The company said that it failed to win shareholder approval to raise funds. The measure has been stopped by the founder.
While the vote on the proposal to issue new shares is closer than it was a few weeks ago, the tally is still short of the 50% needed to pass. The meeting will be held again in August.
After the meeting ended, the shares of Nikola were not much changed.
New stock is a process that needs shareholder approval. The company's June 1 annual shareholders' meeting was adjourned after its founder and former CEO voted against the proposal The proposal still didn't have the votes to pass so the meeting was adjourned for a second time on June 30.
The company was accused of fraud in 2020 but its largest shareholder is still alive and well. He has control of about 90 million shares of the company's stock through an investment vehicle that he co-owns, giving him a controlling stake.
50% of the outstanding shares must be voted in favor of the new-share proposal. The vote is less than 1.6 million shares and is close to passing.
The freedom to issue new shares would give it financial flexibility. Kim Brady, the company's finance chief, said in May that the company had enough cash on hand to last another year. She said that a share offering was built into the company's plans for later in the year.
The cash on hand was $385 million and the equity line was $400 million. It raised an additional $200 million by issuing a convertible note.
The founder of the company left in September 2020 after being accused of making false statements to investors.
A federal grand jury indicted a man on four counts of fraud for making false statements to investors. The trial is scheduled to begin in September. The allegations have been denied by the man.
The second quarter results will be reported before the markets open in the U.S.
All Rights Reserved © 2024
