## The Temptation and Reality of EV Startups Going Public through SPACs
### Introduction
The trend of electric vehicle (EV) startups merging with special purpose acquisition companies (SPACs) to go public has received a lot of attention in recent years. However, many of these startups have faced challenges or even gone bankrupt. Despite this, Thunder Power Holdings, a startup that went public through a SPAC on the Nasdaq exchange, is now seeking to raise up to $100 million through a share sale deal. This article explores the current situation of Thunder Power and sheds light on the controversies surrounding its CEO, Wellen Sham.
### The Controversial Indictment of CEO Wellen Sham
While Thunder Power has gone public, its CEO, Wellen Sham, is facing serious legal issues. Sham has been indicted by the Taiwanese government on 11 criminal charges. Thunder Power’s filings with the Securities and Exchange Commission (SEC) confirm these charges. The case is currently before Taipei’s District Court Criminal Division.
Sham is accused of several securities-related violations related to Electric Power Technology Limited, another company where he serves as chairman. These violations include using Electric Power resources to pay for a seminar hosted by Thunder Power and issuing a false press release with the aim of disseminating rumors or misleading information.
In response to the criminal charges, Taiwan’s Securities Investor and Futures Trader Protection Center has requested Sham’s dismissal from his chairman position at Electric Power. Sham maintains his innocence, but Thunder Power has not provided any official comment on the matter.
### Thunder Power’s History and Current Status
Contrary to popular belief, Thunder Power is not a new company. It has been in existence since 2015 when it made an appearance at the Frankfurt Motor Show. At that time, Wellen Sham stated in an interview with Top Gear magazine that the company had finished the concept phase and moved into the homologation process.
However, in preparation for the SPAC merger, Thunder Power admitted in its initial S-4 filing that it had not produced a single electric vehicle. This statement remained true as of May of the current year, according to another amended S-4 filing. The company’s only existing vehicles are prototypes built by an affiliate based in China.
Moreover, Thunder Power has faced financial challenges, with losses exceeding $35 million since its inception and no revenue to date. As of June 30, 2024, the company had only $921,349 in cash. These financial difficulties raise concerns about the sustainability and future prospects of Thunder Power.
### Thunder Power’s Financial Deal with Westwood Capital Group
To address its financial needs, Thunder Power has struck a deal with Westwood Capital Group LLC, a New York-based firm specializing in providing creative solutions to clients with complex financial needs. This agreement allows Thunder Power to sell up to approximately $100 million worth of shares to Westwood, which the firm can then sell on the open market.
However, Thunder Power has not yet sold any additional shares to Westwood, although the firm has already received $1.5 million worth of Thunder Power shares as compensation for entering into the agreement.
### Share Price and Future Challenges
One important consideration for Thunder Power is its share price. The current trading price is less than $0.50, which raises concerns about the company’s ability to compel Westwood to buy additional shares if the share price remains below certain thresholds.
If the share price is below $1 prior to February 20, 2025, or lower than $1.50 per share after that date, Thunder Power cannot force Westwood to purchase additional shares. This poses a significant challenge for the company’s financial stability and growth potential.
### Conclusion
The story of Thunder Power highlights both the allure and risks associated with EV startups going public through SPACs. While Thunder Power managed to go public and secure a financial deal, its CEO’s legal issues, lack of actual vehicle production, and financial difficulties raise concerns about the company’s long-term viability.
Investors and industry observers should closely monitor Thunder Power’s progress and examine the company’s ability to overcome these challenges. As the EV market continues to evolve, it is crucial to carefully assess the credibility and sustainability of EV startups seeking public funding through SPACs.
