DETROIT – Nikola Corp. will ask for shareholder approval to additional dilute the corporate’s inventory by including 200 million new shares to boost capital because it scales manufacturing of its first electrical semitruck.

The corporate mentioned the rise – from 600 million to 800 million shares – is within the “greatest pursuits” of the corporate and its shareholders, in response to Nikola’s proxy assertion filed Friday to the Securities and Trade Fee.

If shareholders do not approve the rise throughout its annual assembly scheduled for June 1, the corporate mentioned it “could also be constrained in its potential to boost capital as a way to help our enterprise goals, and will lose necessary enterprise alternatives, together with to opponents, which may adversely have an effect on our monetary efficiency and progress.”

Primarily based on the Nikola’s inventory value Monday of about $7 a share – down from a 52-week excessive of $19.52 – the corporate would elevate about $1.4 billion in capital from the extra shares. Nikola’s inventory was down by as a lot as 8.6% throughout intraday buying and selling Monday. Shares have declined about 30% in 2022.

Nikola has about 414 million excellent shares, in response to FactSet.

Nikola CFO Kim Brady final month mentioned the embattled electrical car firm, which not too long ago settled a federal probe that charged it with deceptive traders, would “monitor the fairness capital markets intently and elevate extra capital when acceptable in 2022.” 

Nikola had a money steadiness of $522 million at year-end, and it expects to spend between $295 million and $305 million in 2022. It additionally reported to have about $436 million of accessible liquidity by means of two fairness strains.

Nikola final month projected it will generate income of between $90 million and $150 million in 2022 on deliveries of between 300 and 500 of its first battery-electric semitrucks — often known as the Nikola Tre — to clients.

Nikola can even ask for shareholder approval of govt compensation, which incorporates annual salaries of $1 for every govt officer, in response to Nikola Chair Stephen Girsky. Nonetheless, the executives are being compensated in inventory awards that are valued at thousands and thousands of {dollars}.

For instance, Nikola CEO Mark Russell’s complete compensation was $5.6 million in inventory awards in 2021, in response to the submitting. Russell owns 11.7% of the corporate, together with shares co-owned with ousted Nikola founder and chair Trevor Milton, in response to the submitting.

Milton resigned from the corporate in September 2020 after brief vendor Hindenburg Analysis accused him of making false statements concerning the firm’s know-how to draw traders and partnerships.

Milton is scheduled to go on trial April 4 in Manhattan for allegedly defrauding traders in that firm’s IPO, amongst different issues.

— CNBC’s Lora Kolodny contributed to this report.