Nikola Corp., the embattled producer of battery and hydrogen-electric trucks, has taken drastic measures to repay its debts and raise equity, including offering up to $100 million in a common stock sale. This move comes as the company continues to grapple with the aftermath of its founder, Trevor Milton, being convicted of fraud and serving a four-year prison sentence.

The fraud conviction has severely damaged Nikola's reputation, leading to a loss of investor confidence, financial troubles, and increased scrutiny of its operations. As a result, the company has been working to strengthen its financial position, but this effort will likely come at the cost of diluting existing shareholders.

According to Nikola's filings with the Securities and Exchange Commission, the company intends to use the proceeds from the $100 million sale for working capital and general corporate purposes. A significant portion of the funds will be invested in short- and medium-term financial instruments, although some may be used to "acquire or invest in a complementary business, assets or technologies."

In addition to the common stock sale, Nikola has also filed to resell up to 34.2 million convertible note shares. This move would allow noteholders to convert their debt to equity and sell the resulting shares, providing an exit strategy and access to liquidity. While this wouldn't generate any cash flow for Nikola, it would help the company tackle its debt issues.

Last week, Nikola managed to secure $65 million by selling stock to holders of its convertible notes, temporarily increasing the conversion rate for those notes until January 31, 2025. The current conversion price for noteholders is about $3.12 per share, whereas Nikola's stock opened at $1.46 per share, down nearly 10% from pre-market trading.

As Nikola works to secure cash flow, it is also making progress in reducing its debts. In the nine months ending September 30, the company recorded $656 million in total liabilities. After fully repaying its Series B-1 Notes from an agreement dated August 19, 2024, Nikola has chipped away at $39.4 million of that balance.

Despite its financial struggles, Nikola has achieved a record production and shipment of 203 trucks this year. The company aims to sell 300 to 350 of its FCEV hydrogen-electric semi trucks by the end of 2024. However, this achievement comes at a cost, with the company reporting a $481 million net loss.

The latest developments at Nikola Corp. highlight the ongoing challenges the company faces in regaining investor confidence and stabilizing its financial position. As the electric vehicle and hydrogen fuel cell markets continue to evolve, Nikola's ability to adapt and overcome its current struggles will be crucial to its long-term success.

With the company's future hanging in the balance, industry observers will be closely watching Nikola's progress in the coming months. Will the company be able to overcome its debt issues and regain its footing in the competitive electric vehicle market? Only time will tell.