Summary:
Thunder Power Holdings is trying to raise $100 million despite facing CEO legal issues.
CEO Wellen Sham is indicted on 11 criminal charges related to securities violations.
Thunder Power has not produced any electric vehicles since its founding in 2015.
The company has lost over $35 million and reported no revenue to date.
Shares are currently trading under $0.50, complicating fundraising efforts.
The EV Startup Landscape
The trend of EV startups merging with SPACs might seem to be fading, especially with many struggling or becoming defunct. However, Thunder Power Holdings is an exception, having gone public on the Nasdaq in June and is now looking to raise an impressive $100 million through a share sale deal.
Legal Troubles for the CEO
Complicating matters, the company's CEO, Wellen Sham, has been indicted by the Taiwanese government on 11 criminal charges. The legal issues stem from accusations related to Electric Power Technology Limited, another company where he serves as chairman. Notably, he owns 75% of Thunder Power’s stock post-merger.
Details of the Indictment
In documents filed with the Securities and Exchange Commission (SEC), Thunder Power disclosed that Sham faces allegations of using resources from Electric Power for company seminars and issuing misleading press releases. Following these charges, the Securities Investor and Futures Trader Protection Center in Taiwan has requested his dismissal from the chairman position at Electric Power. Sham maintains his innocence but has not commented further on the situation.
Company Background
Founded in 2015, Thunder Power has been on the radar since its appearance at the Frankfurt Motor Show. Despite claims of moving past the concept phase, the company admitted in its initial S-4 filing that it has not produced a single electric vehicle. As of May this year, only prototypes exist, built by an affiliate in China.
Financial Struggles
Since its inception, Thunder Power has reported losses exceeding $35 million and claims to have no revenue, with just $921,349 in cash as of June 30, 2024. Recently, they entered a financial arrangement with Westwood Capital Group LLC, allowing the sale of up to $100 million in shares, although they face strict conditions regarding share prices.
Currently, Thunder Power's shares are trading at under $0.50, raising questions about the feasibility of their fundraising efforts in light of ongoing legal issues and financial instability.
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