Nikola Corp [NKLA] Filings

10-Q 1 nkla-20240930.htm 10-Q nkla-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38495

Nikola Corporation

(Exact Name of Registrant as Specified in Its Charter)

Delaware

82-4151153

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer
Identification No.)

4141 E Broadway Road

Phoenix, AZ

85040

(Address of principal executive offices)

(Zip Code)

(480) 581-8888

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, $0.0001 par value per share

NKLA

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has ﬁled all reports required to be ﬁled by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to ﬁle such reports), and (2) has been subject to such ﬁling requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such ﬁles). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 28, 2024, there were 60,867,055 shares of the registrant’s common stock outstanding.

NIKOLA CORPORATION

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

TABLE OF CONTENTS


		Page
Summary Risk Factors		2
PART I - FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Comprehensive Loss	6
	Condensed Consolidated Statements of Stockholders’ Equity	7
	Condensed Consolidated Statements of Cash Flows	10
	Notes to Condensed Consolidated Financial Statements	12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	48
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	65
Item 4.	Controls and Procedures	65
Item 5.	Other Information	96
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	67
Item 1A.	Risk Factors	67
Item 6.	Exhibits	97
Signatures		98

Summary of Risk Factors

Our business is subject to numerous risks and uncertainties that could affect our ability to successfully implement our business strategy and affect our financial results. You should carefully consider all of the information in this report and, in particular, the following principal risks and all of the other specific factors described in Item 1A. of this report, “Risk Factors,” before deciding whether to invest in our company.

•We have a history of losses, expect to incur significant expenses and continuing losses for the foreseeable future, and there is substantial doubt about our ability to continue as a going concern.

•We need to raise additional capital to continue as a going concern, which capital may not be available to us when we need it. If we cannot raise additional capital when needed, our operations and prospects will be negatively affected.

•We may be unable to adequately control the costs associated with our operations.

•Our business model has yet to be tested and any failure to commercialize our strategic plans would have an adverse effect on our operating results and business, harm our reputation and could result in substantial liabilities that exceed our resources.

•Our limited operating history makes evaluating our business and future prospects difficult and may increase the risk of your investment.

•Our success is dependent upon the trucking market's willingness to adopt hydrogen-electric ("FCEV") trucks and battery-electric ("BEV") trucks.

•Material impairment of indefinite or long-lived assets may adversely impact our results of operations.

•The unavailability, reduction or elimination of government and economic incentives could have a material adverse effect on our business, prospects, financial condition and operating results.

•If we fail to manage our future growth effectively, we may not be able to market and sell our vehicles successfully.

•We may face legal challenges in one or more states attempting to sell directly to fleets or end users, which could materially and adversely affect our costs.

•We face risks and uncertainties related to litigation, regulatory actions and government investigations and inquiries.

•Product recalls have and may in the future materially and adversely affect our business, prospects, operating results and financial condition.

•Our success will depend on our ability to economically manufacture our trucks at scale and establish a hydrogen fueling ecosystem to meet our customers’ business needs, and our ability to develop and manufacture trucks of sufficient quality and appeal to end user fleets on schedule and at scale.

•We may experience significant delays in the design, validation, and manufacture of our trucks, which could harm our business and prospects.

•Increases in costs, disruption of supply or shortage of components and raw materials could harm our business.

•We may not be able to source the hydrogen needed to establish our planned hydrogen fueling solutions in sufficient volumes or at favorable prices, or at all, or sell hydrogen to customers at prices at or above our cost.

•We may face challenges related to perceptions of safety for commercial electric vehicles, especially if adverse events or accidents occur that are linked to the quality or safety of commercial electric vehicles.

•We may not have sufficient cash flow from our business to pay our substantial debt, and we may not be able to refinance or restructure our debt.

•We identified a material weakness in our internal control over financial reporting, and have identified other material weaknesses in the past. If we are unable to remediate these material weaknesses, or if we experience additional material weaknesses or other deficiencies in the future or otherwise fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately or timely report our financial results.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

NIKOLA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)


	September 30,		December 31,
	2024		2023
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	198,301	$	464,715
Restricted cash and cash equivalents	3,374		1,224
Accounts receivable, net	51,773		17,974
Inventory	76,076		62,588

Prepaid expenses and other current assets	61,996		25,911
Total current assets	391,520		572,412
Restricted cash and cash equivalents	16,086		28,026
Long-term deposits	17,256		14,954

Property, plant and equipment, net	490,244		503,416
Intangible assets, net	52,130		85,860
Investment in affiliate	56,197		57,062
Goodwill	—		5,238

Other assets	12,610		7,889
Total assets	$	1,036,043	$	1,274,857
Liabilities and stockholders' equity
Current liabilities
Accounts payable	$	57,161	$	44,133
Accrued expenses and other current liabilities	205,508		207,022
Debt and finance lease liabilities, current (including $63.2 million and $0 measured at fair value, respectively)	73,111		8,950
Total current liabilities	335,780		260,105
Long-term debt and finance lease liabilities, net of current portion	270,018		269,279
Operating lease liabilities	6,806		4,765


Other long-term liabilities	44,193		21,534

Total liabilities	656,797		555,683
Commitments and contingencies (Note 11)
Stockholders' equity
Preferred stock, $0.0001 par value, 150,000,000 shares authorized, no shares issued and outstanding as of September 30, 2024 and December 31, 2023	—		—
Common stock, $0.0001 par value, 1,000,000,000 and 1,600,000,000 shares authorized as of September 30, 2024 and December 31, 2023, respectively, 55,283,396 and 44,336,100 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively(1)	6		4
Additional paid-in capital	3,931,702		3,790,401
Accumulated deficit	(3,552,246)		(3,071,069)
Accumulated other comprehensive loss	(216)		(162)
Total stockholders' equity	379,246		719,174
Total liabilities and stockholders' equity	$	1,036,043	$	1,274,857

(1) Shares issued and outstanding have been adjusted to reflect the one-for-thirty (1-for-30) reverse stock split that became effective on June 24, 2024. See Note 1, Basis of Presentation.

