Electric Last Mile Solutions Inc (ELMSQ)

[value1008]

And yet many of us invested in ELMS because of James Taylor, who had attained such high positions at GM with their Cadillac and Hummer lines.

And Jason Luo had major credibility in automotive safety...

Go figure....

[barnyarddog]

Electric Last Mile Solutions, Inc. Announces Chapter 7 Bankruptcy Filing
9:05 PM ET 6/12/22 | Dow Jones

TROY, Mich., June 12, 2022 /PRNewswire/ -- Electric Last Mile Solutions, Inc. (NASDAQ: ELMS) ("ELMS" or "the Company"), a pure-play commercial electric vehicle ("EV") company that has been focused on redefining productivity for the last mile, today announced the Company plans to file for Chapter 7 bankruptcy.

In February 2022, following the resignations of Jim Taylor, the Company's former Chief Executive Officer, and Jason Luo, the Company's founder and former Executive Chairman, the Company appointed Board member Shauna McIntyre as interim CEO and President, in part because of her considerable automotive experience.

The ELMS Board and the new leadership team under Ms. McIntyre launched a comprehensive review of the company's products and commercialization plans, instilled a culture of safety and focused the workforce on producing quality vehicles. This process included assessing the Company's planned product offerings, production plans, and certification processes, including the feasibility of meeting previously announced targets.

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 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.

Yet the Company continued to work aggressively on raising new sources of capital, while working closely with advisors to assess and improve its liquidity position. Ultimately, the Board determined, following a comprehensive review with the assistance of the Company's outside advisors, and upon the recommendation of the Company's management, that it is in the best interest of the Company and the Company's stockholders, stakeholders, creditors, and other interested parties to file for Chapter 7 relief.

"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."

"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."

About Electric Last Mile Solutions, Inc.

Electric Last Mile Solutions, Inc. (Nasdaq: ELMS) has been focused on defining a new era in which commercial vehicles run clean as connected and customized solutions that make businesses more efficient and profitable. ELMS' first vehicle, the Urban Delivery, was anticipated to be the first Class 1 commercial electric vehicle in the U.S. market. For more information, please visit www.electriclastmile.com.

[lalaland]

When a company is run by a bunch of A-Holes this is what you get = BANKRUPT. Nice going you dumb ass's

[value1008]

Well, looks like "game over" for ELMS, as it declares Chapter 7 bankruptcy. (I can actually use the losses on my 2K remnant shares as tax deductions after some big cap gains accrued since Fall 2016 on some market tracking funds --VTI and VOO-- that i sold 50% of a few months ago to buy a house).

https://ih.advfn.com/stock-market/NASDAQ/electric-last-mile-solut-ELMS/stock-news/88343358/electric-last-mile-solutions-inc-announces-chapt?xref=newsalert

Condolences to anyone still holding lots of shares and hoping for some kind of rebound down the road.

This went from being one of the most promising EV plays to the worst possible outcome... Even beyond investors losing skin on this one, it's a darn shame these EV vans and trucks won't be available to fleet owners.....

Who else is going to step up and fill the need for class 1 EV vans and class 2-3 trucks?

[lalaland]

What is this company doing everyday? They all must be in a coma!

[worthylion]

Big day for ELMS yesterday leading the charge in the EV sector rally. Still own a lot of shares so hoping management either announces a buyout or it becomes a meme trader and I can sell into a spike.

[lalaland]

What is the value of a MEME stock if the company is on its ass ???

[ErnieBilco]

Up 159% on warrants since buy in on Monday.

[worthylion]

Maybe the next meme stock?!??

[ErnieBilco]

I like being late - it's so much cheaper that way.

Most of the SPACs are stumbling over the early success they had.

I'm a bargain basement shopper when it comes to stocks and warrants

[value1008]

Good luck to you, Ernie, i hope you and others who've come "late to the party" enjoy big gains. For those of us who found out about FIII / ELMS after the initial SPAC days, it's been an unmitigated disaster.

Down the road, with certification and solving the supply issues from China and shipping container costs, this could turn out to be a successful business. But first mover advantage now looks to be lost, and major share dilution is coming (according to explicit mention in the recent 8-K filing).

I've only 2k shares left, but might consider rebuying after the dilution event if it looks like the vehicles (van and truck) will in fact get NHTSA certified and shipping container costs return to earth.

Analysts and us shareholders have been completely burned on this name, so it's going to take a lot to restore confidence.

It remains to be seen whether Shauna McIntyre will become the official CEO or if some other name, perhaps an impressive name, comes in. And what kind of institutional and hedgefund money comes back into supporting the stock.

