Nikola wins shareholder approval to concern new inventory, paving the best way for vital fundraise

Electrical truck maker Nikola gained shareholder approval to concern new stock, the company talked about late on Thursday.

The vote paves the easiest way for Nikola to carry additional funds to help the launch of its fuel-cell-powered electrical Tre semitruck and the buildout of a hydrogen refueling neighborhood inside the U.S. and Canada.

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Nikola was pressured to adjourn its annual meeting in June, and as soon as extra in July, after your entire votes fell wanting the amount required to maneuver the proposal. The agency’s founder and former chairman and CEO, Trevor Milton, had lobbied in the direction of the proposal in a sequence of social media posts.

Milton resigned in 2020, nonetheless he nonetheless owns about 7.5% of Nikola’s shares and has the suitable to vote one different 5.8% by an funding automotive he co-owns. He was convicted in October on three counts of fraud related to his time at Nikola and is due to be sentenced on Sep. 22.

Milton tried to dam an identical share-increase proposal ultimate yr. That proposal moreover handed, nonetheless not until after Nikola adjourned ultimate yr’s annual meeting 3 instances to drum up additional votes.

Below the laws in Delaware, the place Nikola is built-in, the measure initially required approval by householders of on the very least 50% of the company’s wonderful shares to maneuver. Nevertheless, that laws modified on Aug. 1, and now solely a simple majority of shares voted is required to approve an increase in licensed shares.

Nikola had initially requested shareholders to approve the proposal ahead of its June 6 annual meeting. Whereas the proposal was supported by 77% of people who voted, your entire number of shares voted fell wanting the 50% threshold then required by Delaware laws. A second attempt on July 6 fell temporary as properly.

With Thursday’s passage, Nikola talked about it might effectively now enhance its complete shares wonderful from 800 million to 1.6 billion, giving it added flexibility to carry cash by issuing new shares as wished.

The agency not too way back began manufacturing of the long-awaited hydrogen gasoline cell mannequin of its Tre electrical semitruck and expects to make its first deliveries later this yr. As of Aug. 2, it had over 200 orders in hand for the model new truck.

With approval to concern new shares in hand, Nikola is predicted to carry extra cash to help fund the model new truck’s manufacturing ramp and to extend its hydrogen refueling neighborhood inside the U.S. and Canada.

Nikola will report its second-quarter outcomes sooner than the U.S. markets open on Friday, Aug. 4.