See accompanying notes to the condensed consolidated financial statements.

NIKOLA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenues:
Truck sales	$	24,847	$	(2,368)	$	61,008	$	19,693
Service and other	334		636		2,989		4,614
Total revenues	25,181		(1,732)		63,997		24,307
Cost of revenues:
Truck sales	82,205		122,679		222,946		195,902
Service and other	4,919		1,092		15,295		4,236
Total cost of revenues	87,124		123,771		238,241		200,138
Gross loss	(61,943)		(125,503)		(174,244)		(175,831)
Operating expenses:
Research and development	41,800		41,966		121,458		168,286
Selling, general, and administrative	41,629		57,982		126,157		159,443
Impairment expense	33,419		—		33,419		—
Loss on supplier deposits	—		716		—		18,433
Total operating expenses	116,848		100,664		281,034		346,162
Loss from operations	(178,791)		(226,167)		(455,278)		(521,993)
Other income (expense):
Interest expense, net	(10,875)		(52,680)		(17,094)		(71,262)


Gain on divestiture of affiliate	—		—		—		70,849
Loss on debt extinguishment	(871)		—		(3,184)		(20,362)
Other expense, net	(9,417)		(146,654)		(4,664)		(151,969)
Loss before income taxes and equity in net profit (loss) of affiliates	(199,954)		(425,501)		(480,220)		(694,737)
Income tax expense	—		1		92		1
Loss before equity in net profit (loss) of affiliates	(199,954)		(425,502)		(480,312)		(694,738)
Equity in net profit (loss) of affiliates	173		(262)		(865)		(16,287)
Net loss from continuing operations	(199,781)		(425,764)		(481,177)		(711,025)
Discontinued operations:
Loss from discontinued operations	—		—		—		(76,726)
Loss from deconsolidation of discontinued operations	—		—		—		(24,935)
Net loss from discontinued operations	—		—		—		(101,661)
Net loss	$	(199,781)	$	(425,764)	$	(481,177)	$	(812,686)

Basic and diluted net loss per share (1):
Net loss from continuing operations	$	(3.89)	$	(14.90)	$	(10.12)	$	(30.20)
Net loss from discontinued operations	$	—	$	—	$	—	$	(4.32)
Net loss	$	(3.89)	$	(14.90)	$	(10.12)	$	(34.52)

Weighted-average shares outstanding, basic and diluted(1)	51,388,962		28,573,800		47,553,460		23,544,174

(1) Amounts have been adjusted to reflect the one-for-thirty (1-for-30) reverse stock split that became effective on June 24, 2024. See Note 1, Basis of Presentation.

See accompanying notes to the condensed consolidated financial statements.

NIKOLA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net loss	$	(199,781)	$	(425,764)	$	(481,177)	$	(812,686)
Other comprehensive income (loss):
Foreign currency translation adjustment, net of tax	(195)		145		(54)		1,629
Comprehensive loss	$	(199,976)	$	(425,619)	$	(481,231)	$	(811,057)

See accompanying notes to the condensed consolidated financial statements.

NIKOLA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)


	Three Months Ended September 30, 2024
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
	Shares	Amount
Balance as of June 30, 2024	48,473,984	$	5	$	3,876,034	$	(3,352,465)	$	(21)	$	523,553
Issuance of shares for RSU awards	94,722	—		—		—		—		—
Common stock issued for conversions of 8.25% Convertible Notes	9,257	—		75		—		—		75
Common stock issued for conversions of Senior Convertible Notes	4,600,695	1		26,185		—		—		26,186
Common stock issued under Equity Distribution Agreement, net	2,104,738	—		20,807		—		—		20,807
Stock-based compensation	—	—		8,601		—		—		8,601
Net loss	—	—		—		(199,781)		—		(199,781)
Other comprehensive loss	—	—		—		—		(195)		(195)
Balance as of September 30, 2024	55,283,396	$	6	$	3,931,702	$	(3,552,246)	$	(216)	$	379,246


	Nine Months Ended September 30, 2024
	Common Stock(1)			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
	Shares	Amount
Balance as of December 31, 2023	44,336,100	$	4	$	3,790,401	$	(3,071,069)	$	(162)	$	719,174
Issuance of shares for RSU awards	354,408	—		—		—		—		—
Common stock issued for conversions of 8.25% Convertible Notes	733,331	—		18,112		—		—		18,112
Common stock issued for conversions of Senior Convertible Notes	4,600,695	1		26,185		—		—		26,186
Common stock issued under Equity Distribution Agreement, net	5,258,862	1		71,667		—		—		71,668
Stock-based compensation	—	—		25,337		—		—		25,337
Net loss	—	—		—		(481,177)		—		(481,177)
Other comprehensive loss	—	—		—		—		(54)		(54)
Balance as of September 30, 2024	55,283,396	$	6	$	3,931,702	$	(3,552,246)	$	(216)	$	379,246

(1) Amounts have been adjusted to reflect the one-for-thirty (1-for-30) reverse stock split that became effective on June 24, 2024. See Note 1, Basis of Presentation.

See accompanying notes to the condensed consolidated financial statements.


