Oklo Inc 8-K, filed May 13, 2024
Oklo Inc. (OKLO)
About this 8-K
Oklo Inc filed this 8-K on May 13, 2024, reporting on events of May 9, 2024.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.01: Completed an acquisition or sale of assets
- Item 3.03: Change to shareholders' rights
- Item 5.01: Change in control
- Item 5.02: Director or officer change, or executive pay
- Item 5.03: Charter or bylaw amendment, or fiscal year change
- Item 5.05: Code of ethics change or waiver
- Item 5.06: Change in shell company status
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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INTRODUCTORY NOTE
Unless the context otherwise requires, “we,” “us,” “our,” “Oklo” and the “Company” refer to Oklo Inc., a Delaware corporation (formerly known as AltC Acquisition Corp.), and its consolidated subsidiaries following the Closing (as defined below), and references to “AltC” refer to AltC Acquisition Corp., a Delaware corporation, prior to the Closing (as defined below). All references herein to the “Board” refer to the board of directors of Oklo.
“Legacy Oklo” refers to Oklo Technologies, Inc., a Delaware corporation (formerly known as Oklo Inc.) and a wholly owned subsidiary of the Company, which the Company acquired through the Business Combination (as defined below).
As disclosed under the section titled “Proposal No. 1—The Business Combination” beginning on page 152 of the definitive proxy statement/prospectus/consent solicitation statement (the “Proxy Statement/Prospectus/Consent Solicitation”), filed by AltC with the Securities and Exchange Commission (the “SEC”) on April 26, 2024, AltC entered into an Agreement and Plan of Merger and Reorganization (as amended, modified, supplemented or waived, the “Merger Agreement”), dated July 11, 2023, by and among AltC, AltC Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of AltC (“Merger Sub”), and Legacy Oklo. Pursuant to the Merger Agreement, Merger Sub was merged with and into Legacy Oklo, with Legacy Oklo surviving the merger as a wholly owned subsidiary of the Company (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”). In connection with the Closing, the Company changed its name from “AltC Acquisition Corp.” to “Oklo Inc.”
As previously reported, AltC held a special meeting of stockholders on May 7, 2024 (the “Special Meeting”), at which the AltC stockholders considered and adopted, among other matters, a proposal to approve the Business Combination, including (a) adopting the Merger Agreement and (b) approving the other transactions contemplated by the Merger Agreement and related agreements described in the Proxy Statement/Prospectus/Consent Solicitation.
Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, on May 9, 2024 (the “Closing Date”) the Business Combination was consummated (the “Closing”).
Item 2.01 of this Current Report on Form 8-K (this “Report”) discusses the consummation of the Business Combination and the entry into agreements relating thereto and is incorporated herein by reference.
Terms used in this Report but not defined herein, or for which definitions are not otherwise incorporated by reference herein, shall have the meaning given to such terms in the Proxy Statement/Prospectus/Consent Solicitation in the section titled “Frequently Used Terms” beginning on page 1 thereof or elsewhere in the Proxy Statement/Prospectus/Consent Solicitation, and such definitions are incorporated herein by reference.
Item 1.01. Entry into a Material Definitive Agreement.
Amended and Restated Registration Rights Agreement
On the Closing Date, in connection with the consummation of the Business Combination and as contemplated by the Merger Agreement, AltC, AltC Sponsor LLC, a Delaware limited liability company (“Sponsor”) and certain persons and entities receiving shares of Oklo Class A common stock (as defined below) in connection with the Business Combination entered into the Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”). The material terms of the Registration Rights Agreement are described in the section of the Proxy Statement/Prospectus/Consent Solicitation titled “Proposal No. 1—The Business Combination Proposal—Certain Agreements Related to the Business Combination—Registration Rights Agreement,” beginning on page 172 thereof. Such description is qualified in its entirety by the full text of the Registration Rights Agreement, which is included as Exhibit 10.1 to this Report and is incorporated herein by reference.
Sponsor Agreement
On July 11, 2023, in connection with the execution of the Merger Agreement, AltC entered into the Amended and Restated Letter Agreement with Sponsor, the Insiders and Legacy Oklo (the “Sponsor Agreement”). The material terms of the Sponsor Agreement are described in the section of the Proxy Statement/Prospectus/Consent Solicitation titled “Proposal No. 1—The Business Combination Proposal—Certain Agreements Related to the Business Combination—Sponsor Agreement,” beginning on page 45 thereof. Such description is qualified in its entirety by the full text of the Sponsor Agreement, which is included as Exhibit 10.2 to this Report and is incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
As described above, on May 7, 2024, AltC held the Special Meeting, at which the AltC stockholders considered and adopted, among other matters, a proposal to approve the Merger Agreement and the Business Combination. On the Closing Date, the parties consummated the Business Combination.
