By SCOTT DOGGETT November 2, 2011
Ener1 Inc., the struggling parent of Indianapolis-based advanced-battery maker EnerDel, has been booted off the NASDAQ stock exchange. The New York-based company said in a filing early last week with the Securities and Exchange Commission that it would be suspended from the exchange starting last Thursday due to non-compliance with filing requirements. NASDAQ did indeed delist Ener1 and the company said it has no intention of appealing the action.
The delisting has relegated Ener1 shares to penny-stock status on the over-the-counter bulletin board, making the shares considerably more difficult to purchase. Ener1 stock had traded at $4 a share in January, when Vice President Joe Biden visited the company’s Greenfield, Indiana, battery plant to tout it as an example of the economic promise of so-called green energy businesses. Ener1 has received a $118.5 million grant from the Department of Energy for advanced battery manufacturing and has applied for a $290 million federally guaranteed loan as well. Its sinking fortunes now have put Ener1 squarely in the sights of Congressional critics of federal lending programs for clean energy and advanced automotive technologies. The company employed about 350 people at the time of Biden’s visit — today Ener1 stock trades for less than 20 cents a share and the company has shed many of its workers.
Hurt by Reliance on Think
The dramatic tumble in fortune is due in large part to Ener1’s heavy reliance upon Norwegian electric-vehicle maker Think, which was the major customer for EnerDel lithium-ion batteries. Think was unable to sell its vehicles in significant numbers and earlier this year declared bankruptcy, leaving EnerDel without a customer. In earlier efforts to cement Think as a battery source and to help the struggling EV maker through hard times, Ener1 had investednearly $90 million in Think and supplied it with at least $35 million worth of batteries. Ener1 has said it has no expectation of recouping any of that money.
Furthermore, Ener1 announced a deal in August to sell up to $50 million in common stock over the next two years to investment firm Aspire Capital and said at the time that the agreement and a previously announced $15 million line of credit from a major investor “and approximately $27 million in projected cash flow from product delivered to Federal Grid Corporation, provides Ener1 with the financial resources we need to continue to execute our business plan.” That announcement led to further shareholder investment in Ener1. Some of those shareholders have since filed suit, contending the company deceived them.
According to its most recent SEC filing, Ener1 failed to meet an Oct. 17 deadline to file a quarterly report for the period ended June 30. In addition, the company said the NASDAQ determined that Ener1 violated shareholder approval requirements in amending a line of credit. Ener1 also was in violation of a NASDAQ requirement that its stock price not fall below a minimum of $1 a share – a level Ener1 shares haven’t seen since July.
Scott Doggett: is an AutoObserver.com Associate Editor.