Hindenburg Views Nikola’s Response As A Tacit Admission of Securities Fraud

Hindenburg Research Views Nikola’s Response As a Tacit Admission of Securities Fraud

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Last week, we issued a report that presented extensive evidence of a litany of material false statements made by Nikola’s Founder and Executive Chairman, Trevor Milton.

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We included 53 questions at the end of our report that we believe shareholders deserve answers to. The company promised a full point-by-point rebuttal, but then only responded to 10 of our questions.

Of those 10 responses, the company debunked nothing. Instead it either confirmed or sidestepped virtually everything we wrote about, and in some cases raised new unanswered questions.

Nikola Failed to Address 43 of our 53 Questions. Of Those It Touched On, It Largely Confirmed Our Findings or Raised New Questions

Nikola Admitted That Its Deceptive “Nikola One in Motion” Video Was, In Fact, Video of The Semi-Truck Simply Rolling Down A Hill.

The Company Says It Never Claimed the Truck Was Powering Itself, Despite Deceptive Editing and Claims That it Had “1,000 HP” With “Sports Performance”

In our report, we explained how the company released a video called “Nikola One in Motion”, which made it seem that its Nikola One semi-truck was traveling under its own power at a high rate of speed. Angles in the video were edited to make it appear as though the semi was moving on a roadway that was flat, or even uphill.

In Monday’s response, the company acknowledged that its vehicle was not functioning under its own power, and instead, was apparently simply showcasing the power of gravity. It claimed that using the term “in motion” dispelled the deceptive nature of the video.

We disagree. Beyond common sense, the company referred to the Nikola One as “the 1,000 HP, zero-emission Nikola One semi-truck” in the description of its video. Obviously, the truck can’t have 1,000 horsepower or even 1 horsepower if it doesn’t power itself.

 

On January 25, 2018, Nikola posted the same video to its corporate Facebook page.

Underneath the video are a series of comments that were answered by Nikola’s verified corporate Facebook account.

In response to inquiries about the video, the company confirmed the Nikola One had “over 1,000 HP” and “over 2,000 ft. lbs. of torque” and can handle a “7% grade, no problem”. Readers would have likely interpreted this as an ability to climb up a 7% grade hill, not roll down a very steep hill.

The company also told one person: “…wait until you drive it. Feels like a luxury car with sports performance.”

Given the public statements Nikola was making at the time, we view the company’s new admission that the Nikola One was not powered on its own in the video as a tacit admission of securities fraud.

Nikola Claims the Nikola One Semi Was Not A “Pusher” Because It Was Designed To Move Under Its Own Power Train. It Then Admits the Truck Didn’t Ever Move Using Its Own Power Train.

Reminder: Nikola and Trevor Referred to The Nikola One As “Fully Functional”, “Fully Built”, “A Real Truck” And “Not A Pusher” At Least 6 Times Between October 2016 and December 2016

As we wrote, in December 2016, the company falsely claimed at Nikola World, on video, that the Nikola One “fully functions and works…this is a real truck—this is not a pusher.” It later admitted that it was NOT fully functional to Bloomberg.

Nikola’s response yesterday completely failed to address Trevor’s false statements claiming that the truck “fully functions and works”.

Instead, the heavily-lawyered language clumsily attempted to redefine the term “pusher”, suggesting that because Nikola hoped its non-functional vehicle would work someday, that it therefore wasn’t a pusher at the time.

We appreciate that Nikola’s new law firm, Kirkland & Ellis, tried to do their best with what they had to work with. However, Trevor later helpfully defined the term “pusher” on video while emphatically denying that the truck fit his own definition:

This isn’t just a pusher like a lot of vehicles that they unveil [that] are just vehicles that don’t actually function. This is a fully functioning vehicle which is really incredible.