	Three Months Ended September 30, 2023
	Common Stock(1)			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
	Shares	Amount
Balance as of June 30, 2023	25,643,344	$	3	$	2,944,578	$	(2,421,772)	$	(93)	$	522,716
Exercise of stock options	198,909	—		6,353		—		—		6,353
Issuance of shares for RSU awards	104,770	—		—		—		—		—

Common stock issued under Equity Distribution Agreement, net	922,096	—		53,139		—		—		53,139
Issuance of common stock upon conversion of Senior Convertible Notes	4,470,054	—		139,250		—		—		139,250
Common stock issued for conversion of April 2023 Toggle Convertible Notes	2,415,293	—		115,152		—		—		115,152
Common stock received for contingent stock consideration	(686,667)	—		(2)		(69,937)		—		(69,939)
Reclassification of conversion features embedded in Toggle Convertible Notes to equity	—	—		241,851		—		—		241,851
Reclassification of share-based payment awards from liability to equity	—	—		20,992		—		—		20,992


Reclassification of share-based payment awards from equity to liability	—	—		(8,395)		—		—		(8,395)
Stock-based compensation	—	—		8,068		—		—		8,068
Net loss	—	—		—		(425,764)		—		(425,764)
Other comprehensive income	—	—		—		—		145		145
Balance as of September 30, 2023	33,067,799	$	3	$	3,520,986	$	(2,917,473)	$	52	$	603,568

(1) Amounts have been adjusted to reflect the one-for-thirty (1-for-30) reverse stock split that became effective on June 24, 2024. See Note 1, Basis of Presentation.

See accompanying notes to the condensed consolidated financial statements.


	Nine Months Ended September 30, 2023
	Common Stock(1)			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
	Shares	Amount
Balance as of December 31, 2022	17,097,850	$	2	$	2,562,904	$	(2,034,850)	$	(1,577)	$	526,479
Exercise of stock options	224,121	—		7,155		—		—		7,155
Issuance of shares for RSU awards	363,858	—		—		—		—		—
Common stock issued under Tumim Purchase Agreements	1,073,726	—		67,587		—		—		67,587
Common stock issued under Equity Distribution Agreement, net	2,223,015	—		115,593		—		—		115,593
Issuance of common stock upon conversion of Senior Convertible Notes	7,380,412	—		246,431		—		—		246,431
Common stock issued in public offering	997,024	—		32,244		—		—		32,244
Common stock issued in registered direct offering	1,979,167	1		63,155		—		—		63,156
Common stock issued for conversion of April 2023 Toggle Convertible Notes	2,415,293			115,152		—		—		115,152
Common stock received for contingent stock consideration	(686,667)	—		(2)		(69,937)		—		(69,939)
Reclassification of conversion features embedded in Toggle Convertible Notes to equity	—	—		241,851		—		—		241,851
Reclassification of share-based payment awards from liability to equity	—	—		20,992		—		—		20,992
Reclassification of share-based payment awards from equity to liability	—	—		(10,401)		—		—		(10,401)
Stock-based compensation	—	—		58,325		—		—		58,325
Net loss	—	—		—		(812,686)		—		(812,686)
Other comprehensive income	—	—		—		—		1,629		1,629
Balance as of September 30, 2023	33,067,799	$	3	$	3,520,986	$	(2,917,473)	$	52	$	603,568

(1) Amounts have been adjusted to reflect the one-for-thirty (1-for-30) reverse stock split that became effective on June 24, 2024. See Note 1, Basis of Presentation.

See accompanying notes to the condensed consolidated financial statements.

NIKOLA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Nine Months Ended September 30,
	2024		2023
Cash flows from operating activities
Net loss	$	(481,177)	$	(812,686)
Less: Loss from discontinued operations	—		(101,661)
Loss from continuing operations	(481,177)		(711,025)
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities:
Depreciation and amortization	33,408		28,758
Stock-based compensation	25,337		68,916
Equity in net loss of affiliates	865		16,287
Revaluation of financial instruments	6,284		195,132
Revaluation of contingent stock consideration	—		(43,981)
Inventory write-downs	56,587		64,500
Non-cash interest expense	11,906		72,846
Loss on supplier deposits	—		18,433
Gain on divestiture of affiliate	—		(70,849)
Loss on debt extinguishment	3,184		20,362
Loss on disposal of assets	2,921		—
Impairment expense	33,419		—
Other non-cash activity	5,674		3,888
Changes in operating assets and liabilities:
Accounts receivable, net	(33,799)		20,932
Inventory	(71,085)		(9,983)
Prepaid expenses and other current assets	(14,017)		(48,332)
Other assets	(1,595)		(2,384)
Accounts payable, accrued expenses and other current liabilities	(3,478)		(1,672)
Long-term deposits	(262)		(1,377)
Operating lease liabilities	(2,769)		(1,191)
Other long-term liabilities	29,064		2,316
Net cash used in operating activities	(399,533)		(378,424)
Cash flows from investing activities
Purchases and deposits of property, plant and equipment	(43,740)		(108,409)
Proceeds from the sale of assets	21,398		20,742
Divestiture of affiliate	—		35,000
Payments to Assignee	—		(2,725)
Investments in affiliate	—		(250)
Net cash used in investing activities	(22,342)		(55,642)

See accompanying notes to the condensed consolidated financial statements.


Cash flows from financing activities
Proceeds from the exercise of stock options	—		7,393
Proceeds from issuance of shares under the Tumim Purchase Agreements	—		67,587
Proceeds from registered direct offering, net of underwriter's discount	—		63,456
Proceeds from public offering, net of underwriter's discount	—		32,244
Proceeds from issuance of common stock under Equity Distribution Agreement, net of commissions and other fees paid	73,464		115,027
Proceeds from issuance of convertible notes	80,000		217,075

Proceeds from issuance of financing obligation, net of issuance costs	—		53,548
Proceeds from insurance premium financing	4,598		5,223
Repayment of debt and promissory notes	(522)		(45,287)
Payment for Coupon Make-Whole Premium	(4,579)		—
Payments on insurance premium financing	(3,661)		(3,550)
Payments on finance lease liabilities and financing obligations	(3,549)		(459)
Payments for issuance costs	(80)		—
Net cash provided by financing activities	145,671		512,257
Net increase (decrease) in cash and cash equivalents, including restricted cash and cash equivalents	(276,204)		78,191
Cash and cash equivalents, including restricted cash and cash equivalents, beginning of period	493,965		313,909
Cash and cash equivalents, including restricted cash and cash equivalents, end of period	$	217,761	$	392,100