In connection with the Special Meeting, holders of 710 shares of AltC’s Class A common stock, par value $0.0001 per share (“AltC Class A common stock”) properly exercised their right to redeem their shares (the “Redemption”) for a pro rata portion of the trust account holding the proceeds from AltC’s initial public offering, calculated as of two business days prior to the Closing, which was approximately $10.50 per share, or approximately $7,457.80 in the aggregate.
As a result of the Business Combination, the aggregate consideration paid to Legacy Oklo equityholders, including Legacy Oklo stockholders and holders of outstanding Legacy Oklo options was (a) (i) $850,000,000 plus (ii) $25,000,000 in Permitted Equity Financing (the sum of (i) and (ii), the “Equity Value”), which consideration was paid entirely in shares of Oklo’s Class A common stock, par value $0.0001 per share (“Oklo Class A common stock”), in an amount equal to $10.00 per share, and (b) the contingent right to receive up to an aggregate of 15,000,000 shares of Oklo Class A common stock, which will be issued to eligible holders of pre-Closing securities of Legacy Oklo during the five-year period following the Closing (the “Earnout Period”), in three separate tranches equal to (i) 7,500,000 shares of Oklo Class A common stock, (ii) 5,000,000 shares of Oklo Class A common stock, and (iii) 2,500,000 shares of Oklo Class A common stock (such shares, the “Earnout Shares”), upon the satisfaction of certain price targets, which are based upon (A) the closing sale price of one share of Oklo Class A common stock as quoted on the New York Stock Exchange (“NYSE”) or the exchange on which the shares of Oklo Class A common stock are then traded, for any twenty trading days within any sixty consecutive trading day period within the Earnout Period or (B) if the Company undergoes a Change in Control (as defined in the Merger Agreement), the price per share received by stockholders of the Company in such Change in Control transaction. At the Effective Time, each share of Legacy Oklo’s common stock, par value $0.0001 per share (“Legacy Oklo common stock”) issued and outstanding immediately prior to the Closing was automatically surrendered and exchanged for the right to receive a number of shares of Oklo Class A common stock equal to the Exchange Ratio, which is based on the per share Equity Value (calculated in accordance with the Merger Agreement). The Exchange Ratio was approximately 6.062 shares of AltC Class A common stock (renamed Oklo Class A common stock after the Closing) for each issued and outstanding share of Legacy Oklo common stock.
At the Closing, (i) 78,996,459 shares of AltC Class A common stock (which remained outstanding as Oklo Class A common stock after the Closing) were issued to holders of Legacy Oklo common stock (“Legacy Oklo stockholders”) in exchange for all outstanding shares of Legacy Oklo common stock, including shares of Legacy Oklo common stock resulting from the conversion of Legacy Oklo’s preferred stock and Oklo SAFEs, (ii) 10,432,749 shares of AltC Class A common stock were reserved for issuance upon the exercise of all issued and outstanding options to purchase or acquire shares of Legacy Oklo common stock immediately prior to the Closing, and (iii) each outstanding share of AltC Class B common stock was converted into a share of Oklo Class A common stock on a one-for-one basis.
As described above, on July 11, 2023, AltC entered into the Sponsor Agreement, pursuant to which, among other things, Sponsor agreed, subject to the terms and conditions included therein, immediately prior to the Closing, to purchase in a private placement up to 5,000,000 shares of AltC Class A common stock at a purchase price of $10.00 per share equal to an amount up to $50,000,000 (the “Sponsor Commitment”). Under the terms of the Sponsor Agreement, if the Available Closing SPAC Cash (as defined in the Merger Agreement) was less than $250,000,000, Sponsor (or an affiliated co-investor of Sponsor) would have been required to fund an amount of the Sponsor Commitment equal to (i) $250,000,000 minus (ii) the Available Closing SPAC Cash, before accounting for the funding of any Sponsor Commitment; which amount, under no circumstances could exceed the maximum amount of the Sponsor Commitment. Because the Available Closing SPAC Cash (before accounting for the funding of any Sponsor Commitment) exceeded $250,000,000, Sponsor was not required to purchase any shares of AltC Class A common stock, and therefore the Sponsor Commitment was not funded.
After giving effect to the Redemption and the issuance of shares of Oklo Class A common stock to Legacy Oklo stockholders in connection with the consummation of the Business Combination, there were 122,096,270 shares of Oklo Class A common stock issued and outstanding. Of those shares, 78,996,459 were issued to holders of Legacy Oklo equity securities in respect of such securities, representing approximately 64.7% of the Company’s voting power following the Closing.
Oklo’s Class A common stock commenced trading on the NYSE under the symbol “OKLO” on May 10, 2024.
FORM 10 INFORMATION
Item 2.01(f) of Form 8-K provides that if the predecessor registrant was a “shell company” (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as AltC was immediately before the Business Combination, then the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities on Form 10. As a result of the consummation of the Business Combination, and as discussed below in Item 5.06 of this Report, the Company has ceased to be a shell company. Accordingly, the Company is providing the information below that would be included in a Form 10 if it were to file a Form 10. Please note that the information provided below relates to the combined company after the consummation of the Business Combination, unless otherwise specifically indicated or the context otherwise requires.
