IPO stock purchases, following an investigation. internal.

“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 its financial guidance and report the company’s prior financial statements. unreliable company,” the company said in a press release. . “The compound effect of these events, along with an ongoing SEC investigation launched this year, has made it extremely difficult to find a new auditor and obtain additional funds.”

In February, the board hired a new management team to review its product and marketing plans, as well as its ability to meet previously announced production targets.

“Over the past few months, the ELMS Board of Directors and the new ELMS management team have worked tirelessly to resolve the financial, governance and operational issues inherited from the business, and tremendous progress has been made. made, particularly towards vehicle certification,” said Brian Krzanich, Chairman of the Board of ELMS. . “Therefore, it is extremely frustrating that we had to go this route, but it was the only responsible next step for our shareholders, partners, creditors and employees.”

In December 2020, ELMS announced plans to restart a 650,000 square foot automotive plant in Mishawaka to manufacture “last mile” battery-powered urban delivery vans. Until 2009, the plant produced mainstream sport utility vehicle Hummers.

The Troy, Michigan-based company announced at the time that it would initially launch with 140 workers, increasing its workforce to 450 workers when it reaches full production. The company predicted that it would employ nearly 1,000 people within four years as it expanded into other models.

The plant is adjacent to the AM General plant which still produces military Humvees.

“Obviously the last few months have been tough after their ‘hiccup’. This action has sent stock prices plummeting and created several class action lawsuits,” said Jeff Rea, president and CEO of the South Regional Chamber of Commerce. Bend. “We were concerned that they would run into the ropes.”

Despite the uncertainty at the start of the year, ELMS said it continued to work on raising new sources of capital, while working closely with advisers to assess and improve its liquidity position. However, these efforts failed to get the company back on track and eventually led the board to file for bankruptcy.

“Unfortunately, there were too many hurdles to overcome in the short time we had. I couldn’t be more proud of what our team has been able to accomplish under very difficult circumstances,” said Shauna McIntyre, who was named interim CEO and President in February. “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.”

Since General Motors halted production of civilian Hummers 13 years ago, the huge building has seen three more contenders for possible car production, but none have reached a deal.

In 2017, AM General sold the plant to SF Motors, a subsidiary of China’s Sokon Industry Group, to build electric vehicles. But no vehicle ever left the assembly area. SF Motors still owns the building.

“It hasn’t been without its challenges,” Rea said. “And, we think, nothing to do with the building, the workforce, the community, Indiana business, the climate, all of those factors drew people here. But it’s really stuff out of our control.

Meanwhile, St. Joseph County economic development officials are still hopeful the property will attract a user.

“The building, which is nearly 21 years old, has seen millions of dollars of investment over the past 5 years and should be well positioned for new automotive-related use,” said Bill Schalliol, Director of Development economy of St. Joseph. County. “While disappointed this project did not work out, we see a bright future for the site.”

When plans for the new company were announced in late 2020, the Indiana Economic Development Corp. offered ELMS up to $10 million in conditional tax credits and up to $200,000 in conditional training grants based on the company’s job creation plans. It also offered up to $2.8 million in conditional tax credits under the Hoosier Business Investment Tax Credit Program based on the company’s planned capital investment in Indiana.

A spokesman for the IEDC said the ELMS did not “draw” any inducement.

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