Thunder Power Holdings, an electric vehicle startup with a public listing on Nasdaq, is seeking to raise an additional $100 million through a share sale deal, despite facing significant challenges, including the indictment of its CEO, Wellen Sham, by the Taiwanese government. The company, which merged with a special purpose acquisition company (SPAC) earlier this year, revealed in filings with the Securities and Exchange Commission (SEC) that Sham faces 11 criminal charges, including allegations of securities violations and misleading information dissemination.
The charges stem from Sham’s actions related to Electric Power Technology Limited, a separate entity where he also serves as chairman. According to the filings, Sham allegedly misused company resources and issued a false press release. Despite these charges, Sham maintains his innocence, and no comments have been provided by Thunder Power in response to inquiries about the case.
Thunder Power has been in existence since 2015 but has yet to produce a single electric vehicle, as disclosed in multiple SEC filings. Instead, the company only has prototypes built by a Chinese affiliate and has reported no revenue, with accumulated losses exceeding $35 million. As of June 30, 2024, Thunder Power held just $921,349 in cash.
To boost its financial standing, the company entered a deal with Westwood Capital Group LLC, an investment bank, allowing Thunder Power to sell up to $100 million worth of shares. However, the arrangement includes stipulations, such as Westwood not being obligated to purchase shares if Thunder Power’s stock price falls below $1 by February 2025. As of now, Thunder Power’s shares are trading at under $0.50.
This financial maneuver comes amid growing skepticism about the viability of EV startups that went public through SPACs, many of which have struggled or become defunct. Nevertheless, Thunder Power is pushing forward with its efforts, although it faces a difficult road ahead with its stock price and legal issues casting uncertainty on the company’s future.