Cash flows from discontinued operations:
Operating activities	$	—	$	(4,964)
Investing activities	—		(1,804)
Financing activities	—		(572)
Net cash used in discontinued operations	$	—	$	(7,340)

Supplementary cash flow disclosures:
Cash paid for interest	$	13,859	$	5,561
Cash interest received	$	12,141	$	7,153
Supplementary disclosures for noncash investing and financing activities:
Conversion of Senior Convertible Notes into common stock	$	26,186	$	246,431
Conversion of 8.25% Convertible Notes	$	18,112	$	—
Purchases of property, plant and equipment included in liabilities	$	12,311	$	13,551
PIK interest	$	11,135	$	16,263
Leased assets obtained in exchange for new finance lease liabilities	$	4,407	$	10,982
Accrued commissions under Equity Distribution Agreement	$	1,844	$	1,114
Reclassification of conversion features embedded in Toggle Convertible Notes to equity	$	—	$	241,851
Conversion of April 2023 Toggle Convertible Notes	$	—	$	115,152
Accrued issuance costs	$	—	$	300
Contingent stock consideration for divestiture of affiliate	$	—	$	25,956
Embedded derivative liability bifurcated from April 2023 Toggle Convertible Notes	$	—	$	21,180
Reclassification from liability to equity for certain share-based awards	$	—	$	20,992



Reclassification from equity to liability for certain share-based awards	$	—	$	10,401

See accompanying notes to the condensed consolidated financial statements.

NIKOLA CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.BASIS OF PRESENTATION

(a)Overview

Nikola Corporation (‘‘Nikola’’ or the ‘‘Company’’) is a designer and manufacturer of heavy-duty commercial hydrogen-electric ("FCEV") and battery-electric ("BEV") trucks and energy infrastructure solutions.

(b)Unaudited Condensed Consolidated Financial Statements

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and pursuant to the regulations of the U.S. Securities and Exchange Commission (“SEC”). The unaudited financial information reflects, in the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair statement of the Company's financial position, results of operations and cash flows for the periods indicated. The results reported for the interim period presented are not necessarily indicative of results that may be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, as amended.

Certain prior period balances have been reclassified to conform to the current period presentation in the condensed consolidated financial statements and the accompanying notes. All dollar amounts are in thousands, unless otherwise noted.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Pre-production activities for Tre FCEV trucks, including manufacturing readiness, process validation, prototype builds, freight, and inventory write-downs were recorded as research and development activities on the Company's condensed consolidated statements of operations. Commensurate with the start of production, manufacturing costs, including labor and overhead, facility costs, and inventory-related expenses related to the Tre FCEV trucks, are recorded in cost of revenues beginning in the fourth quarter of 2023.

On June 30, 2023, pursuant to a general assignment (the “Assignment”), the Company transferred ownership of its subsidiary, Romeo Power, Inc.'s ("Romeo") right, title and interest in and to all of its tangible and intangible assets, subject to certain agreed upon exclusions (collectively, the “Assets”) to SG Service Co., LLC, in its sole and limited capacity as Assignee for the Benefit of Creditors of Romeo (“Assignee”), and also designated Assignee to act as the assignee for the benefit of creditors of Romeo, such that, as of June 30, 2023, Assignee succeeded to all of Romeo’s right, title and interest in and to the Assets. The results of operations of Romeo are reported as discontinued operations for the three and nine months ended September 30, 2023. See Note 9, Deconsolidation of Subsidiary, for additional information. All references made to financial data in this Quarterly Report on Form 10-Q are to the Company's continuing operations, unless otherwise specifically noted.

On June 24, 2024, the Company effected a one-for-thirty (1-for-30) reverse stock split of its common stock (the “Reverse Stock Split”). The Reverse Stock Split was approved by stockholders at the Company's annual meeting of stockholders on June 5, 2024, and on June 13, 2024, the Company's board of directors approved the Reverse Stock Split. Contemporaneously with the Reverse Stock Split, the number of authorized shares of common stock was reduced from 1,600,000,000 to 1,000,000,000. All references to common stock, warrants to purchase common stock, options to purchase common stock, restricted stock units, share data, per share data, conversion rates and prices with respect to convertible notes and related information contained in the unaudited condensed consolidated financial statements have been retroactively adjusted to reflect the effect of the Reverse Stock Split for all periods presented.

(c)Funding Risks and Going Concern

In accordance with Accounting Standards Codification ("ASC") 205-40, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern ("ASC 205-40") the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued.

NIKOLA CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

As an early-stage growth company, the Company's ability to access capital is critical. Until the Company can generate sufficient revenue to cover its operating expenses, working capital and capital expenditures, the Company will need to raise additional capital. Additional stock financing may not be available on favorable terms, or at all, and would be dilutive to current stockholders. Debt financing, if available, may involve restrictive covenants and dilutive financing instruments.

The Company intends to employ various strategies to obtain the required funding for future operations such as continuing to access capital through the amended and restated equity distribution agreement with Citigroup Global Markets Inc. ("Citi"), as sales agent. See Note 7, Capital Structure. However, the ability to access the amended and restated equity distribution agreement is dependent on the market price of the Company's common stock and trading volumes, which cannot be assured, and as a result cannot be included as a source of liquidity for the Company’s ASC 205-40 analysis.

If capital is not available to the Company when, and in the amounts needed, the Company would be required to delay, scale back, or abandon some or all of its development programs and operations, which could materially harm the Company’s business, financial condition and results of operations. The result of the Company’s ASC 205-40 analysis, due to uncertainties discussed above, is that there is substantial doubt about the Company’s ability to continue as a going concern through the next twelve months from the date of issuance of these condensed consolidated financial statements. In addition, the amount of capital available under the equity distribution agreement is not sufficient to meet the Company's capital requirements.

