San Francisco law firm Girard Sharp is investigating “potential securities claims on behalf of investors who purchased stock in Virtuoso Acquisition Corp prior to its merger with Wejo Group Ltd,” the embattled Manchester-based auto data specialist
The SPAC merger completed in November 2021, and reportedly raised around $226m for Wejo as Virtuoso stockholders were issued shares of Wejo stock in exchange for their Virtuoso shares.
Since the SPAC merger, Wejo stock has declined from approximately $10 per share to less than $0.03 per share when the Nasdaq closed on Friday. The company was valued at $800m at the time of the merger.
On May 30, 2023, Wejo announced its intention to appoint an administrator pursuant to the Insolvency Act of England and Wales. On May 31, 2023, NASDAQ provided Wejo notice of its intention to delist Wejo shares, and on June 6, 2023, Wejo announced that its shares would be delisted effective June 9, 2021.
Girard Sharp said that its investigation, announced last week, “focuses on potential misrepresentations concerning Wejo and Virtuoso’s business prospects and financial position prior to the merger transaction.” and is urging customers who purchased Virtuoso stock and were issued Wejo shares in connection with the merger, who may have a legal claim, to contact the company via its website.
Also in the US, Wejo has reported its Q1 2023 results to the Securities and Exchange Commission (SEC). The latest figures, dated May 22 and signed off by Wejo CFO John T. Maxwell, show that the company’s liabilties for the three months to March 31 have increased to $80.5m from just over $60m at December 31, 2022, an increase of $20m. Its cash at hand has also reduced from $8.6m on December 31 to just over $800,000 at March 31.
The latest figures would seem to put Wejo back in the $10m-a-month cash burn territory it had reported in late 2021/early 2022.
In a statement accompanying the results, Wejo cast doubt on a proposed second SPAC merger with TKB Critical Technologies, a Cayman Islands registered company set up for the purpose, which was expected to raise around a further $100m for the company by the end of this month.
“The company cannot predict whether and when [merger] conditions will be satisified. The company cannot provide any assurance that the TKB Business Combination will be completed or that there will not be a delay in the completion,” it said.
“Given the company’s current liquidity, cash burn rate and capital readily available to us, management has concluded there is substantial doubt regarding the company’s ability to continue as a going concern within one year from the issuance date of the company’s unaudited condensed consolidated financial statements”
Wejo further predicted that the company may last significantly less than one year in its current circumstances: “The company’s cash flow forecasts indicate that the business can only continue to operate for a very short period of time, which at the time of filing is expected to be no more than a few days, without raising new financing.”
