Nikola Corporation (NKLA)

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Nikola clear to increase share count — thanks to Delaware rule change
Wednesday, July 19, 2023
Delaware Gov. John Carney has signed legislation that clears the way for Nikola Corp. to double its number of outstanding shares. That will enable the electric truck maker to sell shares to pay interest on debt and support the launch of its hydrogen-powered fuel cell trucks.

The doubling of authorized shares from 800 million to 1.6 billion twice failed to receive enough shareholder proxies, leading to two adjournments of Nikola’s virtual annual meeting. The next count will take place Aug. 3, but the outcome of the vote is irrelevant.

Before the rule change in the state where Nikola is incorporated, the share increase needed to receive a majority, or about 400 million proxies, equal to 50% plus one of all outstanding shares.
Lower threshold

The new regulation requires only a majority of shares voting on the proposal. Nikola said it already has sufficient votes for the increase by counting that way. It was included in a package of changes that passed in both chambers of the Delaware Legislature.
https://www.freightwaves.com/news/nikola-clear-to-increase-share-count-thanks-to-delaware-rule-change

2023 Amendments to the Delaware General Corporation Law
June 30, 2023
On June 30, 2023, the Delaware House of Representatives adopted amendments to the Delaware General Corporation Law (DGCL) that, among other things, facilitate stock splits, the ratification of defective corporate acts, and the sale of pledged assets. The Delaware Senate approved the amendments on May 16, 2023. If signed into law by Delaware's governor, the amendments, subject to limited exceptions, will be effective August 1, 2023. Below is a summary of the key provisions:
Stock Splits and Changes in the Number of Authorized Shares (DGCL Section 242(d))

Forward Stock Splits – The amendments eliminate the stockholder approval requirement for amendments to a Delaware corporation's certificate of incorporation to affect forward stock splits (i.e., subdivisions of issued shares) and related increases in authorized shares (up to an amount proportionate to the forward stock split), provided that the corporation has only one class of stock outstanding and such class is not divided into series.
Reverse Stock Splits and Changes in the Number of Authorized Shares – The amendments reduce the stockholder vote required to amend the certificate of incorporation to affect a reverse stock split, or to increase or decrease the number of authorized shares of a class (other than in connection with forward stock splits) from a majority of the outstanding shares to a majority of the votes cast. The reduced vote will apply only if the class of stock is listed on a national securities exchange and would continue to meet the listing requirements of the exchange immediately after giving effect to such amendment.

The amendments provide that a corporation's certificate of incorporation may "opt in" to the prior stockholder vote requirements for the above-referenced matters by expressly stating that the stockholder vote otherwise required under DCCL Section 242(b) is required to adopt any amendment to the certificate of incorporation specified in DCCL Section 242(d) or by expressly "opting out" of the provisions of DCCL Section 242(d).
https://www.venable.com/insights/publications/2023/06/2023-amendments-to-the-delaware-general