[ErnieBilco]

I'm a buyer here today - with the resignations of the crooked stock dealing guys - this will eventually recover and possibly even thrive if they put a vehicle on the road.

Bought both commons and warrants

[value1008]

Barron's is piling on with the bad news. None of these media outlets pumped ELMS up to let it enjoy higher shareprices in 2021 but they're quick to jump on the negative revelations:

https://www.marketwatch.com/articles/ev-stock-electric-last-mile-51647279190
EV Start-Up Electric Last Mile Stock Is Down 47%. Here’s Why.
Mon. March 14, 2022 at 1:34 p.m. ET
By Al Root

Referenced Symbols: ELMS -51.77%

Shares of commercial electric-vehicle start-up Electric Last Mile Solutions are plummeting in Monday trading. The company disclosed a new Securities and Exchange Commission probe and a few other things that have unnerved investors.

Electric Last Mile (ticker: ELMS) stock is off about 47% in midday trading Monday.

Late Friday, Electric Last Mile said the SEC’s Division of Enforcement is conducting an investigation related to company reporting of vehicle orders among other issues. Electric Last Mile says it intends to cooperate fully with the investigation. The company didn’t immediately respond to a request for comment about the investigation. The company also disclosed information about shareholder lawsuits in the same release.

This isn’t the first big drop investors have had to endure recently. Shares fell almost 52% on Feb. 2, following the disclosure that Jason Luo resigned from his positions as executive chairman and chairman of the board, and that James Taylor resigned as CEO.

Recent trading leaves Electric Last Mile stock down about 86% year to date and down about 92% from a June 2021 52-week high of $12 a share [the day I almost sold all shares!!!].

Seven analysts cover Electric Last Mile stock, all with Hold ratings. Coming into 2021, all seven had rated shares at Buy. The average analyst price target has gone to about $2.75 from more than $15.

Troy Michigan-based Electric Last Mile is focused on producing commercial EVs, such as delivery vans, that can help cut greenhouse-gas emissions.


Write to Al Root at [e-mail]

[value1008]

There's speculation over at Stocktwits by a few folks about the possibility of ELMS being bought out by a bigger company that would be able to buy at firesale prices a co. fairly close to production with two viable EV vehicles. That may happen but i'm not betting on it, i.e., i'm not buying shares down here....

Now, what would inspire confidence in the stock and lead me to pick up some shares would be if an investor(s) came in with the big funds to guarantee ELMS could survive and maybe flourish over the coming years.

But such funds will mean serious dilution, so the old EPS figures projected by the analysts for 2023-2025 would need to be probably cut in half.

[value1008]

Here are the saddening contents of the 8K:

FORM 8-K

CURRENT REPORT

ELECTRIC LAST MILE SOLUTIONS, INC.


Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.

As previously disclosed in a Current Report on Form 8-K filed by the Company on February 1, 2022, in connection with James Taylor’s resignation from his positions as President and Chief Executive Officer and as a member of the Board, Mr. Taylor and the Company agreed to settlement terms, including that Mr. Taylor would provide consulting services to the Company for a period of two years. On March 1, 2022, Mr. Taylor and the Company entered into a consulting agreement (the “Consulting Agreement”), a copy of which was attached as an exhibit to the Current Report on Form 8-K filed by the Company on March 4, 2022.

The Company has since notified Mr. Taylor of its decision to terminate the Consulting Agreement, and Mr. Taylor’s services thereunder, in accordance with Section 1 of the Consulting Agreement, effective as of May 10, 2022.


Item 7.01. Regulation FD Disclosure.

Vehicle Status



On February 14, 2022, Electric Last Mile Solutions, Inc. (the “Company”) announced in a Current Report on Form 8-K that it was conducting a comprehensive review of the status of its products and commercialization plan under the guidance of the Company’s new leadership. With the assistance of outside consultants, management is continuing to assess the Company’s planned product offerings, production plans, and certification processes, including the feasibility of meeting previously announced targets.



The Company currently expects to commence production of certified Urban Delivery vehicles no earlier than the end of 2022 and into first quarter of 2023, followed by the Urban Utility vehicle no earlier than the first half of 2023. The Company had previously disclosed in September 2021 that it had successfully launched the ELMS Urban Delivery vehicle, and in November 2021, the Company announced that it expected to have certified Urban Delivery vehicles available for sale by year-end and that production of its Urban Utility vehicle was expected to commence in the second half of 2022. The operational processes planned by the Company’s new leadership around certification and safety testing, vehicle durability testing and other pre-preproduction steps are causing delays in the commercialization timeframe for Urban Delivery, Urban Utility and other vehicles. Management is committed to working closely with its commercial partners to produce quality vehicles that meet appropriate safety standards and will only sell vehicles if and when such standards are met.


