Nikola postpones shareholder meeting again, as founder Trevor Milton blocks stock-issue plan

Trevor Milton, CEO and founder of US Nikola, speaks during the presentation of its new full-electric and hydrogen fuel-cell battery trucks in partnership with CNH Industrial at an event in Turin, Italy on December 2, 2019.

Massimo Pinka | Reuters

Electric Truck Manufacturer nikolas The company said on Monday that it once again fell short of obtaining shareholder approval to raise fresh funds. This measure has so far been blocked by the late founder of the company.

In a brief webcast on Monday, Chairman Steven Girsky said the vote on a proposal to issue new shares is closer than it was a few weeks ago, but the tally still shied away from passing the 50% outstanding shares. The meeting has been adjourned till August 2.

Nikola’s shares were largely flat in after-hours trading after the meeting ended.

Nikola is trying to raise funds by issuing new stock, a process that requires shareholder approval. The company’s June 1 annual shareholders meeting was postponed after the company’s founder and former CEO and chairman Trevor Milton voted against the proposal. The meeting resumed briefly on 30 June, only postponed again Because the motion still did not have votes to pass.

milton left the company among allegation of fraud in 2020, but he remains Nikola’s largest shareholder. He owns 11% of the company’s stock outright and controls about 9% more through an investment vehicle that he co-owns, giving him control of approximately 90 million shares of Nikola stock.

For the new shares proposal to pass, 50% of Nikola’s outstanding shares must be voted in. As of July 18, Girsky said, the vote is within 0.5% of passing, or less than 1.6 million shares.

Nikola isn’t in immediate danger of running out of cash, but the freedom to issue new shares will give it financial flexibility. Finance chief Kim Brady said in May that the company had enough cash Fund its operations for at least one more year, But he also noted that Nikola is burning about $180 million per quarter, and then said that it had a share offering in its plans for later in 2022.

As of March 31, Nikola had $385 million in cash on hand and another $409 million available through Tuimim Stone Capital’s equity line. It raised an additional $200 million in May by issuing a convertible note.

Milton, who founded Nikola in 2015, abruptly quit in September 2020 after short-seller Hindenburg Research accused him of making false statements to investors about the company’s technology and order book.

A federal grand jury has since indicted Milton. four cases of fraud Relating to statements he made to investors about Nikola’s business. His trial is currently scheduled to begin in September. Milton has denied the allegations.

Nikola will report its second-quarter results before the US market opens on August 4.

Correction: This article has been updated to correct Kim Brady’s pronouns.