Nikola (NASDAQ:NKLA) Corporation (NASDAQ:NKLA), a company specializing in zero-emissions transportation and infrastructure solutions, has revised its equity distribution agreement with Citigroup Global Markets Inc., as per the latest 8-K filing with the Securities and Exchange Commission today.
Under the updated agreement, Nikola has the option to sell common stock shares up to the value of $311.7 million. This remaining amount is part of a larger $600 million authorization, which was previously established. The sales, if executed, will be conducted through an "at-the-market" offering, allowing the company to sell shares directly into the trading market at prevailing market prices.
Citigroup will serve as the sales agent and will receive a 2.5% commission on the gross proceeds from any shares sold under this agreement. Nikola has emphasized that there is no obligation to sell any shares and retains the right to suspend sales at their discretion. Additionally, the agreement can be terminated by either party at any time without incurring any liability.
The shares in question are part of a shelf registration statement that was declared effective by the SEC on April 14, 2022. The related prospectus, along with a supplementary prospectus updated as of today, outlines an aggregate offering price of up to $95 million, which represents nearly the full amount available under the company's shelf registration statement.
The amended agreement also includes customary indemnification rights for Citigroup Global Markets Inc. It is important to note that this current report does not constitute an offer to sell or the solicitation of an offer to buy, and no sales will occur in states where such offers or sales are prohibited prior to registration or qualification under the securities laws of those states.
The update to the equity distribution agreement reflects Nikola's ongoing efforts to manage its capital resources and fund its operations and growth initiatives. The filing ensures transparency with shareholders and the market regarding the company's financing strategies and potential future equity sales.
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