Nikola share count proposal vote due

Will Nikola Corp. shareholders vote to dilute the miniscule and still falling value of their shares by agreeing to double the variety of authorized shares?

Whatever the final result of Proposal 2 due Wednesday, Nikola pledges to maintain trying. And it’d get its way regardless. Nikola (NASDAQ: NKLA)  and needed greater than 50% of all shareholders to vote in favor of the increased authorization. Most proposals require a straightforward majority approval by voting shareholders.

The Delaware Senate recently passed a bill approving proposed amendments to the Delaware General Corporation law. It would cut back the brink for approval to a majority of the shares voting on the proposal. The pending laws is predicted to be effective Aug. 1.

Under this proposed recent law, Nikola, which is incorporated in Delaware, would have enough votes to secure approval for Proposal 2, the corporate said in a news release on Monday.

4 tries for higher Nikola share authorization in 2022

Nikola sought to extend its authorized shares from 600 million to 800 million a 12 months ago. The corporate needed to adjourn its annual meeting 3 times before garnering enough votes. Nikola hired a proxy solicitation firm to hunt down shareholders, some who could have sold their shares but held them at a time they were eligible to vote.

Company founder Trevor Milton voted his majority stake in the corporate against the share authorization proposal in 2022. Nikola was undecided whether to disclose how Milton voted his shares this 12 months. But when the measure fails, it’s a superb bet Milton voted no.

Milton faces sentencing June 21 on three federal fraud convictions. Each is expounded to lying about Nikola’s technology prowess and accomplishments to drive the stock price higher. Nikola went public is June 2020 via reverse merger with special purpose acquisition company VectoIQ.

A 12 months ago, Milton also had voting control of 39 million shares jointly owned with former CEO Mark Russell. Those voting rights reverted to Russell this month.

Future rides on share authorization increase

The share increase is critical to Nikola’s survival since it lacks the money to pay interest that was due May 31 on a $200 million loan from hedge fund Antara Capital. Nikola is aiming to begin production of hydrogen fuel cell-powered trucks at a plant in Coolidge, Arizona, within the fourth quarter. It may construct battery-electric trucks but has switched to a build-to-order basis.

The corporate has 178 confirmed orders for fuel cell trucks, which can be the primary commercially produced Class 8 fuel cells within the U.S., CEO Michael Lohscheller said in a hearth chat with investors.

“The fuel cell truck momentum may be very promising,” he said. “There’s potential for us to succeed in positive gross margin and EBITDA [earnings before interest, taxes, depreciation and amortization] on lower volumes than we previously communicated.”

End customer orders for hydrogen fuel cell trucks include 50 orders from AJR Trucking and 20 for Biagi Bros. as a 3rd party for Anheuser-Busch, which committed in 2018 to order as much as 800 fuel cell trucks from Nikola. Plug Power converted an order for five of as much as 75 trucks for which it signed a letter of intent (LOI).

“We’re seeing those LOIs and indications of interest begin to convert to finish customer orders and we stay up for growing our order book and constructing sales momentum,” Lohscheller said.

Nikola shares traded Wednesday at 58 cents, up about 6% before the vote totals were released. The stock is down greater than 95% previously 12 months.

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