It’s tempting to think the trend of EV startups merging with special purpose acquisition companies (SPACs) to go public has ended, seeing how many of them are struggling or defunct. But that’s not quite true. A startup called Thunder Power Holdings went public on the Nasdaq exchange in June through a SPAC, and is now trying to raise up to $100 million more through a share sale deal.
All this is happening even as the CEO of the company, Wellen Sham, has been indicted by the Taiwanese government on 11 criminal charges.
It’s all right there in Thunder Power’s filings with the Securities and Exchange Commission, which are required for all public companies. Thunder Power spells it out on page 46 of this amended S-4 filing from April, where it explains that the Taipei District Prosecutor’s Office brought charges against Sham in 2022. The case is now before Taipei’s District Court Criminal Division.
Sham is accused of a number of securities-related violations related to Electric Power Technology Limited, another company where he’s chairman. It has some connections to Thunder Power. Sham owns roughly 75% of Thunder Power’s stock post-merger, and Electric Power holds some of those shares. Sham is accused of using Electric Power resources to pay for a “seminar hosted by Thunder Power.” He’s also accused of giving “instructions to issue a false press release with the aim of disseminating rumors or misleading information.”
Following the criminal charges, Taiwan’s Securities Investor and Futures Trader Protection Center has asked for Sham to be dismissed from his chairman position at Electric Power. Thunder Power’s filings say that Sham has claimed he is innocent. The company did not respond to an emailed request for comment.
Thunder Power is, perhaps surprisingly, not a new company. It’s been around in some form as far back as 2015, when it showed up at the Frankfurt Motor Show and Sham told Top Gear magazine that the company was “finished [with] the concept phase” and had moved into the “homologation process.”
Last year, though, in preparation for the SPAC merger, Thunder Power admitted on page 31 of its initial S-4 filing that it “has not produced a single electric vehicle.” That was still true in May of this year, according to another amended S-4 filing. At that time, Thunder Power says the only vehicles that exist are prototypes built by a Tonggao Advanced Manufacturing Technology (Taicang) Co. Ltd., an affiliate based in China. Thunder Power has lost more than $35 million since its inception and says it has “no revenue.” It had just $921,349 in cash as of June 30, 2024.
After going public in June, Thunder Power struck a financial deal with Westwood Capital Group LLC, a New York firm that bills itself as an “investment bank delivering creative solutions to clients with complex financial needs.”
The deal allows Thunder Power to sell up to around $100 million worth of shares to Westwood, which the firm can then turn around and sell on the open market — similar to the many deals that New Jersey-based Yorkville Advisors has struck with EV startups and other companies that merged with SPACs. Westwood has already been paid with $1.5 million worth of Thunder Power shares for entering into the agreement, though Thunder Power said in a filing this week that it has not yet sold any more shares to the firm.
One caveat, however: Thunder Power can’t force Westwood to buy additional shares if the share price is below $1 prior to February 20, 2025, or lower than $1.50 per share after that date. Right now, shares are trading at less than $0.50.
