The Norweigan EV maker, Think, has undergone so many corporate deaths and rebirths their corporate symbol ought to be The Phoenix, the mythical bird which symbolizes death and rebirth. In recent years a consortium of investors formed to support Think's vision and fund it into production, and that consortium included Ener1 parent corporation to battery maker EnerDel. Earlier this year Think went (again) into bankruptcy only to be rescued (again) by a new investment group, but along the way Ener1 completely wrote off their investment in Think and last week filed a series of documents with the SEC explaining they will be late with their quarterly filings, and that they'll be restating their earnings and financial condition over the last year or so. Their August 19 SEC filing said that NASDAQ is threatening to delist Ener1 from the stock market due to the late 10-Q filing.
The problem began before Think's bankrupty filing in June this year. In May the company granted to Think an extension on repaying a loan from Ener1 to Think. An AP report from last week says that, also in May, Ener1 completely wrote off their investment in Think, a full month before Think's bankruptcy. On April 8, 2011 Ener1 terminated the employment (a.k.a. fired) of then COO and President of EnerDel, giving him a lump payment of $250,000. No explanation for the firing was given, but it did occur shortly after Christopher Cowger was hired to be CEO.
In May 2011 Ener1 filed their 10-Q on time along with a statement by their new CEO, Christopher Cowger, saying the 10-Q was completely accurate. That 10-Q gives this history: In 2009 and 2010 we made separate strategic investments in Think Holdings, AS (Think Holdings), a Norwegian limited liability company and the majority owner of Think Global, AS (Think Global), an EV manufacturer. As of March 31, 2011, we controlled approximately 48% of the outstanding voting power in Think Holdings and two individuals who serve on the Board of Directors of Ener1 also serve on the board of directors of Think Holdings. On April 26, 2011, one of these two individuals resigned from the board of directors of Think Holdings. On May 9, 2011, we surrendered to Think Holdings, for no consideration, all shares of Think Holdings’ voting equity held by Ener1, including, without limitation, all shares of Series B Convertible Preferred Stock (Series B Stock).
They began building battery packs for Think in 2010 and stopped doing so in January 2011 at Think's request. The May 10-Q said Ener1 did not know when Think would resume buying batteries, because that depended on Think's ability to continue operations.
Clearly the beginnings of this problem date back to January 2011 or earlier.
Last week Ener1 filed several documents with the SEC which, taken together, indicate serious troubles. On Aug 9, 2011 they notified the SEC they would not be able to file their 10-Q on time. They referred to a June 22 filing saying their audit committee had determined a material charge would have to be recognized against Ener1 because of their loan to Think, which Think was unable to repay. In May they granted an extension on loan repayments to Think. Then on Aug 16, 2011 another SEC filing said Ener1's audit committee determined nobody should trust any of Ener1's financial reporting for all of 2010 and the first quarter of 2011, and that Ener1 would be restating earnings for that whole period. Then on Aug 19, 2011, they announced recept from NASDAQ that Ener1 would be delisted from the stock exchange because the company no longer qualified to be listed. They have until October 2011 to file the 10-Q and get other attributes of their company in order, so that they would remain qualified to be listed on the NASDAQ.
The Aug 16 filing included a preliminary financial results chart which implied they should have written off the Think investment in 2010 rather than in 2011. For fiscal year 2010 the accumulated deficit (loss) should have been $506 million rather than the reported $410 million, and by the end of the first quarter the accumulated deficit should have been $527 million rather than the reported $495 million.
Ener1 recently signed a distribution deal with electric motorcycle manufacturer, Lightning Motorcycles.
See:
Think investment is driving Ener1 off a cliff
Recent SEC filings by Ener1 concerning their investment in Think
EnerDel parent encounters cash-flow problems
EXTENSION OF REPAYMENT DATE granted by Ener1 to Think
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