With that definition in mind, we offer a reminder that Nikola and Trevor reassured investors that the Nikola One semi worked at least 6 times:

  • Nikola called the truck “functioning” and “fully built” on Twitter on October 16, 2016.
  • At the December 1, 2016 launch event, Trevor says: “This thing fully functions and works, which is really incredible.”
  • He also said “We will have a chain on the seats to prevent people from coming and just for the safety. I don’t want someone to end up doing something and driving this truck off the stage.”
  • Later at the same event, he insisted 3 times that the truck was real, stating “know it’s real”, “you’re going to see this is a real truck” and “this is not a pusher”.
  • Trevor again said, in a video dated December 2, 2016: “this isn’t just a pusher” and “this is a fully functioning vehicle”

Given Nikola’s admission that the truck seen in the video was not fully functioning, the above were all clearly statements that misled investors. In other words, these were outright lies.

Our Report: Former Employees Told Us No Further Work Continued On The Nikola One After 2016 Even Though The Company Was Still Publicly Claiming In 2018 That the Nikola One Would Soon be Ready

Referring to the “Nikola One in Motion” video, a company tweet in June 2018 stated that “pre-production units (would) hit fleets in 2019 for testing” which was false. Former employees told us that no further work continued on the Nikola One after the 2016 demonstration.

Note that a former employee indicated to us that work on the Nikola One was abandoned immediately after the initial reveal, in December 2016.

Yesterday, Nikola stated that “it ultimately decided not to invest additional resources into completing the process to make the Nikola One drive on its own propulsion”, seemingly validating our findings.

Nikola’s decision to ultimately halt investment is not the issue; the company’s failure to acknowledge that it had halted investment while telling investors work continued is the problem, and represents another clear case of making knowingly misleading statements.

Our Report: Nikola And Trevor Hyped A Letter of Intent to Acquire Battery Technology Company ZapGo. The Tech Turned Out To Be Vaporware. After Nikola Realized This, They Continued To Hype It Anyway

Nikola’s Response: It Wasn’t ZapGo We Were Hyping. The Game Changing Battery Tech is Part of a Secret R&D Agreement We Can’t Provide Any Details On. Also, We Are Using GM’s Battery Technology for Some Reason

In our report, we pointed out that Nikola had introduced the Nikola battery “prototype cell” and called it “game changing battery technology” in November 2019. Trevor Milton also hyped it as technology that would make “diesel trucks obsolete for good” on Twitter on November 18, 2019.

The company originally called it “game-changing” and “the biggest advancement we have seen in the battery world.” In Nikola’s response from yesterday, however, the technology is now only described as “potential battery technology advancements”.

Our report noted that the letter of intent with ZapGo was signed within 2 days of a tweet teasing the press release on the battery technology. The press release then referenced the Letter of Intent, stating:

“Nikola entered into a letter of intent to acquire a world-class battery engineering team.”

ZapGo was later accused by Nikola of fraud, false representations, and failure to disclose that its President had been indicted for tax fraud.

Nikola’s own lawsuit indicated that it was made aware of these issues on December 5, 2019, and we noted that Trevor continued to hype the company’s battery technology into February 2020.

Nikola formally terminated the agreement on February 26, 2020 and appears not to have publicly discussed the situation since, until yesterday.

Now, Nikola has responded that Trevor’s statements regarding the company’s battery technology were related to “an ongoing confidential R&D partnership with a leading academic institution”.

It goes without saying that funding academic research is not the same thing as acquiring a team of engineers, as the original “game changing” announcement indicated.

The newly referenced academic partnership appears to have been first talked about in August 2020 in this YouTube video, where Milton says about Nikola’s battery technology: “It’s tied to a university that had developed the technology. And we essentially ended up licensing all of it and helping them fund it all the way through.”

We asked Nikola to provide dated agreements and documents that support that the supposed secret partnership had been ongoing prior to the company’s mid-November 2019 press release.

We asked:

“Which university were you working with on the battery technology, how much did you fund them with, and exactly what have you developed in conjunction with them thus far? Will you post the agreement for all to see?”

