Nikola Corporation ( NKLA ) shares are trading lower in the premarket session on Wednesday, after it filed for Chapter 11 bankruptcy, seeking to auction its assets while continuing limited operations through March 2025.

Nikola ( NKLA ) announced today that it and certain subsidiaries have filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the District of Delaware.

According to Benzinga Pro, NKLA stock has lost over 96% in the past year.

Related Read: Nikola ( NKLA ), Once A $30 Billion EV Sensation, Struggles To Survive After Hindenburg Fallout And Mounting Losses

The company is also seeking authorization for an auction and sale process under Section 363 of the Bankruptcy Code. This move comes as Nikola ( NKLA ) looks to address its liquidity challenges and explore options to maximize value for stakeholders.

In December, Nikola ( NKLA ) launched $300 million in debt and equity offerings to raise capital for working capital, as disclosed in the company’s public filings, per a recent report by The Wall Street Journal.

Last year, Nikola’s CFO, Thomas Okray, informed investors that the company’s cash reserves would only last until April of this year, the report noted.

Nikola’s financial position includes approximately $47 million in cash, which will be used to fund its ongoing activities, including limited operations.

Also Read: Nikola Eyes Sale, New Partners As It Risks Running Out Of Cash By End Of First Quarter

The company intends to continue essential services, such as supporting its hydrogen fuel cell electric vehicles in the field, as well as certain HYLA fueling operations, through the end of March 2025.

After that, Nikola ( NKLA ) plans to partner with other entities to maintain these services.

In his statement, Nikola’s President and CEO Steve Girsky acknowledged the company’s progress in advancing zero-emissions transportation, citing milestones such as the launch of North America’s first commercially available Class 8 hydrogen fuel cell electric trucks and the creation of the HYLA hydrogen refueling network.

“Our customers have accumulated approximately 3.3 million fleet miles across both our FCEV and BEV truck platforms and our HYLA fueling network has dispensed well over 330 metric tons of hydrogen,” Girsky said. 

Despite these achievements, Girsky emphasized the market and macroeconomic challenges that have hindered the company’s ability to maintain operations.

“In recent months, we have taken numerous actions to raise capital, reduce our liabilities, clean up our balance sheet and preserve cash to sustain our operations. Unfortunately, our very best efforts have not been enough,” the CEO added.

Meanwhile, electric vehicle companies that went public during the pandemic, including Fisker, Lordstown Motors, and Proterra, went bankrupt in recent years as funding for their operations dwindled amid rising interest rates and decreasing demand, Reuters reports.

Nikola ( NKLA ) reported assets valued between $500 million and $1 billion, while its liabilities were estimated to range from $1 billion to $10 billion, the report further noted.

Price Action: NKLA shares are trading lower by 45.5% to $0.4170 premarket at last check Wednesday.

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