Cautionary Note Regarding Forward-Looking Statements
This Report includes statements that express Oklo’s opinions, expectations, objectives, beliefs, plans, intentions, strategies, assumptions, forecasts or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements.” The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” or, in each case, their negative or other variations or comparable terminology, and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Report (including in information that is incorporated by reference into this Report) and include statements regarding our intentions, beliefs or current expectations concerning, among other things, the Business Combination and the benefits of the Business Combination, including results of operations, financial condition, liquidity, prospects, growth, strategies and the markets in which Oklo operates. Such forward-looking statements are based on information available as of the date of this Report, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties.
As a result of a number of known and unknown risks and uncertainties, the actual results or performance of Oklo may be materially different from those expressed or implied by these forward-looking statements. The following important factors, in addition to those discussed under the heading “Risk Factors” in the Proxy Statement/Prospectus/Consent Solicitation, could affect Oklo’s future results and cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements:
| · | changes in domestic and foreign business, market, financial, political and legal conditions; |
| · | Oklo’s pursuit of an emerging market, with no commercial project operating; |
| · | the fact that Oklo has not entered into any definitive agreements with customers for the sale of power or recycling of nuclear fuel; |
| · | Oklo’s ability to enter into agreements with potential new customers to provide power may be limited by certain terms of the February 2024 LOI, including right of first refusal and most favored nations provisions; |
| · | Oklo’s potential need for financing to grow its business and/or to construct its powerhouses or other facilities; |
| · | the outcome of any legal proceedings that may be instituted against Oklo or AltC following announcement of the Business Combination; |
| · | risks relating to the uncertainty of the projected financial information with respect to Oklo, including conversion of reservations, letters of intent, and memoranda of understanding, into binding orders; |
| · | risks related to the timing of expected business milestones and commercial launch; |
| · | risks related to future market adoption of Oklo’s offerings; |
| · | the effects of competition; |
| · | changes in regulatory requirements, governmental incentives and fuel and energy prices; |
| · | changes to applicable government policies, regulations, mandates and funding levels relating to Oklo’s business with government entities; |
| · | the impact to Oklo and its potential customers from changes in interest rates or inflation and rising costs, including commodity and labor costs; |
| · | Oklo’s ability to rapidly innovate; |
| · | Oklo’s ability to maintain, protect and enhance its intellectual property; |
| · | Oklo’s ability to attract, retain and expand its future customer base; |
| · | Oklo’s ability to effectively manage its growth and recruit and retain key employees, including its chief executive officer and executive team; |
| · | Oklo’s ability to establish its brand and capture additional market share, and the risks associated with negative press or reputational harm; |
| · | Oklo’s ability to achieve a competitive levelized cost of electricity; |
| · | Oklo’s ability to manage expenses including operating and capital expenses; |
| · | Oklo’s projected commercialization costs and timeline; |
| · | Oklo’s ability to timely and effectively meet construction timelines and scale its production and manufacturing process; |
| · | changes in the policies, priorities, regulations, mandates and funding levels of the governmental entities to which Oklo is subject; |
| · | the risk that certain illustrative unit economics are based on assumptions and expectations, including with respect to costs, revenue, and sources of revenue, and gross margins, that prove to be incorrect for any reason; |
| · | the ability of Oklo to issue equity or equity-linked securities in the future; |
| · | the ability to raise sufficient capital to fund Oklo’s business plan; |
| · | the ability to recognize the anticipated benefits of the Transactions, which may be affected by, among other things, competition, and the ability of Oklo to grow and manage growth profitably; |
| · | the impact and potential extended duration of the current supply/demand imbalance in the market for high-assay low-enriched uranium; |
| · | whether government funding for high-assay, low-enriched uranium for government or commercial uses will result in adequate supply on anticipated timelines to support Oklo’s business; |
| · | Oklo’s and its commercial partners’ ability to obtain regulatory approvals necessary to deploy small modular reactors in the U.S. and abroad in a timely way, or at all; |
| · | risks relating to the negative public or political perception of Oklo or the nuclear energy industry in general; |
| · | the outcome of any potential litigation, government and regulatory proceedings, investigations and inquiries; and |
| · | those factors discussed under the section titled “Risk Factors” beginning on page 81 of the Proxy Statement/Prospectus/Consent Solicitation and incorporated herein by reference. |
The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of the other documents filed by Oklo from time to time with the SEC, as well as those factors described or incorporated by reference under the heading “Risk Factors” below. The forward-looking statements contained in this Report and in any document incorporated by reference are based on current expectations and beliefs concerning future developments and their potential effects on Oklo. There can be no assurance that future developments affecting Oklo will be those that Oklo has anticipated. Oklo undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Business
Oklo’s business is described in the Proxy Statement/Prospectus/Consent Solicitation in the section titled “Information About Oklo” beginning on page 255 thereof, which is incorporated herein by reference.
