Nikola Corp. has earmarked $125 million for a proposed settlement with the U.S. Securities and Exchange Commission that would resolve the nagging fraud allegations the electric automaker have faced since going public in 2020.
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The company’s discussions and possible settlement with the SEC stem from an investigation in which Nikola’s founder, Trevor Milton, was accused of overstating its technology in a short-seller’s report.
If approved by the agency, the resolution would see Nikola paying a $125 million penalty over two years, which the reserved as a loss in its accrued liabilities for the most recent quarter.
The SEC had charged Milton for using social media to mislead investors about the company’s capabilities, garnering “tens of millions of dollars” as a result of his misconduct. He stepped down in September 2020 but was also charged criminally for his involvement prior to his departure.
Nikola said it also plans to seek reimbursement from Milton “for costs and damages arising from the actions that are the subject of the government and regulatory investigations.”
“The company continues to cooperate with the Division of Enforcement to fully resolve the matter,” Nikola said in its quarterly report. “There can be no assurance as to the timing or final terms of any resolution, and the company may not be able to reach a resolution at all.”
As the Phoenix, Arizona-based startup works on moving forward, Nikola announced it has started building pre-series trucks in its Coolidge facility and still looks to deliver up to 25 trucks to dealers and customers by December.
In September, Nikola signed a deal with Germany’s Bosch Group to build Bosch fuel-cell power modules at its facility in Coolidge for two of its trucks powered by hydrogen fuel-cells.
The truck maker also stated that it has built seven hydrogen fuel-cell trucks that are currently being tested in both Germany and the United States. The goal is to progress to road release by the end of 2021.
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