Liquidity

The Company continues to work with outside advisors to determine its current liquidity position and ongoing funding needs. The Company previously announced on February 1, 2022 that it expected to report that it had $132.0 to $142.0 million in cash and cash equivalents, which includes $25.0 to $30.0 million of restricted cash, as of December 31, 2021. The Company has since confirmed that it had approximately $137 million in cash and cash equivalents, which included approximately $27 million of restricted cash, as of December 31, 2021. As of March 10, 2022, the Company currently estimates it has approximately $95 million in cash and cash equivalents, including approximately $24 million in restricted cash. The Company currently believes it has sufficient cash to continue operations through sometime between July and September 2022. We are continuing to evaluate our rate of cash expenditures, which will be affected by expenses related to professional fees associated with ongoing compliance, regulatory and litigation matters; financial statement preparation and audit costs; and the pace and cost of our ongoing vehicle development work. Additionally, as disclosed in Item 5.02 of this Current Report on Form 8-K, the Company has provided notice to Mr. Taylor of the termination of the Consulting Agreement and his services thereunder. The Company is actively pursuing potential sources of liquidity and is working to extend its cash runway during this process to the extent possible, if at all. The Company will not be able to launch the Urban Delivery, Urban Utility or any other vehicle without obtaining such additional liquidity.



Withdrawal of Prior Guidance and Estimates



In connection with management’s review, and in light of the disclosures in this Item 7.01, the Company has decided to withdraw all previously issued business outlook and related forward-looking statements, as well as other commercialization targets issued by the Company, until such time as it has improved forecasting confidence. The statements in this Current Report on Form 8-K hereby supersede any previously issued disclosure and guidance from the Company with respect to such matters. The Company intends to keep the public informed of its progress.


These statements and estimates with respect to our product launch and otherwise in this Item 7.01 are unaudited and preliminary and do not present all information necessary for an understanding of the Company’s financial condition and results of operations. The completion of the Company’s year-end accounting procedures, including execution of the Company’s internal control over financial reporting, and audit of the Company’s financial statements for the year ended December 31, 2021 is ongoing and could result in changes to the information set forth above.


The information in Item 7.01 of this Current Report on Form 8-K is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section and shall not be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.


Item 8.01. Other Events.


On February 3, 2022, a stockholder of the Company, Scott Hacker, filed a putative class action against the Company and certain of its current and former officers alleging violations of Section 10(b) and Rule 10b-5 thereunder, and 20(a) of the Securities Exchange Act of 1934. Hacker v. Electric Last Mile Solutions, Inc., 22-CV-00545 (D.N.J., filed Feb. 3, 2022). The plaintiff alleges that the defendants failed to disclose that certain Company officers purchased equity in the Company at substantial discounts to market without obtaining an independent valuation, and that as a result the Company’s financial statements were not accurate. The case is in its early stages and a lead plaintiff has not yet been appointed.



On February 4, 2022 , the Company received a letter from The Nasdaq Stock Market (“Nasdaq”), requesting additional information related to the disclosures in the Company’s Current Report on Form 8-K filed on February 1, 2022. The Company responded to Nasdaq’s request as directed.



On February 24, 2022, the Company received a request from a putative stockholder of the Company to inspect certain of the Company’s books and records, including with respect to the matters alleged in the securities class action. The Company is in the process of responding to this request.


On March 7, 2022, the Company learned that the Division of Enforcement of the Securities and Exchange Commission (the “SEC”) is conducting an investigation involving the matters discussed in Current Reports on Form 8-K filed by the Company on September 27, 2021, February 1, 2022 and February 14, 2022 and Exhibits 99.1 and 99.2 to Forum Merger III Corporation’s Current Report on Form 8-K filed on March 16, 2021. The Company intends to cooperate fully with the SEC investigation. At this point, the Company cannot predict the eventual scope, duration or outcome of this matter.


Forward-Looking Statements

[value1008]

I wasn't aware until i checked Stocktwits this a.m. that ELMS filed an 8-K Friday afternoon-- FULL OF BAD NEWS. (Have no idea why it didn't show up in the news feed here at IHUB ELMS board.)
Apparently the cash burn was paying off more of the Mishawaka factory previously owned by SERES.
James Taylor's consultancy has been terminated.
Production of the road-worthy Urban Delivery van has been delayed many months, and same with the Urban Utility truck....
(SEE MY NEXT POST of the 8-K contents....)