Instead we are met with more vague answers. The company’s response provided no details about the confidential R&D relationship that supposedly involves advanced battery technology, and no indication of when it began.

Our Report: Trevor Claimed to Have Reduced the Cost of Hydrogen By 81% Relative To Peers And Was Producing 1,000 kg of Hydrogen Per Day At Nikola’s Headquarters

Nikola’s Response Confirmed That None of this Happened: “Nikola Continues to Believe that its Planned Hydrogen Station Network…Will Provide Key Competitive Advantages.”

At Nikola World in December 2019 Trevor claimed on video that Nikola was producing 1,000 kilograms of hydrogen a day on site at his Phoenix headquarters:

In America we’ve already got the largest hydrogen station in the western hemisphere at our headquarters. Can produce over 1,000 kilograms a day on site.”

Subsequent to Nikola World, Trevor reiterated in several public interviews that he achieved significant breakthroughs in hydrogen production.

In an August 2020 interview with Fox Business News, when asked about the company’s hydrogen, Trevor says:

“We saw an opportunity to bring the cost of hydrogen down going zero-emission and putting it on parity with diesel, and it’s the first time in history that’s been able to be done, so it went from about $16/kg and we are down now below $4/kg.

In another interview on July 17, 2020, on the TeslaCharts podcast, Trevor claimed Nikola has been able to “chop the cost of hydrogen from $16/kg down to – we’re down below $3/kg on our hydrogen now.”[1] [11:34].

Trevor’s claims followed a years-long pattern of hyping Nikola’s non-existent hydrogen network, including this comment from 2018 in response to the Facebook video of its “Nikola One In Motion”, publicly assuring readers that the company had 8 hydrogen stations “going up right now”:

nikola's response

As acknowledged by the company’s statement Monday, it has no hydrogen network, and simply hopes to have one in the future. This once again strikes us as a tacit admission of securities fraud.

Our Report: Trevor Milton Falsely Claimed In 2020 That Five Nikola Tre Trucks Were “Coming Off The Assembly Line Right Now”

Bloomberg Corroborates: The Assembly Line Isn’t Finished

Nikola’s Response Tacks A Year and A Half Onto Trevor’s Publicly Disclosed “Right Now” Achievement, Saying It Doesn’t Expect the Tre Until Q4 2021

Our research highlighted statements made by Trevor in July 2020 that 5 Nikola Tre trucks were coming off an assembly line in Germany. We showed in our report that none of the trucks had been completed and that the assembly line itself had not been completed.

Bloomberg has since confirmed our work, writing:

Those statements were a mischaracterization of Nikola and Iveco’s progress in Ulm, according to two people familiar with the matter. The assembly line is still under construction and not yet operational or building prototypes, the people said. There are prototypes being built by hand in a workshop, one of the people said.”

On Friday, in response to our report, Trevor tweeted pictures of unfinished Nikola Tre trucks in a work area that is clearly not an assembly line.

In its response on Monday morning, Nikola stated:

“five trucks are currently being built and commissioned in Ulm, Germany, and are pre-production builds”

This confirmed our original report, including comments quoted by a Bosch spokesman, indicating the trucks were still not completed and had not rolled off an assembly line in July. Nikola then stated that it expects the Tre to be “ready for production and available to customers by the fourth quarter of 2021.”

We view this, once again, as an admission that Trevor’s statement to investors in July was patently false. Not only were completed trucks not rolling off an assembly line, but an assembly line hadn’t even been constructed. The trucks remain uncompleted.

Our Report: Nikola’s Order Book Is Fluff, Including A ~$3.5 Billion Order From A Company With Only $1.3 Million In Cash

Nikola’s Response: We Have an Order From A Different Company, That We Hope To Begin Deliveries On In Three Years

In our report we pointed out that the company’s order book appeared to be filled with fluff, including non-committal orders and orders where potential customers like Anheuser Busch have multiple ‘outs’.

