Monday, July 22, 2024

Amid financial peril, Nikola changes CFO

Nikola Corp. Chief Financial Officer Kim Brady will retire in April as the electric truck maker’s finances raise survivability questions.

Brady, 59, served five years as CFO. He was instrumental in Nikola going public in June 2020 in a reverse merger with special purpose acquisition company VectoIQ. Steve Girsky, the CEO of the automotive technology consultancy, is chairman of Nikola’s board.

Anastasiya “Stasy” Pasterick, currently Nikola vice president and corporate controller, will succeed Brady as CFO. 

Departure unsurprising given Nikola’s finances

Brady’s retirement was unsurprising given the rapid decline in the company’s finances. It recently filed a notice of going concern with the Securities and Exchange Commission. Such notices typically suggest a company cannot guarantee business viability a year into the future.

In a Feb. 25 interview with FreightWaves, Brady dismissed the going concern notice as “accounting language” unreflective of reality.

Brady maintained the company has adequate liquidity to operate for the next 12 months. However, much of that is in equity instruments through which Nikola would sell stock to raise operating capital. In addition to $323 million in cash at the end of 2022, the company has three sources through which it can sell shares to raise capital. 

It plans to spend $200 million less than last year, and Nikola is in “better shape” than it was at the end of 2021, Brady said.

Truck production under way but slowed by high material costs

Nikola is building battery-electric trucks at a partially completed factory in Coolidge, Arizona. But its materials cost more than Nikola can book in revenue. Therefore, the production pace has slowed to one or two trucks a day. Production of hydrogen-powered fuel cell Class 8 trucks is expected to begin in the fourth quarter.

Nikola is also pursuing partnerships to make and distribute hydrogen fuel for those trucks. That includes a company-designed mobile refueler that could fill two trucks back to back.

With its stock price closing Monday at $1.51 a share, any equity sale would require a significant number of shares that would dilute current holders. Nikola’s auditors said they did not feel the company could confidently find buyers. It advised Nikola against counting on selling stock through an at-the-market arrangement with CitiGroup or an equity line of credit with Tumim Stone Capital.

Outspoken in criticism of Nikola founder

Brady was among the most outspoken government witnesses in the federal fraud trial of Nikola founder Trevor Milton during Milton’s trial in New York last fall.

Milton’s statements about the company in media interviews and on social media posts “could be inaccurate or exaggerated,” Brady testified. Institutional investors also questioned Milton’s fitness to be CEO, according to Brady. Milton gave up the CEO position to become executive chairman when the SPAC merger concluded.

A jury convicted Milton of three counts of fraud and he is awaiting sentencing, currently scheduled for June 27.

Pasterick ran day-to-day finances

Pasterick will lead Nikola’s finance and accounting team, including investor relations, strategic finance and treasury.

“Stasy’s proven financial acumen and attention to detail are the capabilities the company needs now as we build on the momentum surrounding the unveiling of our new energy brand, HYLA, the commercialization of our Class 8 battery-electric truck and the pending production of our Class 8 hydrogen fuel cell vehicle,” Michael Lohscheller, Nikola president and CEO, said in a news release.

Pasterick also helped execute Nikola’s SPAC merger. She has been responsible for the company’s overall financial operations, including accounting, reporting, transactional finance and manufacturing finance.

Related articles:

How dire are electric truck maker Nikola’s finances?

Nikola CFO: Milton’s statements ‘could be inaccurate or exaggerated’

Nikola ‘going concern’ filing language suggests short financial runway

Click for more FreightWaves articles by Alan Adler.

The post Amid financial peril, Nikola changes CFO appeared first on FreightWaves.

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