Here's a news report, which doesn't contain any news about the big delay in production. https://finance.yahoo.com/news/electric-last-mile-discloses-sec-225415878.html

--------------
From the 8-K:

3/11/22, 03:52 PM
$ELMS
As of March 10, 2022, [the Company has] approximately $95 million in cash The Company currently believes it has sufficient cash to continue operations through sometime between July and September 2022. We are continuing to evaluate our rate of cash expenditures, which will be affected by expenses related to professional fees associated with ongoing compliance, regulatory and litigation matters; financial statement preparation and audit costs; and the pace and cost of our ongoing vehicle development work. Additionally, as disclosed in Item 5.02 of this Current Report on Form 8-K, the Company has provided notice to Mr. Taylor of the termination of the Consulting Agreement and his services thereunder. The Company is actively pursuing potential sources of liquidity and is working to extend its cash runway during this process to the extent possible, if at all. The Company will not be able to launch the Urban Delivery, Urban Utility or any other vehicle without obtaining such additional liquidity.

[lalaland]

Enough with the bad news already. Good news only from now on please.

[value1008]

I've been focused on other stuff... The daily/hourly trading behavior on ELMS will be very much subject, imo, to the risk off / risk on sector & market sentiment.

I was glad to see the PR the other day providing a bit of clarity on how ELMS is laying off staff to focus on their core business plan.

I presume those are the jobs created for the business entities ELMS established in China and S.F., and maybe extra divisions at Troy, not at the Mishawaka, IN, factory, where the core assembly / production business is to occur and ramp up this year.

