Complaint Filed Against ElectraMeccanica in Connection With Termination of Arrangement

Rhea-AI Summary

ElectraMeccanica (NASDAQ: SOLO) faces $75 million complaint from Tevva Motors for breach of contract, defamation, and tortious interference. Tevva seeks injunctive relief and punitive damages.

Positive

• ElectraMeccanica's announcement of a $75 million complaint from Tevva Motors could potentially impact investor confidence and stock performance.
• The company's intention to vigorously defend their position and pursue legal rights and remedies against Tevva may reassure investors of their commitment to protecting their interests.

Negative

• None.

MESA, Ariz.--(BUSINESS WIRE)-- ElectraMeccanica Vehicles Corp. (NASDAQ: SOLO) (“ElectraMeccanica”), a designer and assembler of electric vehicles, today announced that Tevva Motors Limited (“Tevva”) filed a complaint (the “Complaint”) in the United States District Court for the District of Arizona on November 3, 2023 against ElectraMeccanica, 1432952 B.C. Ltd. (“Holdco”), 1432957 B.C. Ltd. (“Parentco”) and Susan E. Docherty, ElectraMeccanica’s Chief Executive Officer and Interim Chief Operating Officer.

As previously announced, on October 4, 2023, ElectraMeccanica notified Tevva of the termination of that certain arrangement agreement (the “Arrangement Agreement”) dated August 14, 2023, by and among ElectraMeccanica, Tevva, Holdco and Parentco, pursuant to which ElectraMeccanica and Tevva were to combine by way of a statutory plan of arrangement under the Business Corporations Act (British Columbia) (the “Arrangement”).

The Complaint alleges breach of contract, defamation and tortious interference by the defendants, as applicable, in connection with the Arrangement Agreement and the transactions contemplated therein. The Complaint seeks actual damages of US$75 million, unspecified punitive damages and attorneys’ fees and costs. Additionally, the Complaint seeks preliminary and permanent injunctive relief (i) preliminarily prohibiting ElectraMeccanica from completing a merger with any other merger partner pending resolution of the Complaint; (ii) preventing ElectraMeccanica from dissipating its cash reserves through dividend or otherwise; (iii) requiring ElectraMeccanica to complete the Arrangement with Tevva; and (iv) otherwise requiring effectuation of the Arrangement.

ElectraMeccanica and the other defendants believe that Tevva’s allegations are without merit and intend to vigorously defend their position to the fullest extent permitted by law. ElectraMeccanica also intends to pursue its own legal rights and remedies against Tevva.

About ElectraMeccanica

ElectraMeccanica (NASDAQ: SOLO) is a designer and assembler of environmentally efficient electric vehicles intended to enhance the urban driving experience, including commuting, delivery and shared mobility.

Safe Harbor Statement

This press release includes “forward-looking statements” within the meaning of U.S. federal securities laws and applicable Canadian securities laws. Forward-looking statements may be identified by words or expressions such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” “may,” “will,” “projects,” “could,” “should,” “would,” “seek,” “forecast,” or other similar expressions. Forward-looking statements represent current judgments about possible future events, including, but not limited to, statements regarding ElectraMeccanica’s and the other defendants’ intent to vigorously defend their position to the fullest extent permitted by law, as well as ElectraMeccanica’s intent to pursue its own legal rights and remedies against Tevva. Forward-looking statements are based on the current beliefs or expectations of the management of ElectraMeccanica and are inherently subject to a number of risks, uncertainties, and assumptions, most of which are difficult to predict and many of which are beyond ElectraMeccanica’s control. Actual results may differ materially from those expressed or implied in the forward-looking statements due to risks and uncertainties including, but not limited to, whether ElectraMeccanica will be successful in its defense against the allegations under the Complaint or in any future legal proceedings against Tevva. Additional factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements can be found in ElectraMeccanica’s filings with the Securities and Exchange Commission (the “SEC”), including its Annual Report on Form 10-K for the fiscal year ended December 31, 2022, its Quarterly Reports on Form 10-Q filed with the SEC during 2023, as well as in its subsequent filings with the SEC. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements. It is uncertain whether any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what impact they will have on the results of operations and financial condition of ElectraMeccanica. Forward-looking statements speak only as of the date they are made, and ElectraMeccanica undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events, or other factors that affect the subject of these statements, except where it is expressly required to do so by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231107400884/en/

John Franklin

ir@emvauto.com

Source: ElectraMeccanica Vehicles Corp.

FAQ

What is the complaint filed against ElectraMeccanica by Tevva Motors?

Tevva Motors filed a complaint in the United States District Court for the District of Arizona against ElectraMeccanica, Holdco, Parentco, and Susan E. Docherty, alleging breach of contract, defamation, and tortious interference.

What damages does Tevva seek?

Tevva seeks actual damages of US$75 million, unspecified punitive damages, and attorneys’ fees and costs.

What relief does Tevva seek in the complaint?

Tevva seeks preliminary and permanent injunctive relief, including prohibiting ElectraMeccanica from completing a merger with any other partner, preventing the dissipation of cash reserves, and requiring completion of the Arrangement with Tevva.

What is ElectraMeccanica's response to the complaint?

ElectraMeccanica and the other defendants believe that Tevva’s allegations are without merit and intend to vigorously defend their position to the fullest extent permitted by law. They also intend to pursue their own legal rights and remedies against Tevva.