E Automotive Inc., which is the parent company of EBlock and EDealer, said Monday it is voluntarily delisting from the Toronto Stock Exchange.

The move has been approved by E Inc.’s board of directors and shareholders and the Toronto Stock Exchange.

E Inc. will also launch a substantial issuer bid where the company is offering to repurchase for cancellation up to $7.5 million of its shares to give existing shareholders an opportunity for liquidity prior to the voluntary delisting.

The company anticipates the delisting to happen on or around May 24.

“Together with our Board of Directors and advisors, we have decided to voluntarily stop trading on the Toronto Stock Exchange (TSX). E INC will remain a ‘reporting issuer’ that continues to provide comprehensive public disclosure, but shares will no longer trade on any stock exchange,” E Inc. president and CEO Jason McClenahan said in emailed comments.

“On the TSX today, our trading volumes are limited because the total number of E INC shares available for trading is extremely low. Low trading volume makes it difficult to attract institutional investors and can drive volatility in the price of our shares that is unrelated to the performance of our business,” McClenahan said.

“At E INC, our performance metrics are increasingly positive but, we have concerns this won’t be reflected in our share price going forward, in which case the costs of being  listed would exceed the benefits,” he added. “We are excited about the future of E INC.

“We believe that, in the wake of the delisting, the value of our shares will be based on the fundamental performance of our business, including size, growth, technology, profitability and taking into consideration valuation relative to similar companies. This will put us in a position of strength while maintaining flexibility to return to the TSX or a U.S. exchange in the future.”

In the news release, E Inc. explained that one of the things it considered in making this decision was “the direct and indirect costs associated with having the Company’s Shares listed on a stock exchange and the significant changes in the Company’s institutional shareholder base since its oversubscribed initial public offering.”

The company’s IPO was in November 2021.

More than 90% of the IPO was comprised by institutional investors, but most of those investors sold their positions in E Inc. before the company had reported a quarter following the IPO, due to economic and market condition deterioration, E Inc said.

In fact, E Inc. estimates that roughly 95% of institutional investors who obtained shares during the IPO have since sold.

“The company also considered its extremely limited trading volumes and the company’s small public float (approximately 10% of the shares are held by investors who are not members of management, directors or employees of the company),” E Inc. said in the news release. “Limited trading volumes and a small public float limit future institutional investment opportunities and can drive volatility in the price of the company’s shares unrelated to the company’s performance.

“However, should market conditions and company performance improve, the company may seek to list its shares again in the future in connection with investment from institutional investors,” it added

E Inc. noted that it compared the option of delisting against going private. Ultimately it determined that delisting’s benefits outweighed those of a private sale.