Risk Factors
The risks associated with Oklo’s business are described in the Proxy Statement/Prospectus/Consent Solicitation in the section titled “Risk Factors” beginning on page 81 thereof and are incorporated herein by reference. A summary of the risks associated with Oklo’s business is also included on pages 78-79 of the Proxy Statement/Prospectus/Consent Solicitation in the section titled “Risk Factors” and is incorporated herein by reference.
Financial Information
The audited financial statements of Legacy Oklo as of and for the years ended December 31, 2023 and 2022 and the related notes thereto are included in the Proxy Statement/Prospectus/Consent Solicitation beginning on page F-2 thereof and are incorporated herein by reference.
The unaudited financial statements of Legacy Oklo as of and for the three months ended March 31, 2024 and 2023 and the related notes thereto are set forth in Exhibit 99.1 hereto and are incorporated herein by reference.
The unaudited pro forma condensed combined financial information of the Company as of March 31, 2024, and for the three months ended March 31, 2024 and the year ended December 31, 2023 is filed as Exhibit 99.3 to this Report and incorporated herein by reference.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Legacy Oklo’s Management’s Discussion and Analysis of Financial Condition and Results of Operations for the years ended December 31, 2023 and 2022 is included on pages 270-281 of the Proxy Statement/Prospectus/Consent Solicitation and is incorporated herein by reference.
Legacy Oklo’s Management’s Discussion and Analysis of Financial Condition and Results of Operations for the three months ended March 31, 2024 and 2023 is set forth in Exhibit 99.2 hereto and is incorporated herein by reference.
Quantitative and Qualitative Disclosures about Market Risk
Reference is made to the disclosure in the section titled “Oklo’s Management’s Discussion and Analysis of Financial Condition and Results of Operation – Quantitative and Qualitative Disclosures About Market Risk” on pages 280-81 of the Proxy Statement/Prospectus/Consent Solicitation, which is incorporated herein by reference.
Properties
Oklo’s material facilities are described in the Proxy Statement/Prospectus/Consent Solicitation in the section titled “Information About Oklo —Facilities” on page 268 thereof, which is incorporated herein by reference.
Security Ownership of Certain Beneficial Owners and Management
The following table and accompanying footnotes sets forth information known to us regarding the beneficial ownership of Oklo Class A common stock following the consummation of the Business Combination by:
| · | each person who is known to be the beneficial owner of more than 5% of the outstanding shares of Oklo Class A common stock; |
| · | each of our current named executive officers and directors; and |
| · | all of our current executive officers and directors as a group. |
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. Unless otherwise indicated, we believe that each person named in the table below has sole voting and investment power with respect to the voting securities beneficially owned by them.
The beneficial ownership Oklo Class A common stock is based on 122,096,270 shares of Oklo Class A common stock issued and outstanding immediately following consummation of the Business Combination.
Name and Address of Beneficial Owner(1) | Number of Shares | % of Ownership | ||||||
| 5% Holders | ||||||||
| AltC Sponsor LLC(2)(3) | 13,950,000 | 11.43 | % | |||||
| Data Collective IV, L.P.(4) | 6,920,804 | 5.67 | % | |||||
| Mithril II, L.P.(5) | 6,510,297 | 5.33 | % | |||||
| Directors and Named Executive Officers | ||||||||
| Sam Altman(6) | 3,151,379 | 2.58 | % | |||||
| Jacob DeWitte | 11,190,452 | 9.17 | % | |||||
| Caroline Cochran | 10,911,600 | 8.94 | % | |||||
| Michael Klein(2)(3) | 13,950,000 | 11.43 | % | |||||
| Richard W. Kinzley | — | — | ||||||
| R. Craig Bealmear | — | — | ||||||
| Lieutenant General (Ret.) John Jansen | — | — | ||||||
| Chris Wright | — | — | ||||||
| All directors and executive officers as a group (8 individuals) | 39,203,431 | 32.11 | % | |||||
| * | Less than 1%. |
| (1) | Unless otherwise noted, the business address of each of the following entities or individuals is c/o Oklo Inc., 3190 Coronado Dr., Santa Clara, CA 95054. |
| (2) | Michael Klein is the controlling stockholder of M. Klein Associates, Inc., which is the managing member of AltC Sponsor LLC. The shares beneficially owned by AltC Sponsor LLC may also be deemed to be beneficially owned by Mr. Klein. |
| (3) | At the Closing, all 12,500,000 AltC founder shares held by the Sponsor were converted into shares of Oklo Class A common stock on a 1-for-1 basis and unvested. The 12,500,000 shares of Oklo Class A common stock that were unvested at the Closing will vest upon the occurrence of the Vesting Triggering Events or a Sale during the Vesting Period. Any unvested shares that do not vest during the Vesting Period will be forfeited to the Company for no consideration. |