We showed that U.S. Xpress reportedly accounts for a third of its reservations, representing ~$3.5 billion in orders, yet U.S. Xpress had only $1.3 million in cash on hand last quarter.

Monday morning, the company failed to address the issue and simply reiterated that it had an order from another company, Republic Services, that it hopes to begin deliveries on three years from now.

We view this as an admission that the company’s order book was, in fact, filled with fluff.

Our Report: The Company’s Unveiling of Its NZT Off-Road Vehicle Deceptively Presented a Mock-Up As if It Was Market-Ready. Following the “Unveiling” the Project Was Then Outsourced for Redesign.

Nikola Responded By Re-Wording Our Statements Then Declaring The Reworded Statements to be False

In our report, we described the ‘unveiling’ of the company’s NZT off-road vehicle at Nikola World in 2019. At the event, Trevor described the product as a fait accompli of its design team, saying it “rivals some of the best automotive engineering in the world”.

We reported that the model was actually not completed, and that weeks later, Nikola scrapped the design and quietly outsourced the redesign to a company called Stellar Strategy.

In response, Nikola reworded our statements regarding the company’s NZT off-road vehicle in order to claim those pretend statements were false.

Nikola inaccurately stated that we claimed the NZT “program” was scrapped after the Nikola World 2019 event. In fact, we clearly stated that the program continued, but that the design was outsourced to a third party called Stellar Strategy LLC.

nikola's response

Nikola failed to refute our point that it presented (yet again) a non-functional “mock-up” of the NZT at Nikola World. We believe this represents a tacit admission that it’s NZT “reveal” was a farce.

The company also failed to mention Stellar Strategy in its rebuttal despite our specific question asking about the relationship, which we believe underscores its inability to design and innovate internally.

Our Report: Why Would Trevor Appoint His Brother As “Director of Hydrogen Production/Infrastructure” Given He Had No Apparent Experience in Hydrogen Technology?

Nikola's Response: Travis Milton Ran A Construction Business

In our report, we noted that Trevor Milton appointed his younger brother Travis to a position that required scientific expertise. We asked:

“Why did you appoint your brother Travis as “Director of Hydrogen Production/Infrastructure”? What experience does he have in hydrogen research and production?”

We further asked:

“What would you say are Travis’ key contributions to Nikola’s alleged breakthrough advancements in hydrogen production?”

The company responded on Monday by claiming that Travis is qualified for this high-level scientific position because he previously worked in construction:

“Travis Milton previously owned and operated his own construction company preparing him for hydrogen station infrastructure and buildouts.”

When faced with the same question, in a since-deleted Instagram rant addressing the question (we have a copy), Trevor stated:

“Why do you give a shit? Go start your own company—hire your own employees!”

Our questions to the company concerned Travis’ contributions to Nikola’s claimed hydrogen breakthroughs, and his experience with the significant technical and scientific challenges of hydrogen production, storage and delivery. Those questions remain completely unanswered.

Our Report: Trevor Claimed On Video That Nikola’s Inverters Were Developed In House And That OEMs Were Asking To Use Them. In The Same Video He Is Showcasing An Inverter Manufactured By Cascadia With Masking Tape Covering Its Label.

Nikola’s Response: Admits This is True, Then Deflects by Vaguely Stating That the Company Has Been “Working on Its Own Inverters For Quite Some Time”

In our report, we pointed out that Trevor, on video, claimed that Nikola made its own inverters in-house, along with all the e-axle design and other key components.

In the same video, Trevor shows off an inverter that we discovered is actually manufactured by Cascadia, with a piece of masking tape on the label that concealed who really made it.

The company once again admitted the claims in our report to be true, and walked back its claims that these inverters were Nikola’s proprietary intellectual property by vaguely stating that it is “working on” its own inverter:

“Nikola has been designing, engineering and working on its own inverters for quite some time.”

