Less than a week before its annual meeting, Nikola, a manufacturer of battery- and hydrogen-powered trucks, is appealing with investors to approve a plan to boost its permitted share count. Its contentious creator is opposed to the plan.
The Phoenix-based business, which began shipping electric semis constructed at its Coolidge, Arizona, plant this quarter, seeks to raise much-needed money by increasing the number of outstanding shares by a third to 800 million from the existing 600 million. The company’s annual meeting, which is set for June 30, will decide on the plan.
According to Chairman Steve Girsky in a webcast on Friday, “approving this motion would allow Nikola to expand the number of authorised shares of common stock and would give us with additional flexibility to support, among other things, the expansion of our business.” “Let me be perfectly clear. We need everyone to vote right away because there are only a few days remaining for you to do so.
Since becoming publicly traded in June 2020 through a SPAC merger, Nikola has had a rocky time. Trevor Milton, the company’s founder and still a significant shareholder, was expelled after being charged with misleading investors. He will be tried in federal court in July on multiple counts of fraud. He has said he did nothing wrong. Last year, Nikola resolved the issue with the Securities and Exchange Commission by agreeing to pay a $125 million fine and streamlining operations under CEO Mark Russell. It has also started delivering cars and established a number of new agreements with industrial and energy firms, but money is running out.
Over the past two years, the company’s stock has suffered, falling from a high of $75.06 per share on June 23, 2020, to $5.61 on Friday in Nasdaq trading.
On June 1, Milton cast a no vote at Nikola’s first annual meeting, causing the business to postpone the meeting until the following week.
Although Nikola stated in its first-quarter results filing that it had about $360 million in cash and equivalents, the company actually needs a lot more cash to finish building its Coolidge plant, start producing hydrogen fuel cell trucks, and set up the massive hydrogen fueling infrastructure these vehicles require.
In order for us to expand the number of shares of our company’s common stock, we must receive your support for proposition two, Girsky stated. “Your inaction effectively counts as a vote against this significant measure,” the speaker said.