| (4) | Data Collective IV GP, LLC (“DCGP”) is the general partner of Data Collective IV, L.P. (“DCIV”). Zachary Bogue and Matthew Ocko are the managing members of DCGP and exercise voting and dispositive power over the shares held by DCIV and therefore may be deemed to share beneficial ownership of such shares. The business address of this stockholder is 270 University Ave., Palo Alto, CA 94301. |
| (5) | Mithril II UGP LLC is the general partner of Mithril II GP LP, which is the general partner of Mithril II, L.P. and each of Mithril II UGP LLC and Mithril II GP LP may be deemed to have shared voting, investment and dispositive power with respect to the securities held by Mithril II, L.P. Ajay Royan is the sole managing member of Mithril II UGP LLC. Ajay Royan and Peter Thiel are the members of the investment committee of Mithril II GP LP, which makes all investment decisions with respect to the shares held by Mithril II, L.P., and may be deemed to have shared voting, investment and dispositive power with respect to the securities held by Mithril II, L.P. The address of the principal offices of each of these entities is c/o Mithril Capital Management LLC, 600 Congress Avenue, Suite 3100, Austin, TX 78701. |
| (6) | Includes 3,151,379 shares of Oklo Class A common stock held by Hydrazine Capital II, L.P. Mr. Altman has sole voting and investment power over the shares held by Hydrazine Capital II, L.P. and therefore may be deemed to have beneficial ownership over such shares. |
Directors and Executive Officers
The information set forth in Item 5.02 of this Report is incorporated herein by reference.
Upon the consummation of the transactions contemplated by the Merger Agreement and documents related thereto, and in accordance with the terms of the Merger Agreement, each executive officer of AltC ceased serving in such capacities, and each of Francis Frei, Allison Green, Peter Lattman and John L. Thornton ceased serving on AltC’s board of directors.
Jacob DeWitte, Caroline Cochran, Sam Altman, Lieutenant General (Ret.) John Jansen, Richard W. Kinzley, Michael Klein and Chris Wright were elected as directors of the Company by the holders of AltC Class A common stock at the Special Meeting, effective immediately upon the Closing, in each case, until their respective successor is duly elected and qualified, or until their earlier resignation, removal or death.
Lieutenant General Jansen, Mr. Kinzley and Mr. Wright were appointed to serve on the Audit Committee of the Board, and Mr. Kinzley qualifies as an audit committee financial expert, as such term is defined in Item 407(d)(5) of Regulation S-K.
Mr. Kinzley, Mr. Wright and Lieutenant General Jansen were appointed to serve on the Compensation Committee of the Board.
Mr. Altman and Mr. Klein were appointed to serve on the Nominating and Corporate Governance Committee of the Board.
Jacob DeWitte was appointed as Oklo’s Chief Executive Officer, Caroline Cochran was appointed as Oklo’s Chief Operating Officer and R. Craig Bealmear was appointed as Oklo’s Chief Financial Officer.
Oklo’s directors and executive officers after the consummation of the Business Combination are described in the Proxy Statement/Prospectus/Consent Solicitation in the section titled “Management After the Business Combination,” beginning on page 287 thereof, and that information is incorporated herein by reference.
Executive Compensation
The executive compensation of Oklo’s executive officers is described in the Proxy Statement/Prospectus/Consent Solicitation in the section titled “Executive Compensation,” beginning on page 282 thereof, and that information is incorporated herein by reference.
Certain Relationships and Related Transactions
Certain relationships and related party transactions of Oklo are described in the Proxy Statement/Prospectus/Consent Solicitation in the section titled “Certain Relationships and Related Party Transactions,” beginning on page 337 thereof, and are incorporated herein by reference.
Director Independence
Information regarding director independence is described in the Proxy Statement/Prospectus/Consent Solicitation in the section titled “Management After the Business Combination—Director Independence,” beginning on page 290 thereof, and is incorporated herein by reference.
Legal Proceedings
Reference is made to the disclosure regarding legal proceedings in the section of the Proxy Statement/Prospectus/Consent Solicitation titled “Information about Oklo—Legal Proceedings,” beginning on page 269 thereof, which is incorporated herein by reference.
Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters
On May 10, 2024, Oklo’s Class A common stock commenced trading on the NYSE under the symbol “OKLO” and shares of AltC Class A common stock ceased trading on the NYSE. It is the present intention of the Board to retain all earnings, if any, for use in Oklo’s business operations and, accordingly, the Board does not anticipate declaring any dividends in the foreseeable future. The payment of cash dividends in the future will be dependent upon Oklo’s revenues and earnings, if any, capital requirements and general financial condition. The payment of any cash dividends is within the discretion of the Board. Further, the ability of Oklo to declare dividends may be limited by the terms of financing or other agreements, and other agreements entered into by Oklo or its subsidiaries from time to time.