These financial statements have been prepared by management in accordance with GAAP and this basis assumes that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. These financial statements do not include any adjustments that may result from the outcome of this uncertainty.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)Cash, Cash Equivalents and Restricted Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a remaining maturity of three months or less, including money market funds, to be cash equivalents. As of September 30, 2024 and December 31, 2023, the Company had $198.3 million and $464.7 million of cash and cash equivalents, respectively. Cash equivalents and restricted cash equivalents included $27.8 million and $29.8 million of highly liquid investments as of September 30, 2024 and December 31, 2023, respectively.

As of September 30, 2024 and December 31, 2023, the Company had $19.5 million and $29.3 million, respectively, in current and non-current restricted cash. Restricted cash represents cash that is restricted as to withdrawal or usage and consists of securitization of the Company's letters of credit. See Note 6, Debt and Finance Lease Liabilities, for additional details.

The reconciliation of cash and cash equivalents and restricted cash and cash equivalents to amounts presented in the condensed consolidated statements of cash flows are as follows:


	As of
	September 30, 2024		December 31, 2023		September 30, 2023
Cash and cash equivalents	$	198,301	$	464,715	$	362,850
Restricted cash and cash equivalents – current	3,374		1,224		1,224
Restricted cash and cash equivalents – non-current	16,086		28,026		28,026
Cash, cash equivalents and restricted cash and cash equivalents	$	217,761	$	493,965	$	392,100

NIKOLA CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(b)Fair Value of Financial Instruments

The carrying value and fair value of the Company’s financial instruments are as follows:


	As of September 30, 2024
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents – money market	$	27,825	$	—	$	—	$	27,825


Liabilities



Senior Convertible Notes	—		—		63,158		63,158


	As of December 31, 2023
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents – money market	$	29,839	$	—	$	—	$	29,839



Liabilities
Derivative liability	$	—	$	—	$	8,871	$	8,871

Embedded conversion features derivative liabilities

In June 2022, the Company completed a private placement of $200.0 million aggregate principal amount of unsecured 8.00% / 11.00% convertible senior paid in kind ("PIK") toggle notes (the “June 2022 Toggle Convertible Notes”). On April 11, 2023, the Company completed an exchange (the "Exchange") of $100.0 million aggregate principal amount of the Company's existing June 2022 Toggle Convertible Notes for the issuance of $100.0 million aggregate principal amount of 8.00% / 11.00% Series B convertible senior PIK toggle notes (the "April 2023 Toggle Convertible Notes"). The April 2023 Toggle Convertible Notes were issued pursuant to an indenture dated as of April 11, 2023 (the "April 2023 Toggle Convertible Notes Indenture").

Additionally, in June 2023, the Company completed a private placement of $11.0 million aggregate principal amount of unsecured 8.00% / 8.00% Series C convertible senior PIK toggle notes (the "June 2023 Toggle Convertible Notes"). The June 2023 Toggle Convertible Notes were issued pursuant to an indenture dated as of June 23, 2023 (the "June 2023 Toggle Convertible Notes Indenture").

The April 2023 Toggle Convertible Notes Indenture and June 2023 Toggle Convertible Notes Indenture, among other things, limited conversion of the notes in certain instances until the earlier to occur of (x) an increase in the number of authorized shares in an amount sufficient to, among other things, allow for the issuance of common stock underlying the notes and (y) October 11, 2023, and provided that the Company would elect to settle conversions of the notes in cash until such increase in the number of authorized shares occurred, and the Company obtained the stockholder approval contemplated by Rule 5635 of the Nasdaq listing rules ("Nasdaq Rule 5635").

The conversion features embedded to the April 2023 Toggle Convertible Notes and June 2023 Toggle Convertible Notes were bifurcated and recognized separately at fair value due to the temporary requirement to settle conversions in cash, in certain instances, until stockholder approval as contemplated by Nasdaq Rule 5635 was obtained to increase the number of authorized shares. Upon the Exchange, the Company recognized $21.2 million for the embedded conversion features as a derivative liability within accrued expenses and other current liabilities on the condensed consolidated balance sheets.

During the third quarter of 2023, and commensurate with stockholder approval to increase the number of authorized shares on August 3, 2023, the Company reassessed the conversion features bifurcated from the April 2023 Toggle Convertible Notes and June 2023 Toggle Convertible Notes. As of August 3, 2023, the conversion features met all equity classification criteria, and as a result, the derivative liabilities were remeasured as of August 3, 2023, and reclassified from accrued expenses and other current liabilities to additional paid-in capital on the condensed consolidated balance sheets. Changes in the fair value

NIKOLA CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

of the derivative liabilities are recorded within other expense, net on the condensed consolidated statements of operations. During the three and nine months ended September 30, 2023, the change in fair value of the derivative liability was as follows:


	Three Months Ended		Nine Months Ended
	September 30, 2023		September 30, 2023
Estimated fair value - beginning of period	$	29,340	$	—
Recognition of derivative liability	—		21,180
Change in estimated fair value	212,511		220,671
Reclassification to equity	(241,851)		(241,851)
Estimated fair value - end of period	$	—	$	—

The fair value of the conversion features was estimated by applying a with-and-without approach to a binomial lattice model. The following reflects the inputs and assumptions used:


	Three Months Ended September 30, 2023	Nine Months Ended September 30, 2023

Stock price	$102.00	$32.70 - $102.00
Conversion price	$43.68 - $44.48	$43.68 - $44.48
Risk free rate	4.58%	3.76% - 4.58%
Equity volatility	47.5%	47.5% - 60%
Expected dividend yield	—%	—%
Credit spread	14.9%	14.9% - 20.1%

Additionally, on December 12, 2023, the Company consummated an underwritten public offering of $175.0 million aggregate principal amount of the Company’s 8.25% Green Convertible Senior Notes due 2026 (the “8.25% Convertible Notes”). The 8.25% Convertible Notes were issued pursuant to, and are governed by, an indenture, dated as of December 12, 2023, between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), as supplemented by a first supplemental indenture, dated as of December 12, 2023, between the Company and the Trustee.

