Too few Nikola Corp. shareholders voted to dilute the minuscule value of their shares and agree to double the number of authorized shares of the financially ailing electric truck maker, the company said Wednesday.

Nikola will keep collecting proxies and restart its virtual annual meeting on July 6, hoping to have enough votes to pass Proposal 2. Nikola (NASDAQ: NKLA) needed more than 50% of its 800 million shares voted in favor of the increased authorization. Most proposals require a simple majority approval by voting shareholders. Nikola might get its way regardless.

The Delaware Senate recently passed a bill approving proposed amendments to the Delaware General Corporation law. It would reduce the threshold for approval to a majority of the shares voting on the proposal. The pending legislation is expected to be effective Aug. 1.

Under this proposed new law, Nikola, which is incorporated in Delaware, would have enough votes to secure approval for Proposal 2, the company said in a news release. Of the votes Proposal 2 votes cast, 77% were in favor. Nikola did not say how short it is of the 50% plus one vote needed.

4 tries for higher Nikola share authorization in 2022

Nikola sought to increase its authorized shares from 600 million to 800 million a year ago. The company had to adjourn its annual meeting three times before garnering enough votes. Nikola hired a proxy solicitation firm to seek out shareholders, some who may have sold their shares but held them at a time they were eligible to vote.

Company founder Trevor Milton voted his majority stake in the company against the share authorization proposal in 2022. Nikola did not say and declined comment Wednesday as to whether or how Milton voted his shares this year.

Milton faces sentencing Sept. 22 on three federal fraud convictions. Each is related to lying about Nikola’s technology prowess and accomplishments to drive the stock price higher. Nikola went public is June 2020 via reverse merger with special purpose acquisition company VectoIQ.

A year ago, Milton also had voting control of 39 million shares jointly owned with former CEO Mark Russell. Those voting rights reverted to Russell this month.

Future rides on share authorization increase

The share increase is critical to Nikola’s survival because it lacks the cash to pay interest that was due May 31 on a $200 million loan from hedge fund Antara Capital. Nikola is aiming to start production of hydrogen fuel cell-powered trucks at a plant in Coolidge, Arizona, in the fourth quarter. It can build battery-electric trucks but has switched to a build-to-order basis.

The company has 178 confirmed orders for fuel cell trucks, which would be the first commercially produced Class 8 fuel cells in the U.S., CEO Michael Lohscheller said in a fireside chat with investors.

“The fuel cell truck momentum is very promising,” he said. “There is potential for us to reach positive gross margin and EBITDA [earnings before interest, taxes, depreciation and amortization] on lower volumes than we previously communicated.”

End customer orders for hydrogen fuel cell trucks include 50 orders from AJR Trucking and 20 for Biagi Bros. as a third party for Anheuser-Busch, which committed in 2018 to order up to 800 fuel cell trucks from Nikola. Plug Power converted an order for five of up to 75 trucks for which it signed a letter of intent (LOI).

“We are seeing those LOIs and indications of interest begin to convert to end customer orders and we look forward to growing our order book and building sales momentum,” Lohscheller said.

Nikola shares closed Wednesday at 59 cents, up 9.46% before the vote totals were released. The stock price is down more than 95% in the past year.

Editor’s note: Updates with voting failing to approve Proposal 2; new date for Milton sentencing and closing stock price.

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