It’s tempting to suppose the pattern of EV startups merging with particular goal acquisition firms (SPACs) to go public has ended, seeing what number of of them are struggling or defunct. However that’s not fairly true. A startup known as Thunder Energy Holdings went public on the Nasdaq trade in June by a SPAC, and is now attempting to boost 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 prices.
It’s all proper there in Thunder Energy’s filings with the Securities and Trade Fee, that are required for all public firms. Thunder Energy 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 Workplace introduced prices towards Sham in 2022. The case is now earlier than the Taipei’s District Courtroom Legal Division.
Sham is accused of a lot of securities-related violations associated to Electrical Energy Know-how Restricted, one other firm the place he’s chairman. It has some connections to Thunder Energy. Sham owns roughly 75% of Thunder Energy’s inventory post-merger, and Electrical Energy holds a few of these shares. Sham is accused of utilizing Electrical Energy sources to pay for a “seminar hosted by Thunder Energy.” He’s additionally accused of giving “directions to difficulty a false press launch with the goal of disseminating rumors or deceptive data.”
Following the legal prices, Taiwan’s Securities Investor and Futures Dealer Safety Middle has requested for Sham to be dismissed from his chairman place at Electrical Energy. Thunder Energy’s filings say that Sham has claimed he’s harmless. The corporate didn’t reply to an emailed request for remark.
Thunder Energy is, maybe surprisingly, not a brand new firm. It’s been round in some type way back to 2015, when it confirmed up on the Frankfurt Motor Present and Sham instructed High Gear journal that the corporate was “completed [with] the idea part” and had moved into the “homologation course of.”
Final 12 months, although, in preparation for the SPAC merger, Thunder Energy admitted on web page 31 of its preliminary S-4 submitting that it “has not produced a single electrical car.” That was nonetheless true in Might of this 12 months, in line with one other amended S-4 Submitting. At the moment, Thunder Energy says the one autos that exist are prototypes constructed by a TongGao Superior Manufacturing Know-how (Taicang) Co. Ltd., an affiliate based mostly in China. Thunder Energy 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 Energy struck a monetary cope with Westwood Capital Group LLC, a New York agency that payments itself as an “funding financial institution delivering inventive options to shoppers with advanced monetary wants.”
The deal permits Thunder Energy 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 — just like the numerous 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 Energy shares for coming into into the settlement, although Thunder Energy stated in a submitting this week that it has not but bought any extra shares to the agency.
One caveat, nonetheless: Thunder Energy can’t drive Westwood to purchase extra shares if the share value is under $1 previous to Feb. 20, 2025, or decrease than $1.50 per share after that date. Proper now, shares are buying and selling at lower than $0.50.