So much is up in the air about whether ELMS will be able to get logistic costs down, and sufficient parts delivered to ramp up.
The debacle with co-founders' resignation could not have come at a worse time, imo.

~~~~~~~~~~~~~~~~~~~~~
March 07 2022 - 01:15AM

Electric Last Mile Solutions (ELMS) plans to lay off 24% of its staff as it seeks to streamline its business. Reuters reports that the layoffs will allow the commercial electric vehicle (EV) maker to become leaner as it focuses on its core business. [...] The company has yet to ascertain the total cost savings it will achieve with the layoffs.

[worthylion]

ELMS up big after hours. Is there a reason or just a stray trade?

[worthylion]

Looks like a total of 7.8 million shares surrendered from Luo and Taylor. If they have to do a secondary at this price, they would very likely issue multiples of that.

[worthylion]

Looks like their auditor, BDO, resigned related to an undisclosed conflict with another Luo entity.

[value1008]

Today's after-hours filing 1) announces a cutback of 25% of their extended workforce so that ELMS can concentrate on the essential business plan; and 2) it confirms all the massive legal details about Jason Luo and James Taylor's resignations, formalizes their 2 year consultancy contract, clarifies the status of what stock-shares they still have or don't have, etc.

I simply don't have time to read all of it, but perusing it lightly makes me think there's nothing really different here than what was originally revealed in early Feb. (I could be wrong.)

The stock is down along with the entire sector, which continues to sell off hard. I'm seeing many names (PTRA, QS, RIVN, et al.) struggling as they fall down, down, down.....

[MrGreenieSr]

What Value says holds weight - he has been here a long time and dug up a lot of DD on these guys. We need it in a PR or it's all heresy.

BUT, that said, I believe that the new sales timeline is mid-March for road ready vans to start selling. Randy Marion has stated this recently and all we can do is believe them.

Originally, around mid January, ELMS stated that cars would go to dealer in late Jan (this is the lie). RM confirmed this and said that shipments were 'fully spoken for/sold out the first four or so weeks and likely nothing would be available until production ramps up in mid-March.'

I've long had an overweight position but with this info I started loading even heavier in January. And we know how that turned out.

I just hope we get some clarity and a formal press release (or several) in the next two weeks while the rest of the EV startups are reporting earnings.

[value1008]

I'll let MrGreenie speak for himself, but Stoxjock you have to read some of the earlier posts here from the past week about how investors need clarity on homologation (full NHTSA certification), shipping container costs, and production ramp-up schedule, based in turn on the supply logistics-- namely, is ELMS getting sufficient number of basic vans from China to ramp up production here?

We're all hoping for the best, but shareholders need clarity ASAP....

[stoxjock]

"And I have old emails from ELMS' sales team that are outright lies at this point."

In view of recent developments, since you seem to be an early investor in this company, What is the new sales projection and when are their vehicles start getting into hands of 'Real' customers? Looking to start nibbling at this price or lower...TIA & GLTU!

[value1008]

MrGreenieSr, i can't help but think that IR and mgmt have had to "go silent" for awhile because of all those sharks in the water-- the ambulance-chasing law firms trying to start up a class-action lawsuit.

Obviously most of these never amount to anything, though some do (e.g., i was a beneficiary of the lawsuit against China Media Express CCME after massive losses in 2011).

Anyway, ELMS is surely realizing they have to be very careful about anything that they or IR say until they're able to bring public clarity to operations and forward looking statements.

Just my thoughts, fwiw....

[MrGreenieSr]

It's incredibly frustrating. I have a thoughtful email in with IR that's been unanswered for over 10 business days days now, even with a follow up. I have calls in with Randy Marion who also seems to be in the dark and guessing as to timeline. And I have old emails from ELMS' sales team that are outright lies at this point.

Shareholders need a REAL update before the end of the month, or we all may abandon ship and leave them with the sharks. Despicable action (or INaction) from the company.

[value1008]

That's why it's so maddening now for shareholders or prospective shareholders-- we're all in the dark about whether ELMS can solve the problems i've discussed -- supply & cost of parts and NHTSA homologation-- the MAJOR FACTORS in whether ELMS will be able to ramp up this year and maximize that claimed "first mover" advantage.

The formerly mega-bullish analysts sure haven't helped with their downgrades to "hold" and utterly cratered PTs.... e.g., $2.50 from Volkmann at Jefferies-- REALLY????? How does one go from being the most bullish ($18 PT) to the most bearish (in terms of P.T.) of the six analysts? Not to mention that Fuzzy Panda short report....

[worthylion]

I'm guessing the new CEO is getting briefed on operating issues and challenges including NHTSA approval, supply chain, shipping rates, customer orders, expected margins, sufficiency of cash to positive cash flow etc. and will issue a PR to get update out including any bad news so she isn't tarred with what she inherited. Perhaps there are more skeletons Taylor kept from the Board. No way to know without an update.

[value1008]

Right. That's why i wasn't re-buying shares yesterday sub-$2 in an IRA (i believe there's no wash sale involved there).

This rebound to $2.40s may just be one of those so-called "dead-cat" bounces (i hate that term), fueled in large part by short-covering.
Over at Stocktwits and FinanceYahoo there seem to be some bullish new posters/traders/investors pushing this for a shortsqueeze.

