Twersky Law Group, a highly regarded and reputable law firm based in New York, wishes to inform investors about a significant development in the form of a class action lawsuit against Electric Last Mile Solutions Inc. (“Last Mile Solutions” or “the Company) (NASDAQ: ELMSQ) and certain officers of the company. This lawsuit has been filed on behalf of all individuals and entities that purchased or otherwise acquired Last Mile Solutions securities from December 10, 2020, through June 14, 2023 (the “Class Period”). Investors who acquired Last Mile Solutions securities during this defined timeframe are strongly encouraged to participate in this case by contacting atara@twerskylawgroup.com. The deadline to file a motion for appointment of lead plaintiff is August 14, 2023.
The fundamental objective of this class action lawsuit is to recover for the benefit of investors who purchased Last Mile Solutions securities during the Class Period, the losses they sustained as a consequence of the misleading statements made by Defendants in violation of the federal securities laws.
ALLEGATIONS TOWARDS LAST MILE SOLUTIONS
Prior to its delisting, Electric Last Mile was a publicly traded company created through the June 25, 2021 merger of a privately held company called Electric Last Mile, Inc. and a publicly traded special purpose acquisition company (SPAC or blank-check company), then called Forum Merger III Corporation (“FIII”), with FIII serving as the surviving entity and changing its name to Electric Last Mile Solutions after the merger. The PIPE Offering was consummated in June 2021 in connection with the closing of the merger to raise additional funds to operate the post-merger, combined company Electric Last Mile and as a backstop to any potential shareholder redemption. As the Electric Last Mile class action lawsuit alleges, defendants made false and/or misleading statements and/or failed to disclose that: (i) 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; (ii) 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; (iii) 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; (iv) as a result, Electric Last Mile’s historical financial statements could no longer be relied upon and would need to be restated; (v) the Electric Last Mile historical financial statements provided in proxy statements were not prepared in accordance with Generally Accepted Accounting Principles; and (vi) 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. On February 1, 2022, Electric Last Mile disclosed that an investigation by a special committee of the Board of Directors had discovered that Electric Last Mile’s senior management had acquired Electric Last Mile shares at “substantial discounts to market value” in certain equity transactions carried out at the end of 2020, and that the difference between the fair market value and the amount actually paid should have been, but was not, recorded as compensation. Electric Last Mile stated that it further had failed to “disclose any compensation associated with those transactions; or withhold or pay taxes in connection with that compensation.” As a result, the historical financial statements of Electric Last Mile and the post-merger company should not be relied upon and would need to be restated. Electric Last Mile also revealed that it expected to determine that material weaknesses existed in its internal controls over financial reporting and disclosure controls and procedures. Electric Last Mile also disclosed that both Luo and Taylor were leaving the company. On this news, the price of Electric Last Mile common stock declined more than 51%. Then, on March 11, 2022, Electric Last Mile confirmed an ongoing U.S. Securities and Exchange Commission investigation and disclosed that it was withdrawing its previous financial guidance, was suffering production and launch delays for its vehicles, and that it would need to raise additional capital in order to continue its launch plans. On this news, the price of Electric Last Mile common stock declined more than 48%. Finally, on or about June 13, 2022, Electric Last Mile announced that it was planning to liquidate through a Chapter 7 bankruptcy filing. As a result, Electric Last Mile stock sold in the PIPE Offering became virtually worthless, further damaging investors.
ABOUT LAST MILE SOLUTIONS
What is Electric Last Mile Solutions and who started the company?
- Electric Last Mile Solutions (ELMS) is an electric vehicle (EV) company focused on developing efficient last-mile delivery solutions. It was founded in 2020 by James Taylor and David S. Brooke. The company’s main product is an all-electric delivery van called the Urban Delivery.
What happened to Electric Last Mile Solutions?
- The company filed for bankruptcy in June, less than a year after it went public through a $1.4 billion SPAC deal.
Why did Electric Last Mile Solutions Fail?
- According to news sources, Electric Last Mile Solutions said it will liquidate its assets via a Chapter 7 bankruptcy process. ELMS has been unable to secure financing since its founder and CEO departed in February after an investigation found the company’s financial statements to be unreliable.[1]
JOIN THIS CASE
It is important to note that a class action lawsuit has already been filed in connection with these allegations. Therefore, for those individuals who suffered financial losses in their investments in Electric Last Mile Solutions during the Class Period, there is a limited opportunity to seek appointment as a lead plaintiff. This process entails requesting the Court to designate them as the primary representative on behalf of the entire class. The deadline for submitting such a request is August 14, 2023. It is important to emphasize that while becoming a lead plaintiff can offer certain advantages, participation in the recovery process and the potential for financial compensation does not mandate serving as a lead plaintiff.
Twersky Law Group, a distinguished legal firm renowned for its attorneys expertise in handling securities fraud class actions and shareholder derivative suits, who have a long-standing track record of successfully recovering significant sums of money for investors nationwide. With an unwavering commitment to seeking justice for their clients, the firm’s attorneys are resolute in pursuing fair compensation on behalf of those affected by alleged securities law violations. As with any legal matter, it is essential to understand that this announcement constitutes attorney advertising. Past case outcomes and results achieved do not guarantee similar outcomes in this particular case.
Investors who believe they may qualify as potential class members in the class action lawsuit against Electric Last Mile Solutions Inc. are strongly encouraged to reach out directly to the firm for further information and assistance. The knowledgeable legal professionals at Twersky Law Group stand ready to provide guidance and support to investors seeking to protect their rights and pursue the recovery they deserve.
ABOUT US
For more information as well as to join this case please contact Atara Twersky, Esq. at atara@twerskylawgroup.com. Atara is Principal at Twersky Law Group and of counsel at AF&T Law Firm where she is director of Investor Services. Atara focuses her practice on assisting her clients with increasing their investment portfolio recoveries and ensuring that their portfolios remain healthy and robust. For more information on shareholder recoveries, listen to Atara ’s Pension and Investments Podcast with notable guests in the pension fund Industry that discusses various matters relating to investment portfolios. For more information on Atara and her legal work pertaining to shareholder protection click here.