Information regarding AltC Class A common stock and related stockholder matters are described in the Proxy Statement/Prospectus/Consent Solicitation in the section titled “Price Range of Securities and Dividends” on page 328 thereof, and such information is incorporated herein by reference.
Recent Sales of Unregistered Securities
Information regarding Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), and its use by former shell companies is set forth in the Proxy Statement/Prospectus/Consent Solicitation in the section titled “Securities Act Restrictions on Resale of AltC’s Securities” on page 341 thereof, and is incorporated herein by reference.
Description of Registrant’s Securities
The description of Oklo’s securities is contained in the Proxy Statement/Prospectus/Consent Solicitation in the section titled “Description of Securities,” beginning on page 309 thereof, and is incorporated herein by reference. As described below, Oklo’s Second Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) was approved by AltC’s stockholders at the Special Meeting and became effective as of the Closing.
Indemnification of Directors and Officers
The indemnification of Oklo’s directors and officers is set forth in the Proxy Statement/Prospectus/Consent Solicitation in the section titled “Description of Securities—Limitations on Liability and Indemnification of Directors and Officers” on page 316 thereof, and is incorporated herein by reference.
Item 3.03. Material Modification to Rights of Security Holders.
The information set forth in Item 5.03 of this Report is incorporated herein by reference.
Item 5.01. Changes in Control of Registrant.
The information set forth above under “Introductory Note,” Item 1.01 and Item 2.01 of this Report is incorporated herein by reference.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The information set forth in the sections titled “Management After the Business Combination,” “Executive Compensation,” and “Certain Relationships and Related Person Transactions” in Item 2.01 of this Report is incorporated herein by reference.
Oklo Inc. 2024 Equity Incentive Plan and Oklo Inc. 2024 Employee Stock Purchase Plan
As previously disclosed, at the Special Meeting, the holders of AltC common stock considered and approved the Oklo Inc. 2024 Equity Incentive Plan (the “Incentive Plan”) and Oklo Inc. 2024 Employee Stock Purchase Plan (the “ESPP” and together with the Incentive Plan, the “Plans”), which became effective immediately upon the Closing. Descriptions of the Plans are included in the Proxy Statement/Prospectus/Consent Solicitation in the sections entitled “Proposal No. 4—The Incentive Plan Proposal” beginning on page 224 thereof and “Proposal No. 5—The ESPP Proposal” beginning on page 230 thereof, which are incorporated herein by reference.
Such descriptions are qualified in their entirety by reference to the full text of the Plans and applicable forms of award agreements, copies of which are attached hereto as Exhibit 10.3 and 10.4, and incorporated herein by reference.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
At the Special Meeting, the AltC stockholders considered and approved, among other things, the proposals set forth in the Proxy Statement/Prospectus/Consent Solicitation in the sections titled “Proposal No. 2—The Charter Proposal” and “Proposal No.3—The Governance Proposal” beginning on pages 219 and 221, respectively, of the Proxy Statement/Prospectus/Consent Solicitation.
The Certificate of Incorporation, which became effective upon filing with the Secretary of State of the State of Delaware on May 9, 2024, includes the amendments proposed by the Charter Proposal.
On May 9, 2024, the Board approved and adopted the Amended and Restated Bylaws of the Company (the “Bylaws”), which became effective upon the Closing.
The descriptions of the Certificate of Incorporation, the Bylaws and the general effect of the Certificate of Incorporation and the Bylaws upon the rights of holders of Oklo’s capital stock are included in the Proxy Statement/Prospectus/Consent Solicitation in the section titled “Proposal No. 2—The Charter Proposal,” beginning on page 196 thereof, which is incorporated herein by reference, and such descriptions are qualified in their entirety by reference to the full text of the Certificate of Incorporation and the Bylaws, which are attached hereto as Exhibit 3.1 and Exhibit 3.2, respectively, and are incorporated herein by reference.
Item 5.05. Amendments to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics.
In connection with the Closing, on May 10, 2024, the Board approved and adopted a new code of conduct applicable to all employees, officers and directors of the Company (the “Code of Conduct”). A copy of the Code of Conduct can be found on the Company’s website, https://www.oklo.com. The reference to the Company’s website address does not constitute incorporation by reference of the information contained at or available through the Company’s website, and you should not consider it to be a part of this Report.
The foregoing description of the Code of Conduct policy does not purport to be complete and is qualified in its entirety by reference to the full text of the Code of Conduct, which is filed as Exhibit 14.1 to this Report and is incorporated herein by reference.
Item 5.06. Change in Shell Company Status.