The company’s CEO, Mark Russell, further walked back the company’s claims to have vast proprietary technology when pressed by reporters from the Financial Times on Friday:

“Asked about Mr. Milton’s claim to have all the ‘core’ technology for its vehicles, Mr. Russell described the company as an ‘integrator’, stitching together the many elements of its vehicles from a complex supply chain.

Russell’s admission clearly corroborates our own findings, and directly contradicts Trevor’s repeated claims of Nikola having vast proprietary intellectual property.

The company’s response on Monday morning declared that “at no time did Nikola state that the inverter on the prototype truck shown in the video was the Company’s.” But of course it ignores the fact that there is video proof, narrated by Milton himself:

“We do all the e-axle design in house. All the gears, the gear reductions. The thermal the cooling. Even the controls that go with it. And, also, the inverters as well. All inverters on the Nikola truck are probably some of the most advanced software systems that I know of anywhere in the automotive world. Why do I know that? It’s because other OEMs are asking us to use it.”

Why would OEMs be asking to use an inverter that hadn’t even been developed? Furthermore, Trevor actually points to the supposed “in-house” inverter in question in the video:

nikola's response
Pictured: Trevor Milton’s finger, while he narrates a “Behind the Scenes” video, pointing at a Cascadia Inverter with masking tape over its label, about 15 minutes before proclaiming Nikola makes all its own inverters.

Once again, the company admitted our findings were correct.

Now, rather than defending its previous false claims to have developed revolutionary proprietary technology for use in its vehicles and prototypes, Nikola now vaguely claims to be working on it.

Our Report Presented Evidence That Trevor Misled Potential Investors in a Predecessor Entity by Inflating a $16 Million Deal with Trucking Company Swift Into a $300 Million Deal.

Nikola Claims the Deal Could Have Been $250 Million With Options.

Swift Didn’t Exercise Those Options And, Instead, Sued dHybrid Over Misrepresentations With its Original $16 Million Deal.

In our report, we pointed out one of Trevor Milton’s early business ventures, called dHybrid, closed on a $16 million contract with Swift Transportation before being sued by Swift over allegations of providing it with trucks that didn’t work and of misappropriating capital for personal use.

Nikola writes off this portion of our report by inexplicably claiming that the agreement “has no connection with or association to Nikola.” This ignores the fact that Trevor Milton was dHybrid’s founder, as well as Nikola’s founder, former CEO, major shareholder and current Executive Chairman.

Nikola also points out that that Swift Transportation had options to make future purchases from dHybrid for $250 million.

We showed a slide from an investor presentation claiming the contract to be $300 million, a clear inflation, by the company’s own standard:

nikola's response

In reality, nowhere near $250 million changed hands, however. Swift sued dHybrid after an investment of about $2 million, alleging that the dHybrid trucks didn’t work and that officers of dHybrid misappropriated capital for personal use.

Nikola Failed to Address 43 of Our 53 Questions

Their Silence on These Questions Speak Volumes

At the bottom of our original report, we offered Nikola 53 questions it could answer to clear the air for investors, the market and its stakeholders alike. Instead of answering them, Nikola only touched on 10 of them.

Despite claiming to have found “dozens” of inaccuracies with our report, Nikola’s response essentially validated all of the issues we raised. Below are the questions Nikola did not even attempt to address:

1. Before suddenly pivoting to fuel cells, you claimed that your Compressed Natural Gas (CNG) technology was “10-15 years ahead of any other OEM in fuel efficiencies, MPG, and emissions”. Why did you suddenly abandon this supposedly revolutionary technology rather than sell it for billions of dollars?

Nikola’s response: NONE

2. You claimed that Nikola’s headquarters has 3.5 MW of solar panels on the roof, yet later media reports and pictures of the roof show they don’t exist. Where did they go?

Nikola’s response: NONE

3. You claimed Nikola owned its own natural gas wells, then re-affirmed that you “still have them” when later asked what happened to them. Can you provide any documentation proving Nikola owns/owned natural gas wells?

