Nikola adjourned its annual meeting for a second time because it lacked the votes to double the number of its outstanding shares. But the next try in August comes down to a pen stroke from Delaware Gov. John Carney.
The electric truck maker and hydrogen developer currently needs 50% plus one vote to allow it to raise the number of outstanding shares to 1.6 billion from 800 million. Too few shareholders so far have agreed. But a rule change in the state where Phoenix-based Nikola is incorporated could decide the issue. That is expected on Aug.1, two days before Nikola plans to count votes again.
Some of the new shares would be sold to help Nikola pay interest on a $200 million loan from hedge fund Antara Capital. The remainder could help Nikola raise capital to scale the fuel cell truck and hydrogen production and distribution business.
The Delaware House of Representatives on Friday adopted amendments to the Delaware general corporation law lowering the threshold of votes from a majority of outstanding shares to shares voting. The state Senate approved the changes in May.
Nikola has enough votes to pass the share increase proposal under the lower threshold. The company has used a proxy solicitation firm in the past to seek additional proxies. It no longer needs to do that if Carney signs the legislation.
Related articles:
Nikola moves to liquidate battery pack maker Romeo Power
Nikola cashes out of European JV and refocuses on fuel cells at home
Analysis: How would a Nikola failure affect hydrogen’s prospects?