[worthylion]

Every shareholder and the company's board and management know a positive PR is critical to restoring confidence in the company's ability to execute its business plan. And yet there's no PR which makes me worry there's more bad news to come. Maybe arranging dilutive financing to bolster their cash position? Who knows. The longer there's silence the more I worry they're no longer bullish about their operating outlook.

[value1008]

An update article from Detroit Free Press-- here's the final section:

"[ELMS spokesperson Austin] Stowe said the company is continuing to run "business as usual." Its small Urban Delivery electric van started production in September at the former Hummer plant in Mishawaka, Indiana.
Stowe said ELMS has completed testing of the van and is finalizing calibration and quality checks before those hit public roads shortly."


https://www.freep.com/story/money/cars/2022/02/09/former-gm-executive-resigns-ev-startup-amid-investigation/6706728001/

Former GM executive resigns from EV startup amid investigation
Jamie L. LaReau
Detroit Free Press

A former General Motors executive is out and a onetime Ford Motor Co. leader is in — after a management shakeup at a Troy-based electric vehicle startup.


The ELMS cargo van is the first Class 1 commercial EV in the United States and is being built at the old Hummer H2 plant in Mishawaka, Indiana.

Electric Last Mile Solution (ELMS), which makes battery-powered delivery vehicles, said its top two executives resigned Feb. 1 after an investigation into their share purchases.

Jim Taylor, 65, resigned as CEO of ELMS, and Jason Luo resigned as chairman.

Jim Taylor, the CEO and President of Electric Last Mile Solutions (ELMS) in Troy rolling off the production line of an electric vehicle cargo van being built at the old Hummer H2 plant in Mishawaka, Indiana. Taylor is the former head of Cadillac and former CEO of Hummer who left General Motors in the mid-2000s to launch various start-ups. The ELMS cargo van is the first Class 1 commercial EV in the United States.
Taylor, an entrepreneur who has a colorful history with EV startups, was the subject of a Free Press profile in November about how he started ELMS.

Taylor spent the bulk of his career at GM. He started there in 1980 in Canada, and eventually made it to vehicle line executive for Cadillac in 1995. In 2005, he was promoted to president of Cadillac, then named CEO of Hummer in 2008. He stayed until Hummer was shuttered in 2010 amid GM's bankruptcy restructuring.

Luo was the former CEO of Ford Great China in 2017-18 before going into private equity. Luo declined to comment.

In a Securities and Exchange filing, ELMS said a special committee of the board conducted an investigation that found, shortly before it announced an agreement to go public in December 2020, that some executives, including Taylor and Luo, bought equity at "substantial discounts to market value" without obtaining an independent valuation, meaning there was no third-party appraisal of the equity's market value.

Taylor declined a request for an interview saying he could not speak to the news media.

Both Taylor and Luo remain as consultants to ELMS. The filing listed Taylor will receive $300,000 in the role as consultant; it did not list Luo's salary.

ELMS said former Ford alum Shauna McIntyre, 50, has been named interim CEO of ELMS. McIntyre, who was on ELMS board, is a former chief of staff at Google's consumer electronics division.

She worked at Ford for five years, starting in 1995. There, she "instituted lean manufacturing principles in factories overseas, and later led final assembly production of the Ford Ranger" stateside, said ELMS spokesman Austin Stowe.

Former Intel chief Brian Krzanich was named ELMS non-executive chairman.

"Brian, the full Board and I want to assure all of our stakeholders, including customers, suppliers, investors and employees, of our continued focus and dedication to the company’s ongoing business and mission," McIntyre said in a statement.

In the filing, ELMS also said it will have to restate its financial statements as of Dec. 31, 2020, and the nine months ended Sept. 30, 2021, as part of the investigation.

Shauna McIntyre has been named interim CEO of Electric Last Mile Solution
But Stowe said the company is continuing to run "business as usual." Its small Urban Delivery electric van started production in September at the former Hummer plant in Mishawaka, Indiana.

Stowe said ELMS has completed testing of the van and is finalizing calibration and quality checks before those hit public roads shortly.

ELMS has plans for a larger Urban Utility electric delivery truck, which is on track to launch later this year, Stowe said.

[value1008]

That's an interesting thought. If all we're talking about here with the "scandal" is that Taylor & Luo pre-merger greatly sweetened the deal for themselves in being able to get a lot more shares for a certain value, and there's nothing wrong with the business model, then the analysts' severe PT reductions-- especially Volkmann & Ives' PTs of $2.50 and $4-- are just a way of sh!tting on the co. and remaining shareholders. It's really cruel.

Now, we know that 3 problems HAVE emerged for the biz model: 1) those darned high shipping container costs, which wipe out ELMS' profitability on the vans; 2) the big delays in getting parts shipped at all; 3) the much-delayed homologation, preventing any ramp-up of vans for commercial fleets using the the public roads.

The co. hasn't addressed any of these 3 concerns in months, leaving us in the dark.

I don't have access to those analyst downgrade reports in full, so i don't know if they've provided color or encouragement/discouragement about these issues.

So ELMS shares are still a big mysterious "X factor" as to how this co. should be properly valued.

As i stated the other day, What a clusterf*ck.

[value1008]

There have been at least 7 or 8 firms that have stepped up with their solicitations for plaintiffs-- such c'mons are all over the Stocktwits thread for ELMS.

