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Nikola shareholders vote to issue new shares over Trevor Milton’s objection

Electric truck manufacturer Nicholas finally got shareholder approval to issue new shares, the company announced on Tuesday. Nikola has been trying for two months to win enough votes to overcome the objection of its since deceased founder, who previously voted his 20% stake in Nikola against the proposal.

The company said it can now increase the total number of shares outstanding from 600 million to 800 million, giving it the flexibility to raise funds by issuing new funds if needed. More than 66% of total votes cast, or more than 211 million shares, were in favor of the proposal, Nikola said in a statement.

The measure required the approval of owners of at least 50% of the company’s outstanding shares to pass.

The company’s June 1 annual meeting of shareholders was adjourned after Nikola founder and former CEO and chairman Trevor Milton voted against the proposal. The meeting briefly resumed June 30thand again on July 18before being adjourned again each time, the total number of votes in favor not having reached the required threshold.

Milton, who founded Nikola in 2014, left the company in September 2020 continued fraud allegations. He remains the main shareholder of the company. Milton owns approximately 11% of Nikola shares and controls a further 9% through an investment vehicle he co-owns, giving him effective control of approximately 90 million shares of Nikola.

Milton was indicted by a federal grand jury on four counts of fraud related to the representations he made to potential investors of Nikola. His trial is due to begin in September. Milton denied the allegations.

Nikola said on Monday that he had agreed to acquire battery supplier Power of Romeo in a $144 million all-stock transaction that will not require it to issue any new shares. The truckmaker is expected to release its second-quarter results — and its plans for additional stock — before U.S. markets open on Thursday.

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