Contends the Case for Significant Change in
the Boardroom is Clear Following Years of Poor Corporate
Governance, Operational Underperformance, Stock Dilution and
Considerable Financial Losses
Highlights the Destruction of Nearly 100% of
Nikola’s Value Since Chief Executive Officer Steve Girsky and Chair
Steve Shindler Took Control in 2020
Notes That Group’s Five Highly Qualified and
Independent Director Candidates Possess Experience in Strategic
Planning, Executive Leadership, Operations, Manufacturing
and the Electric Vehicle Industry
M&M Residual, LLC (together with its affiliates and the
participants named herein, the “Concerned Stockholder Group,” “we”
or our “Group”) owns approximately 4.5% of the outstanding common
stock of Nikola Corporation (Nasdaq: NKLA) (“Nikola” or the
“Company”), making it a top stockholder. Today, the Concerned
Stockholder Group issued the below statement regarding its
nomination of five highly qualified and independent director
candidates for election to the Company’s nine-member Board of
Directors (the “Board”) at the 2024 Annual Meeting of Stockholders
(the “2024 Annual Meeting”).
“Our five-member slate of highly qualified and independent
candidates is excited about the opportunity to help fix Nikola’s
addressable issues and put the Company back on the path to value
creation. Since taking over as Chair in 2020, CEO Steve Girsky and
his Board have overseen a staggering and consistent decline in
Nikola’s stock from $30+ per share to a delisting Nasdaq price of
less than seventy cents per share.1 Clearly, the status quo cannot
continue. While the Board recently publicly stated that it rejected
our nominations, the reality is that the Company has not legally
done so and that our nominations still stand. Our slate of director
candidates is highly qualified, wholly independent and focused on
one goal: implementing a lasting turnaround that unlocks the
significant potential of Nikola.
For approximately four years now, the Board has overseen
operational underperformance, value destructive acquisitions, the
breakdown of the Iveco Group-Nikola partnership, the loss of
meaningful European market share and the sale of key assets while
taking on debt. These actions (among other concerning missteps
surrounding safety and disclosures) have resulted in the
destruction of nearly 100% of stockholder value.2 Concerningly,
the Board also diluted Nikola shares to the tune of an additional
800 million last year, so that over 1.6 billion total shares are
now authorized with over 1 billion shares in circulation.3 After
destroying significant value and diluting stockholders as Chair,
Steve Girsky then took the helm as CEO in August 2023. Under Mr.
Girsky’s leadership, stockholders suffered an approximate 72%
decline in value. No matter how you look at it, over all relevant
time periods this management team and Board have obliterated
stockholder value and put our Company at risk.
In our view, such disastrous returns reflect these individuals’
inability to lead the Company. In fact, our Group has been
approached by numerous stockholders who want to see CEO Steve
Girsky and his Board replaced with high-integrity individuals. This
is a reasonable request, especially considering Nikola recently
disclosed that substantial doubt exists regarding its ability to
continue as a going concern through the next 12 months.4 This
followed a material weakness being identified in the Company’s 2022
financial reporting. Time is clearly of the essence for Nikola
stockholders who cannot afford to wait – the time for boardroom
change is now.
In stark contrast to the current Board, our independent slate
includes proven founders and executives who collectively possess
the operational, supply chain and electric vehicle experience that
we believe will be required to initiate a value-enhancing
turnaround at Nikola. Our five-member slate has already begun
working on an operating strategy that considers the interests of
stockholders, employees, partners and customers. In the coming
weeks, we look forward to engaging with our fellow stockholders to
achieve our goal of helping Nikola enhance its corporate
governance, improve operations, increase sales, pay off debt and
optimize the Company’s capital structure. With the right leadership
and strategy in place, we believe Nikola can return to its pole
position as a next-generation provider of revolutionary energy and
transportation solutions.”
The Concerned Stockholder Group’s highly qualified and
independent slate of director candidates include:
Cole Cannon
Mr. Cannon is a local entrepreneur and lawyer with extensive
M&A experience that would be extremely valuable to the Nikola
Board.
- Founder of EMBR Motors Inc., a vehicle manufacturing start-up
steeped in EV technology that recently acquired all the Badger,
Powersport and WAV programs from Nikola Corp.
- Owner and attorney at Cannon Law Group, PLLC, a law firm he
founded in 2008 specializing in business, mergers &
acquisitions, real estate and personal planning services.
- Currently serves on the University of Utah National Honors
Advisory Board of Directors and in leadership positions for several
real estate development companies in Arizona, as well as the
co-owner and manager of Action Opportunity Fund, a qualified
opportunity fund that focuses on improving opportunity zones areas
in Arizona and Utah.
Derek Johnson
Mr. Johnson possesses significant business management,
logistics and supply chain experience that would be extremely
valuable to the Nikola Board.