Nikola’s response: NONE

4. In 2018 you were sued by your former CFO. What were the allegations in the complaint, which is now sealed?

Nikola’s response: NONE

5. What OEMs have asked to use “your” inverters in their products, as Trevor claimed on video?

Nikola’s response: NONE

6. You appointed your brother Travis as “Director of Hydrogen Production/Infrastructure”. What experience does he have in hydrogen research and production?”

Nikola’s response: NONE

7. What would you say are Travis’ key contributions to Nikola’s alleged breakthrough advancements in hydrogen production?

Nikola’s response: NONE

  1. After the Bloomberg piece, you claimed on Twitter that there was a table with truck gears and components sitting in front of the audience for all to see. The event was extensively documented—can you present evidence that such a table existed in plain view for the entire audience?

Nikola’s response: NONE

  1. Do you think a table with gears sitting somewhere would in any way invalidate your claims at the time that the truck “fully functions” when it was later shown that it didn’t?

Nikola’s response: NONE

  1. After lambasting Bloomberg’s reporter publicly, calling him a “deceiver” and saying he should be fired, you then promised the full audio of the interview with Bloomberg would be released. Why haven’t you released it yet?

Nikola’s response: NONE

  1. Do you think it’s wise to threaten to sue journalists for getting a story totally correct?

Nikola’s response: NONE

  1. In August 2016, you claimedNikola has engineered the holy grail of the trucking industry”, pivoting to hydrogen from natural gas. Now that you have acknowledged the Nikola One wasn’t fully “engineered” at the time of the statement or the December show, do you wish to retract this press release in full?

Nikola’s response: NONE

  1. Did the Nikola One truck have hydrogen turbines or Brayton CNG turbines at the time of the demonstration in December? Was the fueling system hydrogen or CNG?

Nikola’s response: NONE

  1. Why did you say just two weeks before Nikola’s sudden “pivot” to hydrogen that “CNG is the way to go” on Twitter if you were imminently planning to announce a switch?

Nikola’s response: NONE

  1. Did you have an artist come in and stencil “H2” and “Zero Emission Hydrogen Electric” on the side of the Nikola One despite the truck having natural gas components installed?

Nikola’s response: NONE

  1. Do you still consider the Nikola One to have been “fully functioning” despite needing to snake an electricity cord up through the stage in order to power the otherwise completely non-working vehicle?

Nikola’s response: NONE

  1. Which Nikola employees knew about the “plan” for the Nikola One in Motion video and which ones participated in creating it? Did those include Kevin Lynk, your Chief Engineer?

Nikola’s response: NONE

  1. At the time, did you think pre-production units of the Nikola One would just magically produce themselves?

Nikola’s response: NONE

  1. According to you, Nikola designs most things in-house. Did you outsource the redesign of the NZT to Stellar Strategy?

Nikola’s response: NONE

  1. In October 2019, you teased a major battery breakthrough 2 days before signing a letter of intent with ZapGo. You then announced that you had revolutionized the battery industry, before realizing that it was vaporware and ultimately suing the company. Why didn’t you correct the press release or update your investors on the status of the deal, which had fallen apart?

Nikola’s response: NONE

  1. In December 2019, Jason Roycht, your VP of Technology Development, realized that ZapGo’s President had been indicted for fraud. He raised alarms about the company’s relationship with Porsche, which he determined was overstated. Why did you hype the battery tech in February on Twitter despite already knowing of all these issues?

Nikola’s response: NONE

  1. You formally terminated the agreement for the apparent “game changing battery technology” from ZapGo on February 26th, 2020. It is now 6+ months later. Have you ever publicly acknowledged that this major deal fell apart?

Nikola’s response: NONE (until yesterday, apparently.)

  1. In August 2020 when specifically questioned about the deal by a Tesla fan, why didn’t you take the opportunity to let people know that it had fallen through?

