Nikola moves shareholders’ meeting for the third time

The third time since June, Nikola Corp, a manufacturer of electric vehicles, has postponed its annual shareholder meeting to give shareholders more time to consider a request to increase the number of shares outstanding.

The corporation said on Monday that the meeting has been postponed until August 2. After Chairman Stephen Girsky requested voters to approve a rise in shares by 200 million to 800 million, the meeting was initially postponed on June 1.

Girsky stated in a short webcast on that although the vote on the plan to issue new shares just got closer, the total is still below the threshold of 50% of the outstanding shares required to pass.

Following the meeting, Nikola's shares traded nearly flat in after-hours trading.

Nikola hopes to raise money by issuing new shares; nevertheless, this process needs shareholder consent.

Trevor Milton, the company's founder and previous CEO and chairman, cast a no vote, forcing the company's annual shareholders meeting on June 1 to be postponed. On June 30, the meeting was briefly restarted before being again adjourned since the idea still lacked the necessary support.

Despite fraud claims, Milton quit the business in 2020, but he is still Nikola's greatest shareholder. In total, he controls around 90 million shares of Nikola stock because he has direct ownership of 11% of the company's stock and co-ownership of another investment vehicle that holds another 9% of the stock.

A majority of Nikola's outstanding shares must vote in favor of the new-shares proposal in order for it to be approved. According to Girsky, as of July 18, the vote is just 0.5%, or less than 1.6 million shares, away from passing.

Before the U.S. markets open on August 4, Nikola will release its second-quarter earnings.

Although Nikola is not currently in risk of going bankrupt, having the ability to issue additional shares would provide it that flexibility.

As of March 31, Nikola had around $1 billion in cash on hand, with $385 million in cash and an extra $409 million accessible through an equity line from Tumim Stone Capital. Nikola obtained $200 million through a convertible note offering in May.

Kim Brady, Nikola's CFO, stated in May that the company has enough cash on hand as a result of the convertible note sale to sustain business for at least a year without any pay increases. Brady stated at the time that the company was using around $180 million per quarter and that a share sale was scheduled for later this year.

After allegedly making false statements to shareholders about the company's technology and order book, Milton, who launched Nikola in 2015, left the company unexpectedly in September 2020.

Milton has since been charged with four charges of fraud in connection with claims he made to shareholders Nikola's company. The claims have been refuted by Milton.