- Founder of Cowboy Up, LLC, a business consulting company
focused on developing comprehensive business strategies and
achieving profitability improvements, as well as operational and
financial efficiencies for clients.
- Previously served as a Route Manager at Western Wyoming
Beverages, Inc., a supplier and distributor of alcoholic and soft
beverages.
- Holds a B.S. in Business Management, Logistics, Materials and
Supply Chain Management from Brigham Young University – Idaho and a
M.B.A in Logistics, Materials and Supply Chain Management from the
Marriott School of Business at Brigham Young University.
Hans Peterson
Mr. Peterson is an entrepreneur with extensive experience in
the custom vehicle space that would be extremely valuable to the
Nikola Board.
- Serves as the Vice President of Marketing and Relations at
Sparks Motors, LLC, a builder and seller of custom high-performance
vehicles.
- Previously served in positions of increasing seniority at
Sparks Motors, LLC, including Shop Manager and Social Media
Manager, since 2015.
- Currently owns and operates Hans on Management, a real estate
management and rental company.
Paul Southam
Mr. Southam is a former CEO with two decades of executive
management experience and prior board service that would be
extremely valuable to the Nikola Board.
- Co-Founder and Chairman of the Board of Directors of Figure
Financial, Inc., a privately held tax strategy company.
- Currently serves as Co-Founder and Chairman of the Board of
Directors of Clear Home, Inc. (f/k/a Clear Satellite, Inc.), a
privately held home service sales and installation company.
- Previously served as Chief Executive Officer of Clear Home,
Inc. for over twenty years.
Dave Sparks
Mr. Sparks is a founder and CEO of multiple vehicle
manufacturer and marketplace companies with extensive engineering
and electric vehicle technology experience that would be extremely
valuable to the Nikola Board.
- Founder and Chief Executive Officer of Sparks Motors, LLC, a
builder and seller of custom high-performance vehicles.
- Founder of EMBR Motors Inc., a vehicle manufacturing start-up
steeped in EV technology that recently acquired all the Badger,
Powersport and WAV programs from Nikola Corp.
- Previously served as Co-Founder and Chief Executive Officer of
DieselSellerz.com, LLC, an online classified listings company for
buying and selling vehicles.
- An expert in social media and influencing with millions of
followers who closely follow his ventures.
***
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
M&M Residual, LLC, a Nevada limited liability company
(“M&M Residual”), together with the other participants named
herein (collectively, the “Concerned Stockholders”), intend to file
a preliminary proxy statement and accompanying universal proxy card
with the Securities and Exchange Commission (the “SEC”) to be used
to solicit votes for the election of its slate of director nominees
at the 2024 annual meeting of stockholders of Nikola Corporation, a
Delaware corporation (the “Company”).
THE CONCERNED STOCKHOLDERS STRONGLY ADVISE ALL STOCKHOLDERS OF
THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS
AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON
THE SEC’S WEBSITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE
PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE
PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST.
REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS' PROXY
SOLICITOR.
The participants in the proxy solicitation are anticipated to be
M&M Residual, Trevor R. Milton, Cole Cannon, Derek Johnson,
Hans Peterson, Paul Southam, and Dave Sparks.
As of the date hereof, M&M Residual directly owns 51,047,726
shares of common stock, par value $0.0001 per share, of the Company
(the “Common Stock”). As of the date hereof, as the Manager of
M&M Residual, Mr. Milton may be deemed to beneficially own the
51,047,726 shares of Common Stock directly owned by M&M
Residual and Mr. Milton may be deemed to beneficially own the
1,250,000 shares of Common Stock directly owned by Mr. Milton’s
spouse, constituting an aggregate of 52,297,726 shares of Common
Stock. As of the date hereof, Mr. Peterson directly owns 71 shares
of Common Stock. As of the date hereof, Mr. Sparks directly owns
164 shares of Common Stock. As of the date hereof, none of Messrs.
Cannon, Johnson, or Southam own any shares of Common Stock.
***
1 Source: Bloomberg. 2 Total stockholder returns (“TSR”) since
CEO Steve Girsky joined the Board on June 4, 2020 is -97.90%. TSR
since Chairman Steve Shindler joined the Board on September 29,
2020 is -96.04%. TSR includes dividends reinvested using a closing
price of February 8, 2024, the day before Nikola made the Group’s
nomination public. Source: Bloomberg. 3 Details regarding Proposal
Two: Amendment to Our Restated Certificate to Increase the
Authorized Number of Shares of Common Stock included in the
Company’s preliminary 2023 Proxy Statement filed April 24, 2023
(here). 4 Nikola 10-Q filed November 2, 2023.
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Saratoga Proxy Consulting LLC John Ferguson / Joe Mills,
212-257-1311 info@saratogaproxy.com
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