COMMITMENTS AND CONTINGENCIES Legal Proceedings The Company is subject to legal and regulatory actions that arise from time to time in the ordinary course of business. The assessment as to whether a loss is probable or reasonably possible, and as to whether such loss or a range of such loss is estimable, often involves significant judgment about future events, and the outcome of litigation is inherently uncertain. Other than as described below, there is no material pending or threatened litigation against the Company that remains outstanding as of September 30, 2020. Regulatory and Governmental Investigations On September 14, 2020, the Company and five of its officers and employees received subpoenas from the SEC as part of a fact-finding inquiry related to aspects of the Company's business as well as certain matters described in a report issued on September 10, 2020 by Hindenburg Research LLC (the Hindenburg Report). The SEC issued subpoenas to another three of the Company's officers and employees on September 21, 2020. The SEC issued subpoenas to Nikolas directors on September 30, 2020. The Company and Trevor Milton also received grand jury subpoenas from the U.S. Attorneys Office for the Southern District of New York on September 19, 2020. The Company also received a grand jury subpoena from the N.Y. County District Attorneys Office on September 21, 2020. The Company has cooperated, and will continue to cooperate, with these and any other regulatory or governmental requests. Shareholder Securities Litigation Beginning on September 15, 2020, five putative class action lawsuits were filed against the Company and certain of its current and former officers and directors, asserting violations of federal securities laws under Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934 and, in one case, violations of the Unfair Competition Law under California law (the Shareholder Securities Litigation). The complaints generally allege that the Company and certain of its officers and directors made false and/or misleading statements in press releases and public filings regarding the Company's business plan and prospects. The actions are: Borteanu v. Nikola Corporation, et al. (Case No. 2:20-cv-01797-JZB), filed by Daniel Borteanu in the United States District Court of the District of Arizona on September 15, 2020; Salem v. Nikola Corporation, et al. (Case No. 1:20-cv-04354), filed by Arab Salem in the United States District Court for the Eastern District of New York on September 16, 2020; Wojichowski v. Nikola Corporation, et al. (Case No. 2:20-cv-01819-DLR), filed by John Wojichowski in the United States District Court for the District of Arizona on September 17, 2020; Malo v. Nikola Corporation, et al. (Case No. 5:20-cv-02168), filed by Douglas Malo in the United States District Court for the Central District of California on October 16, 2020; and Holzmacher, et al. v. Nikola Corporation, et al. (Case No. 2:20-cv-2123-JJT), filed by Albert Holzmacher, Michael Wood and Tate Wood in the United States District Court for the District of Arizona on November 3, 2020. On October 14, 2020 and October 21, 2020, respectively, stipulations by and among the parties to extend the time for defendants to respond to the complaints until a lead plaintiff, lead counsel, and an operative complaint are identified were entered as orders in the Wojichowski and Salem actions. Plaintiffs seek an unspecified amount in damages, attorneys fees, and other relief. The Company intends to vigorously defend against the foregoing complaints. The Company is unable to estimate the potential loss or range of loss, if any, associated with these lawsuits. Derivative Litigation Beginning on September 23, 2020, two purported Nikola stockholder derivative actions were filed in the United States District Court for the District of Delaware ( Byun v. Milton, et al. , Case No. 1:20-cv-01277-UNA; Salguocar v. Girsky et. al., Case No. 1:20-cv-01404-UNA), purportedly on behalf of Nikola, against certain of the Company's current and former directors alleging breaches of fiduciary duties, violations of Section 14(a) of the Securities Exchange Act of 1934, and gross mismanagement. The Byun action also brings claims for unjust enrichment and abuse of control, while the Salguocar action brings a claim for waste of corporate assets. On October 19, 2020, the Byun action was stayed until the earlier of (a) the Shareholder Securities Litigation being dismissed in their entirety with prejudice; (b) defendants filing an answer to any complaint in the Shareholder Securities Litigation; or (c) a joint request by plaintiff and defendants to lift the stay. The Company has been served with both stockholder derivative actions as of the date of this Quarterly Report on Form 10-Q. The complaints seek unspecified monetary damages, costs and fees associated with bringing the actions, and reform of the Company's corporate governance, risk management and operating practices. The Company intends to vigorously defend against the foregoing complaints. The Company is unable to estimate the potential loss or range of loss, if any, associated with these lawsuits. Commitments and Contingencies on Land Conveyance In February 2019, the Company was conveyed 430 acres of land in Coolidge, Arizona, by PLH. The purpose of the land conveyance was to incentivize the Company to locate its manufacturing facility in Coolidge, Arizona, and provide additional jobs to the region. The Company is required to commence construction, as defined within the agreement, of the manufacturing facility within two years of February 2019 (the Manufacturing Facility Commencement Deadline), and is required to complete construction of the manufacturing facility within five years of February 2019 (the Manufacturing Facility Deadline). Upon the earlier of the Manufacturing Facility Commencement Deadline or the commencement of construction the Company will deposit $4.0 million in escrow to PLH. The amount in escrow will be returned to the Company upon completion of construction. The Company broke ground on the manufacturing facility during the third quarter of 2020 and met the definition of commencement of construction as of September 30, 2020. The required deposit is included within non-current restricted cash and cash equivalents on the consolidated balance sheets. If the Company fails to meet the Manufacturing Facility Deadline, the Company may extend the completion deadline by paying PLH $0.2 million per month, until construction is completed (the "Monthly Payment Option"). The extension of the Manufacturing Facility Deadline beyond two years will require express written consent of PLH. If the Company does not exercise the Monthly Payment Option, fails to make timely payments on the Monthly Payment Option, or fails to complete construction by the extended Manufacturing Facility Deadline, PLH is entitled to either the $4.0 million security deposit or may reacquire the land and property at the appraised value to be determined by independent appraisers selected by the Company and PLH. Contingent Fee for Advisory Services In January 2020, the Company entered into an agreement to obtain advisory services for the potential Business Combination. The fee for the services was contingent upon completion of the Business Combination, which occurred on June 3, 2020. The contingent fee of $3.0 million was paid during the second quarter of 2020. Agreement with General Motors On September 3, 2020, the Company entered into a series of agreements with General Motors Holdings LLC and its affiliates (collectively, GM), which provide for issuance of 47,698,545 shares of the Company's common stock in exchange for in-kind consideration valued at $2 billion. As a part of the in-kind consideration, GM would provide in-kind engineering services for the design and development of light-duty electric and hydrogen fuel cell powered trucks and for the integration of GM's hydrogen fuel cell system into the Company's Class 7/8 vehicles, access to GMs validated parts and components, supply of battery cells and intellectual property license to permit the sale of the Company's vehicles incorporating such technology. The agreements require the Company to reimburse GM for up to $700 million of capital expenses to make available manufacturing capacity for its light-duty trucks, which would be manufactured by GM and supplied to the Company based on a cost-plus model. In connection with its investment, GM would be entitled to nominate one individual for election to the Companys board of directors at the Companys annual meeting of stockholders. GM would also be subject to a lock-up restriction for a period of up to four-and half years, releasing in several tranches during that period. GM would also be subject to a standstill restriction for a period of three years or until such time GM ceases to beneficially own at least ten percent (10%) of shares of the Companys common stock. The closing of the transaction is subject to regulatory approvals and other closing conditions. The closing has not occurred as of the date of this Quarterly Report on Form 10-Q. Discussions between the Company and GM are ongoing, and terms of the agreements are subject to change.