As a result of the Business Combination, the Company ceased being a shell company. Reference is made to the disclosure in the Proxy Statement/Prospectus/Consent Solicitation in the section titled “Proposal No. 1—The Business Combination Proposal,” beginning on page 152 thereof, which is incorporated herein by reference. Further, the information set forth in the Introductory Note and under Item 2.01 of this Report is incorporated herein by reference.
Item 8.01. Other Events.
As a result of the Business Combination, Oklo became the successor issuer to AltC. Pursuant to Rule 12g-3(a) under the Exchange Act, the shares of AltC Class A common stock that remained outstanding as Oklo Class A common stock after the Closing, and that were already registered under Section 12(b) of the Exchange Act prior to the Closing, are deemed registered under Section 12(b) of the Exchange Act.
Item 9.01. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
The audited financial statements of Legacy Oklo as of and for the years ended December 31, 2023 and 2022 and the related notes thereto are included in the Proxy Statement/Prospectus/Consent Solicitation, beginning on page F-2 thereof, and are incorporated herein by reference.
The unaudited financial statements of Legacy Oklo as of and for the three months ended March 31, 2024 and 2023 and the related notes thereto are set forth in Exhibit 99.1 hereto and are incorporated herein by reference.
(b) Pro forma financial information.
The unaudited pro forma condensed combined financial information of the Company as of March 31, 2024, and for the three months ended March 31, 2024 and the year ended December 31, 2023 is filed as Exhibit 99.3 to this Report and incorporated herein by reference.
(d) Exhibits.
| † | Certain of the annexes, exhibits and schedules to this Exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant hereby agrees to furnish a copy of any omitted annex, schedule or exhibit to the SEC upon request. |
| + | Indicates a management contract or compensatory plan. |
| * | Certain portions of this exhibit (indicated by “[***]”) have been omitted pursuant to Item 601(b)(10) of Regulation S-K. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Oklo Inc. | ||
| Date: May 13, 2024 | By: | /s/ R. Craig Bealmear |
| Name: | R. Craig Bealmear | |
| Title: | Chief Financial Officer | |
EXHIBIT 3.1
ALTC ACQUISITION CORP.
SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
AltC Acquisition Corp. a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:
1. The present name of the corporation is AltC Acquisition Corp. The date of the filing of its original certificate of incorporation (the “Original Certificate of Incorporation”) with the Secretary of State of the State of Delaware was February 1, 2021, under the name “Churchill Capital Corp VIII”. The Original Certificate of Incorporation was amended on February 24, 2021, pursuant to which the name of the corporation was changed to “AltC Acquisition Corp.”. The Original Certificate of Incorporation, as amended, has previously been amended and restated on July 12, 2021 (the “Amended and Restated Certificate of Incorporation”).
2. This Second Amended and Restated Certificate of Incorporation (as may be amended and/or restated from time to time, including the terms of any Preferred Stock Designation (as defined below), this “Certificate of Incorporation”), which restates, integrates and further amends the Amended and Restated Certificate of Incorporation, has been duly adopted by AltC Acquisition Corp. in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware or any applicable successor act thereto, as the same may be amended from time to time (the “DGCL”) and has been adopted by the requisite vote of the stockholders of AltC Acquisition Corp.
3. The Amended and Restated Certificate of Incorporation is being amended and restated in connection with the transactions contemplated by that certain Agreement and Plan of Merger and Reorganization, dated as of July 11, 2023, by and among AltC Acquisition Corp., AltC Merger Sub, Inc. and Oklo Inc. (as amended, modified, supplemented or waived from time to time, the “Business Combination Agreement”). In connection with the transactions contemplated by the Business Combination Agreement, upon the Reclassification Effective Time (as defined below), (i) all shares of Class A common stock, par value $0.0001 per share, of AltC Acquisition Corp. issued and outstanding immediately prior to the Reclassification Effective Time will remain outstanding and (ii) and all shares of Class B common stock, par value $0.0001 per share, of AltC Acquisition Corp. issued and outstanding immediately prior to the Reclassification Effective Time shall be reclassified on a 1-for-1 basis into shares of Common Stock (as defined below), such that, at the Reclassification Effective Time, only shares of Common Stock shall be outstanding.
4. The Amended and Restated Certificate of Incorporation is hereby amended and restated in its entirety to read as follows:
First: The name of the corporation is Oklo Inc. (hereinafter called the “Corporation”).
Second: The address of the registered office of the Corporation in the State of Delaware is 850 New Burton Road, Suite 201, Dover, County of Kent, State of Delaware, 19904. The name of the registered agent of the Corporation in the State of Delaware at such address is Cogency Global Inc.
Third: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized and incorporated under the DGCL.
Fourth: The total number of shares of all classes of capital stock that the Corporation is authorized to issue is 501,000,000 shares, consisting of (i) 500,000,000 shares of Class A common stock, par value $0.0001 per share (the “Common Stock”) and (ii) 1,000,000 shares of preferred stock, par value $0.0001 per share (the “Preferred Stock”). Subject to the special rights of holders of any outstanding series of Preferred Stock, the number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2).
