A lawsuit was filed on behalf of investors in Electric Last Mile Solutions, Inc. (OTC: EMLSQ, formerly NASDAQ: ELMS) shares over alleged securities laws violations.
San Diego, CA -- (SBWIRE) -- 08/22/2023 -- An investor, who purchased shares of Electric Last Mile Solutions, Inc. (OTC: EMLSQ, formerly NASDAQ: ELMS), filed a lawsuit in the U.S. District Court for the District of Delaware over alleged violations of Federal Securities Laws by Electric Last Mile Solutions, Inc. in connection with certain allegedly false and misleading statements made in connection with the public equity ("PIPE") offering conducted by Electric Last Mile on or about December 10, 2020.
Investors who purchased a significant amount of shares of Electric Last Mile Solutions, Inc. (NASDAQ: ELMS) in the PIPE offering conducted by Electric Last Mile on or about December 10, 2020, have certain options and should contact the Shareholders Foundation at email@example.com or call +1(858) 779 - 1554.
Troy, MA based Electric Last Mile Solutions, Inc., a commercial electric vehicle solutions company, focuses on designing, engineering, manufacturing, and customizing electric 'last mile' delivery and utility vehicles.
on or about December 10, 2020 Electric Last Mile Solutions, Inc conducted a offering of common shares in in the private investment in public equity. The offering was consummated in June 2021 Though the offering was marketed only to so-called "accredited investors," it was a widely marketed offering and was fully subscribed.
On February 1, 2022, Electric Last Mile Solutions, Inc.announced that certain executives had resigned, stating, "James Taylor,  has resigned from his role as Chief Executive Officer and a member of the Board. In addition, Brian Krzanich has been appointed Non-Executive Chairman of the Board, replacing Jason Luo, who has also resigned from his position as Executive Chairman of the Board. The departures follow an investigation conducted by a Special Committee of the Board of Directors (the 'Special Committee')."
Additionally, Electric Last Mile Solutions, Inc. acknowledged, "on the basis of the Special Committee investigation, the Board concluded that the Company's previously issued consolidated financial statements should be restated and, therefore, should no longer be relied upon. The financial statements in question cover the period as of December 31, 2020, the period from August 20, 2020 (inception) through December 31, 2020, the six months ended June 30, and the nine months ended September 30, 2021. In connection with this conclusion, the Company, together with its advisors, is evaluating the accounting and treatment of certain equity issuances to executive officers. Although the Company cannot, at this time, estimate when it will file its restated financial statements for such periods, it is diligently pursuing completion of the restatement, including with respect to an evaluation of the Company's financial statement reserves for tax payments and contingencies."
Shares of Electric Last Mile Solutions, Inc. (NASDAQ: ELMS) declined from $7.21 per share in early January 2022 to as low as $1.82 per share on February 8, 2022.
The plaintiff claims that the defendants in the PIPE Offering made false and/or misleading statements and/or failed to disclose that defendants Jason Luo, James Taylor, and other senior members of Electric Last Mile's management had acquired Electric Last Mile common stock at substantial discounts to market value in transactions completed before the PIPE Offering, that the difference between the fair market value of the Electric Last Mile common stock sold in the pre-PIPE Offering transactions and the amount actually paid had not been properly recorded as compensation expense by Electric Last Mile, that the failure to record compensation expenses stemming from the pre-PIPE Offering transactions had the effect of substantially inflating Electric Last Mile's year-end 2020 financial performance and the pro forma year-end 2020 financial performance of the combined company, thereby understating expenses, net loss, and shareholders' deficit, that as a result, Electric Last Mile's historical financial statements could no longer be relied upon and would need to be restated, that the Electric Last Mile historical financial statements provided in proxy statements were not prepared in accordance with Generally Accepted Accounting Principles, and that BDO had failed to follow applicable laws, rules, and regulations regarding auditor independence in auditing the Electric Last Mile historical financials provided in proxy statements.
Those who purchased shares of Electric Last Mile Solutions, Inc. (NASDAQ: ELMS) have certain options and should contact the Shareholders Foundation.
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