Two top leaders at Troy-based Electric Last Mile Solutions Inc. have resigned after an investigation found they purchased equity in the company “at substantial discounts to market offer” before ELMS went public.
Both former CEO James Taylor and Jason Luo, former executive chairman of the board, will maintain consulting roles with the electric commercial vehicle company, ELMS said in a press release.
Shauna McIntyre, a member of the company’s board of directors, has been appointed as interim CEO and president, succeeding Taylor, who also resigned as a member of the board. ELMS appointed Brian Krzanich as non-executive chairman of the board.
McIntyre most recently served as president of Ouster Automotive after more than 25 years working in the auto industry.
The resignations from Taylor and Luo came after findings were released from the board’s special committee that conducted an investigation into sales of equity securities made by those associated with ELMS.
The committee found that shortly before the company announced it would merge with a special-purpose acquisition company to go public, “executives purchased equity in the company at substantial discounts to market value without obtaining an independent valuation,” the company said in a press release this week. “Mr. Taylor purchased equity in these transactions. Mr. Luo participated in these and other transactions and directly or indirectly purchased and sold equity in such transactions.”
ELMS went public in a reverse merger with blank-check company Forum Merger III Corp., the combined value of which was pegged at $1.4 billion. Such a deal is an increasingly popular way for startups to go public without going through the traditional process of an initial public offering.
ELMS opened on its first day of trading in June at $11.10 per share and closed up nearly 13.5%. In midafternoon trading Wednesday, the stock was down 40.34% to $3.34.
Taylor and Luo were co-founders of the company, which said it began production in September of its Urban Delivery van at a plant in Mishawaka, Indiana.
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