COOLIDGE — Nikola Motor Co. has been in negotiations to pay $125 million in accrued liabilities to settle fraud allegations brought by the U.S. Securities and Exchange Commission, the company announced Thursday.
The SEC has investigated Nikola regarding allegations that the company misled investors.
The company expects that, if approved, the resolution would include a $125 million civil penalty paid in installments over time, the company said Thursday during its quarterly report.
The press release stated the final resolution of this matter is subject to documentation satisfactory to all the parties, and completion of any settlement is contingent on a vote of the commissioners of the SEC.
Nikola also announced it would seek reimbursement from its founder, Trevor Milton, who resigned in September and faces a charge from the SEC for violations of securities law as well as a criminal indictment filed by the U.S. Attorney’s Office for two counts of securities fraud and one count of wire fraud.
Milton’s decision to resign from the Nikola board came on the heels of fraud allegations made by short seller Hindenburg Research, sparking investigations from the SEC and, according to the Financial Times, the U.S. Justice Department.
Nikola reported a total loss of $271,825 in the third quarter with a net loss of $267,577.
Mark Russell, Nikola’s chief executive officer, said progress has continued in validating the Nikola Tre BEV in preparation for public road release in December.
“Validation of the Nikola Tre BEV is progressing, with trucks now being test-driven and tested on public roads,” Russell said. “We also formally inaugurated our joint venture manufacturing facility in Ulm, Germany, and entered into additional strategic partnerships to advance our hydrogen refueling ecosystem with TC Energy and OPAL Fuels.”
As of Thursday, he said, Nikola had completed eight gamma compact trucks and have begun building pre-series trucks at its Coolidge plant and continues to work steadfastly toward its commitment to deliver up to 25 trucks to dealers and customers by December 2021.
The trucks, he said, will haul customer loads, gain real-world mileage accumulation and in turn result in additional orders for 2022 volume and beyond.
Russell said Nikola has begun its Tre BEV pre-series builds in Coolidge. Trucks are on the assembly line and in process. As it builds its pre-series trucks, the company is concurrently expanding the Phase 1 assembly expansion area to enable its total production capacity in 2022 of 2,400 trucks per year on two shifts.
Phase 1 is expected to be completed in January 2022, and the construction of Phase 2 will begin immediately after that.
Phase 2 is expected to be completed in early 2023, at which time its assembly hall will be fully built out with an installed process capacity of 20,000 units per year. The facility will be capable of building the Nikola Tre BEV and FCEV trucks on the same line, and also assembling the Bosch fuel-cell modules, the company said.
ELEVEN MILE CORNER — Few people attended Salt River Project's open house last week at the Pinal Fairgrounds and Event Center on expansion of an SRP power plant.
SRP put up placards at the open house Nov. 3 to show the public what the expansion of the power plant will entail.
The proposed expansion project, according to SRP, is needed to meet the significant near-term increase in energy needs in SRP’s service territory, mainly in the Valley, which is among the fastest growing regions in the nation.
Officials from SRP, the city of Coolidge and Pinal County attended the open house and each one said they had yet to receive any negative feedback on the expansion from residents, especially those living in the unincorporated community of Randolph, near where the SRP plant is located.
At the open house SRP officials said the expansion would more than double the existing plant’s power. Currently, the plant can produce 600 megawatts of electricity. If the expansion is approved it would add 820 megawatts of capability, which is enough to supply power to 150,000 homes.
Pinal County Supervisor Kevin Cavanaugh, whose district includes Coolidge and Randolph, said he had not heard any concerns from residents on the proposed expansion project.
He said the reason for the expansion on East Randolph Road off of State Route 87, 5 miles east of Coolidge, is that alternative energy forms need backup.
“Randolph is unincorporated.” he said. “It’s not just a place. It’s a home for people. Families have lived there for years.”
The supervisor said that while he had not received any objections on the SRP expansion project, he had heard concerns about the impacts to health and traffic from a recycling center in the area.
"This (expansion) is needed so badly,” Cavanaugh said. “The Arizona Corporation Commission is pushing us toward wind and solar." He said the expansion of the natural gas plant can remain idle until the demand, on hot days in the summer months, is needed.
Cavanaugh said Randolph is the county’s responsibility, including adding fire hydrants and fire protection.
“We have got to preserve Randolph as a historic place and as a place people call home,” he said.
Over the next 10 years the Coolidge Unified School District would receive $31.6 million in property taxes from the plant expansion, Pinal County would get $18.5 million, Central Arizona College would receive $11.4 million and the share for the city of Coolidge would be $10.8 million.
