In a filing on Thursday night with the Securities and Exchange Commission, Nikola recognized seven “Inaccurate” statements that Milton, who left the company in September, would have made between July 2016 and July 2020 about the company’s progress in developing hydrogen and electric trucks. He also listed two other statements attributed to the company during the time when Milton was chief executive.
The statements listed in the lawsuit were all mentioned among the claims made in a September short sales report by Hindenburg Research. Nikola acknowledged, in the process, that the statements listed “were inaccurate in whole or in part when made”.
Nikola and Milton in the past have denied Hindenburg’s accusations. And in Thursday’s lawsuit, the company said that some of Hindbenburg’s claims were not considered accurate by an independent investigation commissioned by the company.
Milton remains the main shareholder of the company, with more than 20% of its shares, despite his departure and the federal investigation into his alleged false statements.
The lawyers representing Milton in some of the lawsuits surrounding the company have not responded to a request for comment on the lawsuit.
Statements listed as inaccurate include a 2016 statement that Nikola had already designed a zero-emissions truck and a 2020 statement that he had five trucks ready to leave the assembly line. Milton also said in late 2019 and again in mid-2020 that Nikola “can produce” more than 1,000 kilograms of hydrogen at the company’s demonstration stations and that the cost of hydrogen has fallen “below” $ 3 a kilogram.
Nikola’s lawsuit also revealed that its costs associated with legal and regulatory issues rose to $ 24.7 million in 2020, with $ 19.5 million coming in the fourth quarter. The company also set aside $ 8.1 million to pay Milton’s legal fees under the contract with him, although he left the company on September 20, the day after receiving the federal subpoena. He has paid $ 1.5 million of that so far.
At the end of Thursday, the company reported a loss of $ 147.1 million in the fourth quarter, compared with a loss of $ 26.3 million in the same period last year. In the year, Nikola lost $ 384.3 million, four times the loss recorded in 2019.
The company said it remains on track to deliver its first semi, the Nikola Tre, to customers before the end of this year. But during a conference call on Thursday, she revised the number of vehicles she expects to deliver in 2021 to just about 100. At a price of around $ 300,000 per truck, that would give Nikola a revenue of around $ 30 millions. Practically has not obtained sales revenue so far.
Nikola went public in June 2020 and his shares skyrocketed, doubling in value in one day, shortly after negotiations began. In August, the company announced an agreement with a major garbage company for up to 5,000 electric garbage trucks that it had not yet designed. In September, just days before the short-seller made the allegations about the company’s claims, Nikola announced an agreement that would have given General Motors (GM) an 11% stake in Nikola and have the two automakers cooperating in an electric pickup truck.
But the shares collapsed in the wake of the allegations and never recovered. It was being traded on Friday for less than half its value before the charges were made public. The garbage truck business was canceled and GM also gave up its business.
The company said it will now focus on heavy trucks and hydrogen fueling stations.
“In the fourth quarter of 2020, Nikola made the necessary changes to reorient and realign the company,” said CEO Mark Russell in announcing the company’s results on Thursday.
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