Nikola wants to increase shares by 200 million

San Pedro, CA – December 17: The very first two zero-emissions electrical vans, from an get of 100 autos, delivered from the Nikola Company to Whole Transportation Expert services at the Port of Los Angeles in San Pedro on Friday, December 17, 2021.

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DETROIT – Nikola Corp. will question for shareholder acceptance to more dilute the firm’s stock by incorporating 200 million new shares to increase cash as it scales creation of its initial electric powered semitruck.

The business stated the increase – from 600 million to 800 million shares – is in the “most effective passions” of the corporation and its shareholders, in accordance to Nikola’s proxy statement submitted Friday to the Securities and Exchange Fee.

If shareholders really don’t approve the improve in the course of its yearly meeting scheduled for June 1, the organization claimed it “may perhaps be constrained in its ability to increase money in purchase to support our enterprise targets, and might eliminate important business possibilities, which include to rivals, which could adversely have an effect on our economical efficiency and progress.”

Dependent on Nikola’s closing price tag Monday of $6.87 a share – down from a 52-week significant of $19.52 – the firm would raise about $1.4 billion in capital from the supplemental shares. Nikola’s stock has declined about 30% in 2022, including an 8.6% fall on Monday.

Nikola has about 414 million superb shares, according to FactSet.

Nikola CFO Kim Brady previous thirty day period reported the embattled electric powered automobile company, which recently settled a federal probe that billed it with deceptive buyers, would “observe the equity capital marketplaces intently and raise additional funds when ideal in 2022.” 

Nikola experienced a money equilibrium of $522 million at yr-stop, and it expects to devote involving $295 million and $305 million in 2022. It also described to have about $436 million of out there liquidity by two equity traces.

Trevor Milton, founder of Nikola Corp., center, exits federal courtroom in New York, U.S., on Thursday, July 29, 2021.

Angus Mordant | Bloomberg | Getty Photographs

Nikola very last thirty day period projected it would create profits of among $90 million and $150 million in 2022 on deliveries of in between 300 and 500 of its to start with battery-electric powered semitrucks — identified as the Nikola Tre — to prospects.

Nikola will also ask for shareholder approval of executive payment, which features yearly salaries of $1 for each individual government officer, in accordance to Nikola Chair Stephen Girsky. However, the executives are becoming compensated in stock awards that are valued at millions of pounds.

For instance, Nikola CEO Mark Russell’s complete compensation was $5.6 million in inventory awards in 2021, according to the submitting. Russell owns 11.7% of the enterprise, such as shares co-owned with ousted Nikola founder and chair Trevor Milton, in accordance to the filing.

Milton resigned from the company in September 2020 just after brief vendor Hindenburg Research accused him of making wrong statements about the company’s technology to entice buyers and partnerships.

Milton is scheduled to go on demo April 4 in Manhattan for allegedly defrauding buyers in that firm’s IPO, amongst other things.

— CNBC’s Lora Kolodny contributed to this report.