Coolidge Economic Development Services Director Gilbert Lopez said the revenue is desirable, and Coolidge City Manager Rick Miller agreed.
“It’s a real economic benefit for all of us.” he said.
Miller said the $10.8 million could result in road improvements or any other services where right now there is little funding.
“It is a good deal,” Miller said.
The ACC will meet in March to make its decision on the expansion.
COOLIDGE — Central Arizona Valley Institute of Technology has moved one step closer to begin constructing a building for welding, construction and heavy equipment operations for students.
Both the Coolidge City Council and the CAVIT board voted separately on a lease expansion agreement of 6.5 acres more than a month ago to add the space.
The CAVIT board Wednesday approved procuring architectural and engineering services for design and construction services to include master planning, programming, site circulation, utility design and hydrology updates.
The agreement the board approved is for five years, which will be renewable each year.
CAVIT Superintendent Mike Glover explained the cost of the project will be spread out over the five years, adding the building will take a while to complete.
After CAVIT finds an architect from the request for qualifications, it will bring in a construction manager or firm, Glover said.
Glover said he has an agreement with the Casa Grande Union High School District not to take any student from that district who has interest in construction since the trade is already offered there.
When asked by board member Linda Good whether Casa Grande students would be allowed to attend CAVIT for construction if they expressed an interest, Glover said the students would be referred back to the CGUHSD, since the construction trade is being taught there.
“We will not duplicate programs,” he said. “I would refer them back to Casa Grande.”
Glover said as more and more people move into the area, they could have children who are either high school age or will be of that age someday.
“We will be ready for them,” he said, pointing out that CAVIT has many business and industry partners in a variety of career fields.
He said when CAVIT recruits students from high schools, CAVIT will send cohorts of staff to the schools and just one to two staff members to a smaller school.
“It takes a village to recruit,” he said. “Welding, construction and heavy machinery are on the books.”
He added CAVIT staff are hitting the streets and developing these programs.
Board member Marty Baca wanted to confirm that the school would partner with Central Arizona College for students wanting to go into one of the three new programs while the addition at CAVIT is being built.
Glover said construction on all projects has slowed.
“Lots of planning has been going on, and more planning will be done,” Glover said.
COOLIDGE — Every time it rains in Coolidge, city staff run around with buckets to catch the water coming in from leaks in the roof at the Coolidge police station at Arizona Boulevard and Palo Verde Avenue.
At the Nov. 8 Coolidge City Council meeting, there was a proposal and bid to fix the roof for almost $144,000, but council members wanted more assurances the roof would be fixed with no leaks once the work was completed.
The council tabled the item and requested that a roofing expert or the winning bidder come to the council in two weeks to assure them the work would be done to the city’s satisfaction.
Mayor Jon Thompson said the building and roof was always a bad design with the glass windows and water that forms on the roof and does not go anywhere.
“Other than the cost, what makes us go with where we go?” he asked.
Public Works Director Matt Rencher said the city felt this was the best option.
“The bottom line is I am (concerned). If we recoat it, and it leaks, what do we do?” he asked, adding all anyone has to do is look at the carpet and other equipment to see what has been affected by all the leaks.
“Do you think this will work?” Thompson asked Rencher. “Is the water still going to be on the roof?”
City Manager Rick Miller said the improved roof will have a membrane, which is somewhat similar to a swimming pool liner.
“It shouldn’t just be sitting up there,” Miller said of the rainwater.
Thompson said air-conditioning workers have to go on top of the roof to maintain the operations of the system.
“My concern is we spend the money, and we are no longer ahead,” Thompson said. “This is where we are at because it is a poorly constructed building. If this is about money, this is what we get.”
Miller said the new roof made of shingles would go on top of the existing roof and would have a 25-year warranty.
“It’s frustrating when you have to run around with buckets,” Miller said.
Councilman Ben Navarro said if the roof is holding water, something needs to be done and suggested the city find out how much it would cost to ensure there would be no leaks.
“We should see what it will cost to make sure it drains,” he said. “If we spend money and it still leaks, we are still out $143,000.”
Vice Mayor Steve Hudson said his preference would be to spend a little more for the work to be done right rather than having to spend another $75,000 for repairs five years later.
Miller said to do this the council would have to reject the bid, and he reiterated the roofing repairs would give the building a double screening of protection.
“Why don’t we get a roofing expert to answer our questions?” Thompson asked. “It’s a question of telling us if it is going to work."
The council also awarded a bid to Gen3 Roofing for $176,000 for roofing repairs to the Artisan Village and will utilize capital improvement funds to pay for the work.