Electric Last Mile Solutions (ELMSQ) is a name that once held the promise of electrifying the last-mile delivery market. Today, it stands as a stark reminder of the volatility and risk inherent in emerging industries. Declared bankrupt in June 2022, ELMSQ's financial story is far from over. While the company may be gone, its remaining financial data tells a story, one that many analysts seem to have overlooked.

The most glaring anomaly lies within the company's earnings per share (EPS) history. Throughout 2022, and even into the first two quarters of 2023, ELMSQ consistently beat EPS estimates, often by staggering margins. For example, in Q2 2022, the company reported an EPS of $0.00 against an estimated loss of -$0.335, a 100% positive surprise. This trend continued, quarter after quarter, painting a picture of a company defying expectations even as it spiraled towards bankruptcy. How can this be explained?

One hypothesis is that these consistent EPS beats were not indicative of genuine operational improvement but rather a symptom of ELMSQ's financial distress. As the company faced mounting debts and dwindling cash reserves, it's plausible that aggressive cost-cutting measures were implemented. While such measures might artificially inflate EPS in the short term, they are ultimately unsustainable and can mask deeper underlying issues.

This hypothesis is supported by ELMSQ's cash flow statement. In Q3 2021, the company reported a massive decrease in cash and cash equivalents, dropping from $217.4 million to $170.9 million. This drastic reduction, despite the positive EPS figures, points towards aggressive liquidation of assets and a desperate scramble for liquidity, a classic sign of a company on the brink.

Furthermore, the fact that ELMSQ continued to report earnings, albeit with zero revenue, well into 2023 raises eyebrows. This anomaly suggests a potential manipulation of accounting practices, possibly recognizing future revenue prematurely or delaying the recognition of expenses. While this cannot be confirmed without a thorough audit, it casts a shadow of doubt over the accuracy and reliability of ELMSQ's financial reporting during its final stages.

It's essential to remember that ELMSQ's story, while tragic, is not unique. The electric vehicle industry, for all its promise, is littered with the remnants of companies that failed to navigate the choppy waters of market volatility and financial risk. ELMSQ's remaining financial data serves as a cautionary tale, a reminder that even in the face of seemingly positive metrics, a deeper dive beneath the surface is crucial to uncover the true health of a company.

"Fun Fact: The term 'last mile delivery' refers to the final step in the delivery process, from a transportation hub to the end customer. Despite its name, the last mile often represents the most expensive and time-consuming part of the shipping process."