Hydrogen-electric trucking startup Nikola Corp. filed for Chapter 11 bankruptcy protection after failing to secure additional funds to find buyers or maintain the business.
Nicola was once a Silicon Valley beloved, but was worth $30 billion in June 2020 after being revealed through a special purpose acquisition merger. However, a series of scandals surrounding founder and former CEO Trevor Milton put the company in freefall.
Currently, Nikola will be taking the auction on the property withholding court approval, according to regulatory filings.
“Like other companies in the electric vehicle industry, we face a variety of markets and macroeconomic factors that have influenced our sales capabilities,” Nicola’s president and CEO Steve Girsky said in a statement. It states.
“In the last few months, we’ve taken a lot of action to raise capital, reduce debt, clean our balance sheet, preserve cash and maintain our business. Unfortunately, we’ve seen ours. Best efforts were not sufficient to overcome these important challenges. The Board determined that Chapter 11 represents the best possible pathway in the context of the company and its stakeholders. I did.”
The company has around $47 million in cash on hand to fund the bankruptcy process. Nikola’s proposed bidding process allows stakeholders to file binding offers to acquire Nikola’s assets independent of the company’s debt or liability.
These assets include Nikola’s Class 8 hydrogen fuel cell electric truck and battery electric truck platform. Nicola was also in the process of developing the Hyla Hydrogen Refueling Highway in California.
Bankruptcy filings will be unraveled for years. Nicola was considered a golden example of SPAC that concluded a multi-billion dollar deal with General Motors until Milton was accused of fraud for making exaggerated claims about the company’s electric truck technology.
Prosecutors in the lawsuit against Milton alleged that Nicola had deceived investors since 2019 by building a truck from “Zero” and lying about developing a battery that was actually purchased elsewhere .
Then there was the infamous Nicola Marketing video showing that the truck appears to be driving on its own power. In fact, they were rolling down the hills.
Following that video, a report from the short-seller Hindenburg study called the company a scam, and Milton resigned in September 2020. He was convicted in 2022 of wire and securities fraud. In prison.
Nicola ultimately paid a $125 million fine in a settlement with the Securities and Exchange Commission. The company’s stock collapsed, resulting in serious losses for investors and the company.
Nicola has since tried to raise enough capital to continue the business. Recently, in December 2024, Nicola warned investors during a third quarter revenue call, and then warned investors that the company only had enough cash to support the business. , attempting to pay off the debt and raise $100 million in common stock sales to raise stock. Q1 for 2025.
Nicola reported $188 million in cash at the end of the third quarter.
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