It’s tempting to assume the pattern of EV startups merging with particular objective acquisition firms (SPACs) to go public has ended, seeing what number of of them are struggling or defunct. But that’s not fairly true. A startup known as Thunder Power Holdings went public on the Nasdaq alternate in June by a SPAC, and is now making an attempt to lift as much as $100 million extra by a share sale deal.
All that is taking place even because the CEO of the corporate, Wellen Sham, has been indicted by the Taiwanese authorities on 11 legal expenses.
It’s all proper there in Thunder Power’s filings with the Securities and Exchange Commission, that are required for all public firms. Thunder Power spells it out on web page 46 of this amended S-4 submitting from April, the place it explains that the Taipei District Prosecutor’s Office introduced expenses towards Sham in 2022. The case is now earlier than Taipei’s District Court Criminal Division.
Sham is accused of plenty of securities-related violations associated to Electric Power Technology Limited, one other firm the place he’s chairman. It has some connections to Thunder Power. Sham owns roughly 75% of Thunder Power’s inventory post-merger, and Electric Power holds a few of these shares. Sham is accused of utilizing Electric Power assets to pay for a “seminar hosted by Thunder Power.” He’s additionally accused of giving “directions to problem a false press launch with the purpose of disseminating rumors or deceptive data.”
Following the legal expenses, Taiwan’s Securities Investor and Futures Trader Protection Center has requested for Sham to be dismissed from his chairman place at Electric Power. Thunder Power’s filings say that Sham has claimed he’s harmless. The firm didn’t reply to an emailed request for remark.
Thunder Power is, maybe surprisingly, not a brand new firm. It’s been round in some kind way back to 2015, when it confirmed up on the Frankfurt Motor Show and Sham advised Top Gear journal that the corporate was “completed [with] the idea section” and had moved into the “homologation course of.”
Last 12 months, although, in preparation for the SPAC merger, Thunder Power admitted on web page 31 of its preliminary S-4 submitting that it “has not produced a single electrical automobile.” That was nonetheless true in May of this 12 months, in accordance with one other amended S-4 submitting. At that point, Thunder Power says the one autos that exist are prototypes constructed by a Tonggao Advanced Manufacturing Technology (Taicang) Co. Ltd., an affiliate based mostly in China. Thunder Power has misplaced greater than $35 million since its inception and says it has “no income.” It had simply $921,349 in money as of June 30, 2024.
After going public in June, Thunder Power struck a monetary take care of Westwood Capital Group LLC, a New York agency that payments itself as an “funding financial institution delivering inventive options to shoppers with complicated monetary wants.”
The deal permits Thunder Power to promote as much as round $100 million value of shares to Westwood, which the agency can then flip round and promote on the open market — much like the various offers that New Jersey-based Yorkville Advisors has struck with EV startups and different firms that merged with SPACs. Westwood has already been paid with $1.5 million value of Thunder Power shares for getting into into the settlement, although Thunder Power stated in a submitting this week that it has not but bought any extra shares to the agency.
One caveat, nonetheless: Thunder Power can’t power Westwood to purchase extra shares if the share value is under $1 previous to February 20, 2025, or decrease than $1.50 per share after that date. Right now, shares are buying and selling at lower than $0.50.