The conversion features embedded in the 8.25% Convertible Notes met the criteria to be separated from the host contract and recognized separately at fair value. The derivative is measured both initially and in subsequent periods at fair value, with changes in fair value recognized in other expense, net on the condensed consolidated statements of operations. As of the issuance of the 8.25% Convertible Notes, the Company recognized $47.3 million for the embedded conversion features as a derivative liability within accrued expenses and other current liabilities on the condensed consolidated balance sheets. The change in fair value of the derivative liability for the nine months ended September 30, 2024 was as follows:


	Nine Months Ended
	September 30, 2024
Estimated fair value - beginning of period	$	8,871

Change in estimated fair value	(2,184)
Settlement of derivative liability for conversions	(6,687)
Estimated fair value - end of period	$	—

The fair value of the derivative liability was immaterial during the three months ended September 30, 2024.

NIKOLA CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The fair value of the conversion features was estimated by applying a with-and-without approach. The following reflects the ranges of inputs and assumptions used:


												Nine Months Ended
												September 30, 2024
Stock price												$7.40 - $31.20
Conversion price												$27.00
Risk free rate												4.10% - 5.47%
Credit spread												14.08% - 15.18%

Liability Classified Awards

During the second and third quarters of 2023, the Company reclassified certain share-based payment awards from equity to liabilities that would require cash settlement upon distribution or exercise. The fair value of these awards was determined based on the closing price of the Company's stock or a Black-Scholes model as of the measurement date and as of the end of each reporting period. Changes in the fair value of the liabilities were recognized as compensation cost over the requisite service period.

As of August 3, 2023, the share-based payment awards classified as liabilities no longer required cash settlement upon distribution or exercise. The Company reclassified the share-based payment awards into additional paid in capital on the Company's condensed consolidated balance sheets at their fair value. Changes in the fair value of liability classified awards during the three and nine months ended September 30, 2023, were as follows:


	Three Months Ended		Nine Months Ended
	September 30, 2023		September 30, 2023
Liability classified awards - beginning of the period	$	2,006	$	—
Reclassification of share-based payment awards to liability	8,395		10,401
Change in fair value	10,591		10,591
Reclassification of share-based payment awards to equity	(20,992)		(20,992)
Liability classified awards - end of the period	$	—	$	—

(c)Revenue Recognition

Truck sales

Truck sales consist of revenue recognized on the sales of the Company's trucks. The sale of a truck is generally recognized as a single performance obligation at the point in time when control is transferred to the customer, which has historically been only the Company's dealers. Control is generally deemed transferred when the product is picked up by the carrier and the dealer can direct the product's use and obtain substantially all of the remaining benefits from the product. The Company may offer certain after-market upgrades at the request of dealers. If a contract contains more than one distinct performance obligation, the transaction price is allocated to each performance obligation based on the standalone selling price of each performance obligation. In accordance with state law and the Company's dealer agreements, the Company may be required to repurchase dealer inventory in the event a dealer agreement is terminated, and accounts for these as sales with right of return.

The Company estimates a reserve for returns based on average historical returns, including in the event of dealer agreement terminations. Management believes that the estimate is an accurate reflection of expected returns, but actual return activity may vary from estimates. Accrued returns were approximately $4.4 million and $0.7 million as of September 30, 2024 and December 31, 2023, respectively, and are generally reflected in accrued expenses and other current liabilities on the condensed consolidated balance sheets. If the reserve applies to trucks that have an outstanding accounts receivable balance, the reserve is reflected as a reduction of accounts receivable, net.

NIKOLA CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Revenue is recognized based on the transaction price, which is measured as the amount of consideration that the Company expects to receive in exchange for transferring the product pursuant to the terms of the contract with its dealer. The transaction price may be adjusted, if applicable, for variable consideration, such as rebates and financing costs on floor plan arrangements, which requires the Company to make estimates for the portion of these allowances that have yet to be credited to dealers.

Payments for trucks sold are made in accordance with the Company's customary payment terms. The Company has elected an accounting policy whereby the Company does not adjust the promised amount of consideration for the effects of a significant financing component because, at contract inception, the Company expects the period between the time when the Company transfers a promised good or service to the dealer and the time when the dealer pays for that good or service will be one year or less. Sales tax collected from dealers is not considered revenue and is accrued until remitted to the taxing authorities. Shipping and handling activities occur after the dealer has obtained control of the product, thus the Company has elected to account for those expenses as fulfillment costs in cost of revenues, rather than an additional promised service.

Service and other

Service and other revenues primarily consist of sales of charging products, regulatory credits, service parts, after-market parts, service and labor, and hydrogen. Sales are generally recognized as a single performance obligation at the point in time when control is transferred to the customer. Control is generally deemed transferred when the product is delivered to the customer and the customer can direct the product's use and obtain substantially all of the remaining benefits from the asset. Payment for products sold are made in accordance with the Company's customary payment terms and the Company's contracts do not have significant financing components. Sales tax collected is not considered revenue and is accrued until remitted to the taxing authorities.

(d)Product Warranties and Recall Campaigns

Product warranty costs are recognized upon transfer of control of trucks to dealers and are estimated based on factors including the length of the warranty (generally 2 to 5 years), product costs, and product failure rates. Warranty reserves are reviewed and adjusted quarterly to ensure that accruals are adequate to meet expected future warranty obligations. Estimating future warranty costs is highly subjective and requires significant management judgment. Management believes that the accruals are adequate. However, based on the limited historical information available, it is possible that substantial additional charges may be required in future periods based on new information or changes in facts and circumstances. The Company's accrual includes estimates of the replacement costs for covered parts which is based on historical experience. This estimate could be impacted by contractual changes with third-party suppliers or the need to identify new suppliers and the engineering and design costs that would accompany such a change.

