Nikola Adjourns Annual Meeting, Seeks More Votes on Shares

Truck Maker’s Hydrogen Ambitions on Hold as Hunt for More Funds Continues
Nikola Tre
Nikola Tre by Nikola Corp.

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Nikola’s bid to issue more shares and obtain enough funding needed for its Class 8 hydrogen fuel cell truck ambitions is on hold for another month, it said June 7.

Phoenix-based Nikola adjourned its 2023 annual stockholder meeting until July 6 after failing to win enough support from beleaguered existing investors to issue more shares — a key move in plans to raise more money to fund truck manufacturing and hydrogen production, and repay interest on a loan.

Known as Proposal 2 on the voting slate for the meeting, the plan requires a majority of all outstanding common stock vote in the affirmative. The company said more than 77% of the equity owners that voted through June 6 had been in favor of the plan, but not enough stockholders voted.

Nikola conducted a public courting of stockholders through statements, filings and social media in an effort to win enough votes. Sufficient votes were received to approve five other proposals at the annual meeting.

However, pending changes to laws of incorporation in Delaware, where Nikola is incorporated, may aid the company’s cause, lowering the number of votes required for share issuance approval to a majority of those participating. Were that amendment already in place, Nikola said it would have secured enough votes June 7.

Nikola faced a similar challenge at last year’s annual meeting as it sought to increase its authorized shares to 800 million from 600 million, which resulted in several adjournments to allow for more time to get the votes needed.

If the shareholders do not vote in sufficient numbers for a dilution of their holdings and to decrease the value of their investment, Nikola has warned it may need to carry out a reverse stock split. Such a move would help Nikola’s stock price and allow it to avoid being delisted by Nasdaq.

The exchange warned the truck maker in May it was in danger of being delisted because Nikola’s share price remained below $1 for 30 consecutive days. Nikola’s stock price is down more than 95% over the past year, although it rose June 8 after the vote.

Without the approval of Proposal 2, Nikola says its “business objectives will be delayed or compromised.”

Nikola needs extra funds because of the company’s furious rate of cash burn. The company posted a net loss of $169.1 million, or 31 cents per diluted share, in the first quarter of 2023, compared with a $152.9 million loss in the prior-year period, it said. It had $121.1 million cash on hand at the end of the first quarter, compared with $233 million a year earlier.

As a result, the company announced a strategy revamp when unveiling its first-quarter earnings. It said battery electric truck (BET) production at its Coolidge, Ariz., facility would pause by the end of May ahead of a pivot to just production of hydrogen fuel cell vehicles.

Michael Lohscheller


Nikola plans to retool the Coolidge facility ahead of a scheduled production line restart in July, when BETs will only be available on a “build-to-order” basis, CEO Michael Lohscheller said during the company’s quarterly earnings call May 9. Nikola is losing money on each BET it sells.

That retooling had been in the works for some time, Nikola spokesman Dan Passe told Transport Topics on June 7. The restart is about six weeks away, Passe said, adding that the retooling was running on schedule. After the retooling is complete, he said, the company will be using about 70% of the same parts. He did not have immediate figures for how much the retooling would cost.

Alongside funding the retooling and pivot to hydrogen trucks, Nikola needs extra cash for its role in building out the hydrogen fueling infrastructure its future vehicles will need. In May, Nikola inked a deal with Herndon, Va.-based electric and hydrogen fueling infrastructure specialist Voltera to develop up to 50 HYLA hydrogen refueling stations. Voltera is backed by Swedish investment group EQT.

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“The future of Nikola is hydrogen,” Lohscheller said on the call, adding that the upside in the United States and Canada was “unlimited” due to government backing such as the Inflation Reduction Act and the Department of Energy’s loans for innovative automotive and clean energy companies.

Nikola is continuing to work on completing Phase 2 of the DOE Loan Program Office application process, Passe said June 7. The application for a loan guarantee under the Innovative Clean Energy projects solicitation could amount to as much as $1.3 billion for a facility that could produce up to 150 metric tons of hydrogen per day using renewable electricity.