Electric truck maker Nikola won shareholder approval to issue new stock, the company said late on Thursday.
The vote paves the way for Nikola to raise additional funds to support the launch of its fuel-cell-powered electric Tre semitruck and the buildout of a hydrogen refueling network in the U.S. and Canada.
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Nikola was forced to adjourn its annual meeting in June, and again in July, after the total votes fell short of the number required to pass the proposal. The company’s founder and former chairman and CEO, Trevor Milton, had lobbied against the proposal in a series of social media posts.
Milton resigned in 2020, but he still owns about 7.5% of Nikola’s shares and has the right to vote another 5.8% via an investment vehicle 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 block a similar share-increase proposal last year. That proposal also passed, but not until after Nikola adjourned last year’s annual meeting three times to drum up more votes.
Under the law in Delaware, where Nikola is incorporated, the measure originally required approval by owners of at least 50% of the company’s outstanding shares to pass. However, that law changed on Aug. 1, and now only a simple majority of shares voted is required to approve an increase in authorized shares.
Nikola had originally asked shareholders to approve the proposal ahead of its June 6 annual meeting. While the proposal was supported by 77% of those who voted, the total number of shares voted fell short of the 50% threshold then required by Delaware law. A second attempt on July 6 fell short as well.
With Thursday’s passage, Nikola said it can now increase its total shares outstanding from 800 million to 1.6 billion, giving it added flexibility to raise cash by issuing new shares as needed.
The company recently began production of the long-awaited hydrogen fuel cell version of its Tre electric semitruck and expects to make its first deliveries later this year. As of Aug. 2, it had over 200 orders in hand for the new truck.
With approval to issue new shares in hand, Nikola is expected to raise additional cash to help fund the new truck’s production ramp and to expand its hydrogen refueling network in the U.S. and Canada.
Nikola will report its second-quarter results before the U.S. markets open on Friday, Aug. 4.