In a filing with the Securities and Exchange Commission late Thursday, Nikola acknowledged seven“false” statements that Milton, who left the company in September, would have made between July 2016 and July 2020 about the company’s progress in the development of electric and hydrogen-powered trucks. It also listed two other statements attributed to the company during Milton’s time as executive chairman.
The statements in the filing were all cited under allegations in a September short seller report by Hindenburg Research. Nikola acknowledged, in the filing, that the stated statements were “in whole or in part incorrect when made”.
Nikola and Milton had in the past denied Hindenburg’s allegations. And in Thursday’s filing, the company said some of Hindbenburg’s allegations had been found incorrect by an independent investigation commissioned by the company.
Milton remains the company’s largest shareholder, with more than 20% stake, despite his departure and the federal investigation into his alleged false statements.
Attorneys who represented Milton in some of the legal proceedings surrounding the company did not respond to a request for comment on the filing.
The statements listed as false include a 2016 claim that Nikola had already designed a zero-emission truck and a 2020 statement that there are five trucks ready to come off the assembly line. Milton also said in late 2019 and mid-2020 that Nikola could “produce” more than 1,000 pounds of hydrogen at the company’s demonstration stations and that it had gotten the cost of hydrogen “below” $ 3 per kilogram.
Nikola’s filing also revealed that regulatory and legal costs exploded to $ 24.7 million in 2020, of which $ 19.5 million in the fourth quarter. The company has also set aside $ 8.1 million for Milton’s legal fees under his contract with him, though he left the company on September 20, the day after he was served with the federal subpoena. Of that, it has paid $ 1.5 million to date.
At the end of Thursday, the company reported a loss of $ 147.1 million in the fourth quarter, compared to a loss of $ 26.3 million in the same period last year. For the year, Nikola lost $ 384.3 million, four times the loss it recorded in 2019.
The company did say it is on track to deliver its first semi, the Nikola Tre, to customers by the end of this year. But at a conference call Thursday, it revised the number of vehicles it expects to deliver by 2021 to just about 100. At a price of about $ 300,000 per truck, that would bring Nikola sales of about $ 30 million. It has collected virtually no sales proceeds so far.
Nikola went public in June 2020 and its stock quickly skyrocketed and doubled in value in one day shortly after it started trading. In August, the company announced a deal with a major waste management company for up to 5,000 electric refuse trucks it had yet to design. In September, just days before the short-seller made the claims about the company’s claims, Nikola announced a deal that would have resulted in General enginesGM an 11% interest in Nikola and let the two car manufacturers work together on an electric pick-up.
But the stock collapsed in the wake of the allegations and has never recovered. It traded at less than half its worth on Friday before the allegations went public. The garbage truck deal was dropped, and GM also withdrew from the deal.
The company said it will now focus on heavy-duty trucks and hydrogen filling stations.
“In the fourth quarter of 2020, Nikola made the necessary changes to refocus and realign the company,” said CEO Mark Russell at the company’s results announcement on Thursday.
