Nikola Motor Company
Source: Nikola Motor Company
Combat electric truck maker Nikola is looking to pay a $ 125 million fine to the Securities and Exchange Commission under a proposed deal to settle allegations of civil fraud allegedly misleading investors.
The company said Thursday it is “in discussions about a resolution” to the investigation, which, if approved, would include a $ 125 million civil fine payable in installments over two years. The deal is subject to voting by the Securities and Exchange Commission commissioners, Nicola said in a statement.
“We look forward to concluding this chapter with this potential settlement and focusing with renewed determination on building our future,” Nikola CEO Mark Russell told investors on Wednesday in a phone call.
Russell said the amount the company has set aside for the fine is its “best estimate” of a civil fine.
The SEC declined to comment “in addition to the complaint / order” and other public documents.
Third quarter results
A possible resolution was announced at the same time as the company’s third quarter results, including an adjusted loss of 22 cents per share, which was less than the 28 cents loss expected by analysts compiled by Refinitiv.
Nikola shares, which have historically been volatile, jumped 19.5% on Thursday, although the company said its first shipments of zero-emission semi-trailers to dealerships this year will be less than expected. The company also said it may not be able to sell any of these trucks to the companies until next year due to a lack of necessary parts, which are expected to be shipped separately in 2022.
Nikola said it now plans to deliver up to 25 of its battery-electric Tre trailers to dealers and customers this year. It’s down from already a downgraded forecast announced in August from 25 to 50 units, up from 50 to 100 projected earlier this year.
The company said it continues to ramp up semi-trailer production in Germany and Arizona, as well as develop a sales and service network with dealers now in 28 states and more than 130 locations.
“Throughout the third quarter, we continued to deliver on our business plan,” Russell said. “Nikola Tre BEV validation continues, trucks are now being tested on public roads.”
DA Davidson analyst Michael Shlisky said in a note to investors on Thursday that the potential settlement with the SEC is “positive and could open up the stock to new investors.”
The SEC investigation is decoupled from the Justice Department’s criminal investigation, as well as from the fraud charges against Milton, which were announced in June. A federal grand jury accused Milton of lying about “almost every aspect of the business” in order to boost sales of an electric vehicle startup.
In addition, Nicola said she would seek reimbursement from Milton for costs and damages in connection with government and regulatory investigations. In 2020, Nicola paid Milton about $ 1.5 million in legal fees.
– CNBC Michael Bloom contributed to this report.