Read more: Nikola maintains momentum but losses widen

The filing revealed that the hydrogen and battery-electric truck manufacturer had incurred net losses of $784.2m and $690.4m for the years ended December 31, 2022, and 2021 respectively, accumulating a deficit of around $2bn from the inception of the company.

Nikola wrote, “We are an early stage company with a history of losses, expect to incur significant expenses and continuing losses for the foreseeable future.”

Admitting it believes the company will continue to incur operating and net losses until it can generate significant margin from its trucks, Nikola said through its own ASC 205-40 analysis, “there is substantial doubt that we will have sufficient funds to satisfy our obligations through the next twelve months from the date of issuance of this Annual Report on Form 10-K.”

Nikola has however said that it has secured and intends to employ various strategies to obtain the funding required for future operations, including accessing capital through an equity distribution agreement with Citi Global Market; a second common stock purchase agreement with Tumim Stone Capital; as well as the sale of additional unsecured senior convertibility notes.

Although the company warned the ability to access the above strategies is dependent on its common stock trading volumes and the market price of its common stock, “which cannot be assured.”

At close on February 28, 2023, Nikola’s common stock was valued at $2.22, which had previously reach as high $75.06 in June 2020.

FreightWaves on February 26 reported that in an interview with the specialist publication, Kim Brady, Chief Financial Officer of Nikola, dismissed the concerns in the SEC filing as “accounting language” – saying that with $326m in cash and three potential sources to raise capital, Nikola is in “better shape” than it was at the end of 2021.

Among an extensive list of financial warnings for investors, the SEC filing stated that Nikola, “face[s] risks and uncertainties related to litigation, regulatory actions and government investigations and inquiries,” adding the company is subject to and may in the future become party to other “claims, suits, regulatory actions, and government investigations and inquiries,” pointing to the conviction of Nikola founder and former CEO Trevor Milton.

Milton on October 14, 2022, was found guilty on one count of securities fraud and two counts of wire fraud by a Federal District Court jury for the Southern District of New York, following accusations made by Hindenburg Research that Nikola was “an intricate fraud built on dozens of lies.”

The allegations ranged from the historic business activities of Milton, to the validity of the technology at the heart of Nikola’s heavy-duty trucks. A particularly headline-grabbing claim at the heart of the allegations concerned a promotional video released in 2018 for the Nikola One concept truck, which showed the semi-truck cruising along a road at high speed.

According to Hindenburg, its investigation suggested that the video was an elaborate ruse; claiming Nikola had towed the truck to the top of a hill on a remote stretch of road and simply filmed it rolling down the hill. Nikola was forced to admit the truck was in fact ‘in motion’ through such means, while pointing to the fact that it never directly said the truck was in motion of its own powertrain.

The report did, however, omit a number of facts – such as that the subsequent Nikola Two fuel cell truck, shown to the public in 2019, did actually work.

Read more: Three weeks that rocked Nikola Corporation

The disgraced former CEO is expected to be sentenced on June 21, 2023.

But let’s get back to the company itself. In its filing it said, “We have cooperated, and will continue to cooperate, with these and other regulatory or governmental requests. We have incurred significant expenses as a result of the regulatory and legal matters relating to the short-seller article. The total cost associated with these matters will depend on many factors, including the duration of these matters and any related finding.”

By order on December 21, 2021, Nikola and the SEC reached a settlement arising out of the SEC’s investigation of Nikola, which without admitting or denying the SEC’s findings, the company, “agreed to cease and desist from future violations of the Exchange Act, and Rules 10b-5 and 13a-15(a) thereunder and Section 17(a) of the Securities Act of 1933, or the Securities Act; to certain voluntary undertakings; and to pay a $125m civil penalty.”