Recall campaign costs are recognized when a product recall liability is probable and related amounts are reasonably estimable. Costs are estimated based on the number of trucks to be repaired and the required repairs including engineering and development, product costs, labor rates, and shipping. Estimating the cost to repair the trucks is highly subjective and requires significant management judgment. Based on information that is currently available, management believes that the accruals are adequate. It is possible that substantial additional charges may be required in future periods based on new information, changes in facts and circumstances, availability of materials from key suppliers, and actions the Company may commit to or be required to undertake.

During the third quarter of 2023, the Company filed a voluntary recall with the National Highway Traffic Safety Administration for the Company's BEV trucks, related to issues with the existing battery pack. The Company accrued recall campaign costs of $56.7 million, of which $34.9 million has been incurred through September 30, 2024. The Company placed a temporary hold on new BEV truck shipments until its BEV truck inventory has been retrofit with alternative battery packs. See Note 11, Commitments and Contingencies, for additional information.

NIKOLA CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The change in warranty liability for the three and nine months ended September 30, 2024 and 2023 is summarized as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Accrued warranty - beginning of period	$	77,266	$	11,057	$	78,946	$	7,788
Warranties issued in period - product warranty	19,274		172		44,353		4,245
Warranties issued in period - recall campaign	—		61,848		—		61,848
Net changes in liability for pre-existing warranties	(4,936)		(1,084)		(10,658)		(1,304)
Warranty costs incurred	(14,472)		(1,665)		(35,509)		(2,249)
Accrued warranty - end of period	$	77,132	$	70,328	$	77,132	$	70,328

As of September 30, 2024, warranty accrual of $34.1 million was recorded in accrued expenses and other current liabilities and $43.0 million in other long-term liabilities on the condensed consolidated balance sheets. As of December 31, 2023, warranty accrual of $65.7 million was recorded in accrued expenses and other current liabilities and $13.2 million in other long-term liabilities on the condensed consolidated balance sheets.

(e)Segment Information

Under ASC 280, Segment Reporting, operating segments are defined as components of an enterprise where discrete financial information is available that is evaluated regularly by the chief operating decision-maker ("CODM"), in deciding how to allocate resources and in assessing performance. The Company has two components, the Truck business unit and Energy business unit. The Truck business unit is manufacturing and selling FCEV and BEV trucks that provide, or are expected to provide, environmentally friendly, cost effective solutions to the trucking sector. The Energy business unit is developing and constructing a network of hydrogen fueling stations to meet hydrogen fuel demand for the Company's customers. The Company's chief executive officer, who is also the CODM, makes decisions and manages the Company's operations as a single reporting unit, and single operating and reportable segment for purposes of allocating resources and evaluating financial performance.

(f)Goodwill

The Company records goodwill when consideration paid in a purchase acquisition exceeds the fair value of the net tangible assets and the identified intangible assets acquired. Goodwill is not amortized, but rather is tested for impairment annually or more frequently if facts and circumstances warrant a review. The Company has determined that there is a single reporting unit for the purpose of the goodwill impairment test, which is performed annually on December 31. During the three months ended September 30, 2024, the Company experienced a sustained decline in stock price and in the Company's market capitalization which represents a qualitative factor indicating the carrying value of reporting unit may not be recoverable, and thus required further impairment review pursuant to ASC 350, Goodwill and Other.

The Company performed an interim impairment review as of September 30, 2024, which indicated that the carrying value of the Company's single reporting unit was in excess of the fair value of the reporting unit. Accordingly, the Company recognized goodwill impairment of $5.2 million during the three and nine months ended September 30, 2024 within impairment expense on the condensed consolidated statement of operations, representing the difference between the carrying value and the fair value of the reporting unit, limited by the carrying amount of goodwill on the Company's condensed consolidated balance sheets. See Note 4, Goodwill and Intangible Assets, Net.

(g)Intangible Assets with Indefinite Useful Lives

The Company is required to test its intangible assets with indefinite lives for impairment annually using the guidance for indefinite-lived intangible assets in ASC 350. The Company's evaluation consists of first assessing qualitative factors to

NIKOLA CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

determine if impairment of the asset is more likely than not. If it is more likely than not that the asset is impaired, the Company determines the fair value of the asset and records an impairment charge if the carrying amount exceeds the fair value.

During the third quarter of 2024, the sustained decline in the Company's stock price and market capitalization indicated that the carrying value of the Company's indefinite lived intangible asset was more likely than not impaired. With the assistance of a third party valuation firm, the Company determined a fair value for the indefinite lived intangible asset as of September 30, 2024, by assessing if the terms of the applicable license agreement are at market. A relief from royalty valuation approach was utilized in assessing if the implied royalty rate was deemed to be at market. The relief from royalty approach is based on the assumption that, in lieu of ownership, an entity would be willing to pay a royalty in order to benefit from the use of the asset. The relief from royalty approach involves two steps: (1) estimation of a reasonable royalty rate for the asset and (2) the application of the royalty rate to a forecasted net revenue stream and discounting the resulting cash flows to determine a present value. The Company multiplied the selected royalty rate by the forecasted net revenue to calculate the cost savings (relief from royalty payment) associated with the asset.

During the three and nine months ended September 30, 2024 the Company recognized an impairment loss within impairment expense on the condensed consolidated statement of operations for $28.2 million representing the difference between the carrying value and the fair value of the Company's indefinite lived intangible asset. See Note 4, Goodwill and Intangible Assets, Net.

(h)Long-Lived Assets and Finite Lived Intangibles

The Company reviews its long-lived assets and finite lived intangibles for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The events and circumstances the Company monitors and considers include significant decreases in the market price of similar assets, significant adverse changes to the extent and manner in which the asset is used, an adverse change in legal factors or business climate, an accumulation of costs that exceed the estimated cost to acquire or develop a similar asset, and continuing losses that exceed forecasted costs. The Company assesses the recoverability of these assets by comparing the carrying amount of such assets or asset group to the future undiscounted cash flow it expects the assets or asset group to generate. The Company recognizes an impairment loss if the sum of the expected long-term undiscounted cash flows that the long-lived asset is expected to generate is less than the carrying amount of the long-lived asset being evaluated. An impairment charge would then be recognized equal to the amount by which the carrying amount exceeds the fair value of the asset.

