Nikola (NKLA) is nearing a bankruptcy filing, as it works with Pillsbury Winthrop Shaw Pittman to consider options like restructuring or a potential sale, multiple news outlets reported Friday, citing sources familiar with the matter.

The company reportedly said it is assessing its financial health and liquidity needs while exploring financing as part of a broader restructuring plan.

Nikola has faced significant setbacks since its founder, Trevor Milton, was convicted of securities fraud in 2022 for misleading investors about the company's zero-emissions technology, the media outlets reported.

Despite gathering $300 million through debt and equity offerings last year, Nikola reported a nearly $200 million net loss in its most recent quarter and has produced just over 80 vehicles, the news outlets quoted the sources as saying.

Both Nikola and Pillsbury Winthrop Shaw Pittman did not immediately respond to MT Newswires' request for comment.

The motor company's shares dropped more than 32% in recent Friday premarket activity.