Nikola’s response: NONE

  1. You claimed in an interview to have succeeded at cutting the cost of hydrogen by ~81% from peers, stating “we’re down below $3/kg on our hydrogen now”. How much hydrogen has Nikola produced at this price, if any?

Nikola’s response: NONE

  1. At Nikola World 2019 you claimed on video to be producing 1,000 kg of hydrogen per day at your headquarters. When pressed by a reporter, you later admitted that you produce no hydrogen. Did you lie about producing hydrogen on camera to the entire audience at Nikola World?

Nikola’s response: NONE

  1. Why did you post a video saying the Nikola Two had gone from 0-60mph in under 5 seconds when anyone with a stopwatch can see that it took at least 10 seconds?

Nikola’s response: NONE

  1. Following the 0-60 video you promised to post a professional version of the video, saying it was just being edited. But you never did. Why? Does the Nikola Two have as much power as you’ve claimed it has?

Nikola’s response: NONE

  1. In the TeslaCharts podcast at the 40:20 minute mark you said regarding hydrogen stations: “we’re gobbling up the best locations right now“. Yet your latest quarterly report showed no real estate assets aside from your current headquarters. Where exactly are these locations that you have been “gobbling up”? How many have you purchased already?

Nikola’s response: NONE

  1. What is the hold up with your Coolidge facility construction? Have plans been submitted yet and permits been received? Why is there virtually no sign of progress?

Nikola’s response: NONE

  1. Why do you spend so much time on social media fighting your “haters” and threatening former employees with litigation over NDA enforcement? Don’t you have a factory to build and products to produce?

Nikola’s response: NONE

31. Did you have your service personnel traverse the country to conceal potentially fatal defects with dHybrid’s product to close the deal with Worthington, as alleged by one of your former employees on recorded audio?

Nikola’s response: NONE

  1. What was the rationale for Worthington’s later impairment of dHybrid and the write-off of $1.5 million in warranty expenses?

Nikola’s response: NONE

  1. In May 2015, you represented in a legally binding contract with EVdrive to have “new and valuable proprietary turbine technology”. Months later, emails showed you were in discussions with Brayton to purchase their turbines. Did you have any “new and valuable turbine technology” at the time you represented having it?

Nikola’s response: NONE

  1. If so, what was it, and why did you then need to buy turbine technology from Brayton?

Nikola’s response: NONE

  1. When you sold your St. George Security & Alarms company in an $300,000 deal, your business partner, who said he had a 50/50 deal with you, only received ~$100,000, according to him. Did you get more than him despite having a 50/50 arrangement?

Nikola’s response: NONE

  1. The buyer of the alarm business said you misled him and that customer contracts and other deals fell through post-sale. What happened?

Nikola’s response: NONE

  1. How much did you make when you sold the alarm business a second time? How much of those proceeds did your apparent “50/50” business partner receive?

Nikola’s response: NONE

  1. You claimed that uPillar.com had 80 million monthly active users and that you had beat Amazon to the shopping cart, despite launching in 2009. A former employee called the 80 million number “absurd”, and media articles at the time describe the page views far lower. What evidence can you show that you had that number of page views?

Nikola’s response: NONE

  1. Do you realize the internet shopping cart was invented 15 years earlier, in 1994?

Nikola’s response: NONE

  1. Swift filed a lawsuit against your company dHybrid in mid-2012, alleging, among other things, that you had used its investment for personal use. Can you produce bank records showing how you used dHybrid funds? Did you divert funds to uPillar.com?

Nikola’s response: NONE

  1. Did you claim to sPower that you had finished the dHybrid system and then misrepresent its results to them, as alleged in their lawsuit?

Nikola’s response: NONE

  1. When you launched dHybrid Systems in 2012, why did you claim in marketing materials to have started the business in 2011?

Nikola’s response: NONE

43. Have you ever deceived anyone?

Nikola’s response: NONE

Conclusion:

Nikola’s Response Had Holes Big Enough to Roll a Truck Through. We Remain Short Shares of Nikola Corp

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