During the third quarter of 2024, the sustained decline in the Company's stock price and market capitalization indicated that the Company's long-lived assets and finite lived intangibles may be more likely than not impaired, thus requiring a recoverability assessment under ASC 360-10, Impairment of long-lived assets to be held and used. As of September 30, 2024, the Company performed the recoverability test as described above and concluded that all asset groups were deemed recoverable and thus no impairment was recognized during the three and nine months ended September 30, 2024.

(i)Recent Accounting Pronouncements

Recently issued accounting pronouncements not yet adopted

In October 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2023-06 to clarify or improve disclosure and presentation requirements of a variety of topics, which will allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the FASB accounting standard codification with the SEC's regulations. The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated statements.

In December 2023, FASB issued ASU No. 2023-09 ("ASU 2023-09"), Income Taxes, to enhance income tax disclosures to address investor requests for more information about the tax risks and opportunities present in an entity’s worldwide operation. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 and early adoption is permitted. The Company plans to adopt ASU 2023-09 for the year ended December 31, 2025, and is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures.

NIKOLA CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3.BALANCE SHEET COMPONENTS

Inventory

Inventory consisted of the following at September 30, 2024 and December 31, 2023, respectively:


	As of
	September 30, 2024		December 31, 2023
Raw materials	$	35,112	$	32,889
Work in process	28,078		15,486

Finished goods	4,695		8,206
Service parts	8,191		6,007
Total inventory	$	76,076	$	62,588

Inventory cost is computed using standard cost, which approximates actual cost on a first-in, first-out basis. Inventories are stated at the lower of cost or net realizable value. Inventories are written down for any excess or obsolescence and when net realizable value, which is based upon estimated selling prices, is in excess of carrying value. Once inventory is written down, a new, lower cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration of or increase in that newly established cost basis.

During the third quarter of 2023, the Company wrote down $45.7 million of BEV inventory related to the existing battery packs, cells and other BEV components which were deemed excess or obsolete due to the Company's voluntary recall.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following at September 30, 2024 and December 31, 2023, respectively:


	As of
	September 30, 2024		December 31, 2023
Insurance receivables	$	17,500	$	—

Inventory deposits	16,939		4,843
Non-trade receivables	8,039		4,895
Prepaid expenses	5,715		7,573
Holdback receivable	4,869		3,655
Prepaid insurance premiums	3,890		2,148

Other current assets	2,893		1,154

Other deposits	2,151		1,643
Total prepaid expenses and other current assets	$	61,996	$	25,911

NIKOLA CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Property, Plant and Equipment, Net

Property, plant and equipment, net consisted of the following at September 30, 2024 and December 31, 2023:


	As of
	September 30, 2024		December 31, 2023
Buildings	$	240,861	$	239,918
Construction-in-progress	105,718		135,994
Equipment	83,482		67,657
Tooling	62,114		39,389
Finance lease assets	41,072		37,504
Software	8,689		8,649
Land	7,957		7,957


Other	6,871		6,409
Leasehold improvements	3,115		3,100
Demo vehicles	1,798		788


Property, plant and equipment, gross	561,677		547,365
Less: accumulated depreciation and amortization	(71,433)		(43,949)
Total property, plant and equipment, net	$	490,244	$	503,416

Construction-in-progress on the Company's condensed consolidated balance sheets as of September 30, 2024 relates primarily to the development of hydrogen infrastructure.

During the first quarter of 2024, the Company changed its accounting estimate for the expected useful life of tooling. The Company determined that straight-line depreciation with an estimated useful life of 5 years was more representative of the estimated economic lives of those assets than the consumption method. This change in estimate was applied prospectively effective for the first quarter of 2024 and resulted in an increase in depreciation expense of $2.9 million and $8.5 million for the three and nine months ended September 30, 2024, respectively. For the three and nine months ended September 30, 2024, the change in estimate resulted in an increase in net loss per share of $0.06 and $0.18, respectively.

Depreciation expense for the three months ended September 30, 2024 and 2023 was $9.9 million and $15.1 million, respectively. Depreciation expense for the nine months ended September 30, 2024 and 2023 was $27.8 million and $23.9 million, respectively.

In July 2023, the Company executed a membership interest and asset purchase agreement (the "FFI Purchase Agreement") with FFI Phoenix Hub Holdings, LLC, a wholly-owned subsidiary of Fortescue Future Industries ("FFI"). Pursuant to the terms of the FFI Purchase Agreement, FFI Phoenix Hub Holdings, LLC, acquired 100% of the interests in Phoenix Hydrogen Hub, LLC, the Company's wholly owned subsidiary holding the assets related to the Phoenix hydrogen hub project, including land and construction-in-progress. The Company sold $24.4 million of assets during the third quarter of 2023 pursuant to the first closing. The Company's proceeds are net of a $3.7 million holdback. During the first quarter of 2024, the Company completed the second closing under the terms of the FFI Purchase Agreement. The Company sold $25.1 million of assets during the first quarter of 2024 pursuant to the second closing. The Company's proceeds are net of a $3.7 million holdback. As of September 30, 2024, the Company recognized $4.9 million in prepaid and other current assets on the condensed consolidated balance sheets for the remaining holdback receivable on the first and second closings. As of December 31, 2023, the Company recognized $3.7 million in prepaid and other current assets on the consolidated balance sheets for the holdback receivable on the first closing.

NIKOLA CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following at September 30, 2024 and December 31, 2023:


			As of
			September 30, 2024

Nikola Corp [NKLA] Filings
10-Q	[2024-10-31]
10-Q	[2024-08-09]
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