[worthylion]

Since it's so obvious the market needs an update from new management especially around certification and there's radio silence, it creates the concern that their next PR will be more bad news. Market cap now approaching 2x cash.

[worthylion]

I'm imagining the analysts James Taylor courted and won over are feeling very betrayed by him now as they have egg on their faces for recommending a dud. Instead of dispassionately seeking to determine a new price target, they may now be getting even by actively tanking the stock Taylor still holds.

[worthylion]

Surprised there have been no class action PRs by law firms yet.

[value1008]

I still don't understand what is holding back the full NHTSA certification / homologation. Poking around in my files, i found this Sept. 2021 comment from Croatoan Capital in the lengthy comment thread to his Dec. 2020 SeekingAlpha.com article about ELMS (the first article i ever read about ELMS before starting to invest):


Croatoan Capital
22 Sep. 2021, 8:41 PM
[...] The U.S.-engineered refinements to structural integrity and safety have brought the van to U.S. safety standards. The ELMS van has passed NHTSA safety testing.
Excerpt from https://ir.electriclastmile.com/news/news-details/2021/ELMS-Announces-Successful-Completion-of-Next-Critical-Milestone-for-Start-of-Production/default.aspx: “Incorporating our all new, ELMS-engineered, patented, front bumper energy absorption system along with a series of structural reinforcements allowed the Urban Delivery to meet federal safety testing standards,” added Praveen Cherian, ELMS Vice President of Engineering. “I am extremely pleased with the results of the confirmation test and proud of our global engineering development team at ELMS for their innovative thinking and methods that helped us deliver robust results in a very compressed timeline. This was certainly no ordinary achievement especially being the first Commercial Class 1 EV engineered for the US market.”

------------
So what more does ELMS have to do to achieve homologation? Or is this just waiting endlessly for a final bureaucratic step to occur at the NHTSA?

By the way, Croatoan Capital sadly notes in a much more recent reply to someone on Feb. 3, 2022 that he no longer holds his sizeable amount of shares after the stock crashed this past week.
And on the evening of Feb. 1 after the news first broke, he posted in that same comment thread:

"It is a surprise to put it mildly. I read through the filing. From what I can gather, the timing of the purchases in pre-SPAC stock and the extremely low valuation of that stock was the issue compared to the eventual $10 SPAC price. Had we heard of this investigation prior to today [e.g., in the fine print of an SEC filing]? How did it come about and why did it have to result in the departure of the founders of the company? Were it to rise to a level of behavior deemed criminal, I don't think they would still be employed as consultants and keep their shares. So my immediate impression is that this is messy, unfortunate and unclear why this had to happen. I don't think, given various legal minefields around the actions of these individuals, that we are going to get much more clarity. Maybe the investigation began with the independent accountant who reported it to the board. My guess is the board was not about to ignore it and then become complicit, no matter how inconsequential the infraction ended up being."

--------------
My comment:

If the infractions by co-founders Taylor and Luo are indeed "inconsequential," then the severe negative downgrade reactions by the analysts (especially Volkmann at Jefferies and Ives at Wedbush) and massacre-selloff by the market is unwarranted.

But maybe those two analysts actually know more than they're telling?
That's what keeps me from re-buying shares right now.....

[lalaland]

All of what you suggest should be addressed this week by ELMS. To much carnage at this point. C'mon Shauna let's build a company.

[value1008]

I totally agree! It's a nice video from interim CEO Shauna McIntyre. I only wish it had come out on Tues afternoon with the resignation news.

Going forward, there needs to be:

--homologation / full certification of ELMS vans from NHTSA ASAP or at least news from mgmt on why it's taking so long (if it's merely understaffing due to COVID at NHTSA that will lessen doubt that certification is going to happen),

--then rapid ramp-up of vehicle production to make up for lost time,

--significant cost containment on shipping parts from China,

--renewed commitment from Randy Marion group on purchase orders (last year, Marion himself stated there was "overwhelming demand," which is why i bought FIII/ELMS shares so heavily, but the Fuzzy Panda shortseller report this past week has created FUD on that point),

--if possible, a shortened timeline to getting the Class 3 Urban Utility truck homologated and into production,

--restated financials ASAP so the market has some transparency as McIntyre promised.

[lalaland]

We need a lot more than this video to heal the wounds.

[value1008]

Here's a very warm 3-minute video presentation by the new interim CEO Shauna McIntyre. No news about homologation and ramp-up of production, but she does convey a strong sense of a positive future for ELMS.

https://player.vimeo.com/video/673746556

[value1008]

I've been wanting to see what exactly Jefferies analyst Stephen Volkmann said about ELMS to justify slashing his PT from $18 all the way down to a measly $2.50 in his note released yesterday early a.m. It's very hard to find anything on the internet. So i got the free 1-week trial with StreetInsider.com and this is what is shown under their headline item:

UPDATE: Jefferies Downgrades Electric Last Mile Solutions Inc. (ELMS) to Hold

February 3, 2022 Updated-7:55 AM EST

Jefferies analyst Stephen Volkmann downgraded Electric Last Mile Solutions Inc. (NASDAQ: ELMS) from Buy to Hold with a price target of $2.50 (from $18.00).

