SAN FRANCISCO (Reuters) - Nikola adjourned its shareholder meeting on Wednesday after failing to garner enough support for a proposal to increase the number of shares the electric truck maker is allowed to issue, delaying its prospects of raising much-needed capital.
Nikola has been urging shareholder for weeks to vote in favor of the so-called Proposal 2, saying "without these additional shares, Nikola's ability to continue its ongoing operations and objectives, including Nikola's need for capital, will be out of reach."
The company, like other electric vehicle makers, has been grappling with dwindling cash and weakening demand amid fears of a recession. It was doubling down on cutting costs to limit its cash burn that was "not sustainable", its finance chief, Stasy Pasterick, told analysts last month.
While some proposals require a majority of shares voted, Proposal 2 needs more than 50% of all outstanding shares in favor to pass.
"More than 77% of shares voted through June 6 have been in favor of Proposal 2, but more time is needed to obtain the required vote," Nikola said in a statement, adding that the meeting will reconvene on July 6.
Nikola might also execute a reverse stock split if its stock does not comply with Nasdaq's minimum bid price requirements within a certain period, CEO Michael Lohscheller said last week, after receiving a delisting notice from the bourse.
Nikola shares have dropped about 73% this year to 59 cents as of Wednesday's close, below Nasdaq's $1 threshold. Shares were down 1.7% after market.
(Reporting by Abhirup Roy in San Francisco; Editing by Lisa Shumaker)