Last Mile Holdings works with banker for strategic alternatives

Last Mile Holdings is working with Rock Creek Advisors on a strategic alternatives process, according to two sources familiar with the situation. The mobility company is considering a cash infusion, bridge financing or a sale of parts or all of its assets, the sources continued.

A majority of the company’s assets are split across two subsidiaries, Gotcha Mobility and Ojo Electric. Gotcha provides e-scooters, e-bikes, pedal bikes and other shareable vehicles, while Ojo Electric owns and operates a proprietary platform used in ridesharing operations.

As part of the sale process, Last Mile is also exploring the divestures of Gotcha’s and Ojo’s intellectual property, pending and active contracts, Ojo’s proprietary platform, current inventory including scooters and e-bikes and accounts receivable, chattel paper and client lists, the sources said.

The company is scheduling a bid deadline for 17 November, an auction for 19 November and anticipates the sale to close by 2 December, the sources added.

While the company has generally operated at a loss since going public via a reverse take-over on 11 November 2019, its loss was compounded in 2Q20, given higher expenses, according to public filings. The company, which is publicly listed on the Toronto Stock Exchange, announced it was initiating a strategic alternatives process on 27 October.

Last Mile Holdings stock closed at USD .0276 cents today, a 93% decline year-to-date, for a market cap of USD 5.96m.

Ojo acquired Gotcha Mobility in a deal that closed in 2020 February and changed the company’s name to Last Mile Holdings from Ojo Electric. The company issued two secured promissory notes in conjunction with the acquisition, USD 804,739 due 28 August 2020 and USD 5m due 28 February 2022, both accruing interest at 12% compounding monthly.

Last Mile is still negotiating final payment terms for the note that matured in August, according to a 15 October earnings release. The company also received a USD 609,890 loan from the United States’ Paycheck Protection Program in May 2020.

For 2Q20 ended 30 June, Last Mile’s revenues grew over 800% to USD 1.062m, from USD 110,197 year-over-year. However, its loss increased to negative USD 3.41m from negative USD 961,805 in 2Q19, filings show.

Cash decreased 62% to USD 275,368 at 30 June, from USD 719,529 on 31 December.

Gotcha has several large customers including Auburn University and Louisiana State University and cities like Mobile, Alabama and Baton Rouge, Louisiana, some of which are working on system expansions, according to public filings. The university and mid-size municipality market represents a USD 60bn opportunity and pre-pandemic, ridership was increasing, with minutes ridden per month increasing 208% between January and May.

“As per our press release, we are running a process and talking to both financial and strategic investors,” Gotcha’s chief marketing officer Anne Morgan told Debtwire.

Rock Creek Advisors declined to comment.

by Catherine Perloff  

View article on Debtwire