The analyst commented, "ELMS recently announced the resignation of its Chairman and CEO following an internal investigation. ELMS is also restating its financials for FY 20/21. The resulting impact on the stock raises the potential for significantly increased costs and cash burn, and the lack of meaningful business updates from the company provides little to reassure markets. We downgrade ELMS to a HOLD and reduce our price target to $2.50."
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Presumably his remark about "increased costs" refers to the prospect of having to raise funds down the road at lower stock prices, and/or bankers not willing to give them lower borrowing terms if they try to finance any debt if/when cash runs low....

[value1008]

For what it's worth, i emailed Erik at IR early yesterday a.m. (I've not heard back from him, though i imagine he's extremely busy responding to whatever major institutional investors are still invested in ELMS):

Hi Erik

With that short report / attack from “Fuzzy Panda Research” yesterday,
and all the severe downgrades / PT reductions from the formerly positive analysts, the new management team really has to step up and defend the ELMS investment thesis, ASAP!

Faithful ELMS investors have been deeply traumatized by the EV sector selloff and now this additional ELMS shareprice plunge on the terrible news and attacks from both shortsellers & analysts, too.

[value1008]

Here's something that spooked me about ELMS-- i never mentioned it on this board before. But it's something that needs to be watched..... Back on Nov. 15, 2021 i emailed IR guy Erik Grossman:

Dear Erik,
[...] the most recent 10-Q document from ELMS contains this passage:

Pursuant to the Agreement, Randy Marion will purchase and ELM will sell to Randy Marion a total of not less than 6,000 of the initial 8,000 Vehicles manufactured and produced by the Company (the “First Order Requirement”).
In connection with the execution of the Agreement, Randy Marion issued a purchase order for 1,000 Vehicles.
Pursuant to the Agreement, Randy Marion is required to issue another purchase order for at least 1,000 Vehicles on or before [Monday] November 15, 2021 and all additional purchase orders required to fulfill the First Order Requirement must be issued by February 28, 2022.


I hope that we hear a news release about such a P.O. very soon, since today (Nov. 15) has come and gone….
------------

Well, Erik never replied to my email (he was the one who had initially reached out to me after i posted an informed comment to a SeekingAlpha article about ELMS last year).

One could argue (as i did in my own mind) that Randy Marion held off on further committed orders due to the delay of NHTSA homologation, but the continued silence from both the NHTSA and Randy Marion is ominous to me.

[value1008]

Rocketeer, the problem is that any other EV co. that emerged via SPAC process is now a "suspect" of having similar insider-trading as happened here with Taylor & Luo, or other "funny money" shenanigans.

That's why so many other EV stocks were "jolted" yesterday by ELMS' "implosion", as stated by the S.Alpha news blurb on the sector's renewed losses.

I wish i still held my 12K NIO shares bought several years ago around $3 (sold at $7), my only previous EV investment other than a brief swing trade on QS.

[rocketeer357]

ELMS has cut deep and left a lot of investors looking for another name in what is a very depressed space. Dead money here IMO, regadless of a certificate or 2.

By the time ELMS re-established credibility, if ever, you will have had plenty of time to make your money in other stocks in the sector.

[value1008]

The Nasdaq down 3% today sure doesn't help with any possible ELMS rebound here today.

[value1008]

Having been so negative with my 2 posts here this a.m., i want to also say that if certification/homologation happens sooner than later, container-shipping costs come down, and actual orders and revenues start pouring in, there's a good chance this goes back to at least the $6s or more...

I also think that the Urban Utility Class 3 truck could be a beautiful and lucrative development for the co. Revenues from that alone would be worth a shareprice in the upper single digits.

But commercial buyers need to have faith that ELMS is going to be a solid player here, around for many years/decades. Without that faith, sales will not be nearly robust enough.....

[value1008]

The irony/tragedy is that i almost sold all shares that late day in June 2021 when ELMS briefly touched $12 in intraday trading and then began to fade. I could have sold everything in upper $11s. It was the ONLY GREEN DAY i had experienced since starting to heavily buy shares in Jan.-Feb. 2021.

Little did i know that Big Money was going to bearishly sell off the EV sector so very hard almost ALL YEAR LONG and then again into this year.

The ELMS investment still "made sense" b/c of it having that former GM factory, relatively low debt, and very little startup costs compared to almost all other EV startups. I figured the shipping container costs would be brought down and ELMS could become profitable sometime in 2023.

Wedbush analyst Dan Ives in his downgrade note yesterday remarked “James Taylor and Jason Luo were the linchpins to the ELMS strategic and holistic vision. Their experience in the automotive industry was unmatched along with their unique relationships with the China OEM market. With both gone [sic] under dark cloud circumstances, the ELMS bull story is tossed out the window. The only reason we are not downgrading to sell is because of the inherent value of the company’s core franchise and potential M&A value.”

I disagreed with Ives here yesterday, noting on this board that the "expertise" of CEO Taylor isn't gone, since he is staying on as a well-paid consultant for the next 2 years.

So Ives' remark doesn't logically make sense.

But the pessimism being shown by Ives and now Volkmann is contagious and influential and will keep too many people away from investing in ELMS for at least the short to medium term.