Immediately upon the effectiveness of the filing of this Certificate of Incorporation with the Secretary of State of the State of Delaware (the “Reclassification Effective Time”), (i) each share of the Corporation’s Class A Common Stock, $0.0001 par value per share, issued and outstanding immediately prior to the Reclassification Effective Time (the “Old Class A Common Stock”) shall remain outstanding as one (1) share of Common Stock, and (ii) each share of the Corporation’s Class B Common Stock, $0.0001 par value per share, issued and outstanding immediately prior to the Reclassification Effective Time (together with the Old Class A Common Stock, the “Old Common Stock”) will be reclassified on a one-for-one basis as one (1) share of Common Stock (the “Reclassification”). Each person registered on the Corporation’s books as the owner of any share or shares of Old Common Stock will be registered on the Corporation’s books as the owner of the share or shares of Common Stock. Any stock certificate that immediately prior to the Reclassification Effective Time represented a number of shares of Old Common Stock will, from and after the Reclassification Effective Time, be deemed to represent an equivalent number of shares of Common Stock, without the need for surrender or exchange thereof; provided, however, that any person holding of record a stock certificate or certificates that represented shares of Old Common Stock will be entitled to receive, upon surrender of such certificate or certificates, or appropriate evidence of loss thereof as will be reasonably required by the Corporation, a new certificate or certificates evidencing and representing the number of shares of Common Stock to which such person is entitled.
A. Common Stock. The powers, preferences and relative participating, optional or other special rights, and the qualifications, limitations and restrictions of the Common Stock are as follows:
1. Ranking. The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights of the holders of the Preferred Stock of any series as may be designated by the Board of Directors of the Corporation (the “Board”) upon any issuance of the Preferred Stock of any series.
2. Voting. Except as otherwise provided by law or by this Certificate of Incorporation (including any Preferred Stock Designation), the holders of outstanding shares of Common Stock shall have one vote for each share of Common Stock held of record by such holder as of the applicable record date on any matter that is properly submitted to the stockholders of the Corporation, including the election or removal of directors. Notwithstanding any other provision of this Certificate of Incorporation to the contrary, the holders of Common Stock shall not be entitled to vote on any amendment to this Certificate of Incorporation (including any Preferred Stock Designation) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon pursuant to this Certificate of Incorporation (including any Preferred Stock Designation) or the DGCL.
3. Dividends. Subject to the special rights of holders of any outstanding series of Preferred Stock, holders of shares of Common Stock shall be entitled to receive such dividends and distributions and other distributions in cash, stock or property of the Corporation when, as and if declared thereon by the Board from time to time out of assets or funds of the Corporation legally available therefor.
4. Liquidation. Subject to the special rights of holders of any outstanding series of Preferred Stock, holders of shares of Common Stock shall be entitled to receive the assets of the Corporation available for distribution to its stockholders in the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary. A liquidation, dissolution or winding up of the affairs of the Corporation, as such terms are used in this Section A(4), shall not be deemed to be occasioned by or to include any consolidation, conversion or merger of the Corporation with or into any other person or a sale, lease, exclusive license, exchange, conveyance or other disposition of all or a part of its assets.
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B. Preferred Stock.
Shares of Preferred Stock may be issued from time to time in one or more series. The Board is hereby authorized to provide by resolution or resolutions from time to time for the issuance, out of the authorized but unissued shares of Preferred Stock, of one or more series of Preferred Stock, without stockholder approval, by filing a certificate of designation pursuant to the applicable law of the State of Delaware (any such certificate, a “Preferred Stock Designation”), setting forth such resolution and, with respect to each such series, establishing the number of shares to be included in such series, and fixing the voting powers, full or limited, or no voting power of the shares of such series, and the designation, preferences and relative, participating, optional or other special rights, if any, of the shares of each such series and any qualifications, limitations or restrictions thereof. The powers, designation, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations and restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. The authority of the Board with respect to each series of Preferred Stock shall include, but not be limited to, the determination of the following:
(a) the designation of the series, which may be by distinguishing number, letter or title;
(b) the number of shares of the series, which number the Board may thereafter (except where otherwise provided in the relevant Preferred Stock Designation or in this Certificate of Incorporation) increase or decrease (but not below the number of shares thereof then outstanding);
(c) the amounts or rates at which dividends will be payable on, and the preferences, if any, of shares of the series in respect of dividends, and whether such dividends, if any, shall be cumulative or noncumulative;
(d) the dates on which dividends, if any, shall be payable;
(e) the redemption rights and price or prices, if any, for shares of the series;
(f) the terms and amount of any sinking fund, if any, provided for the purchase or redemption of shares of the series;
(g) the amounts payable on, and the preferences, if any, of shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation or upon the occurrence of any other event;
(h) whether the shares of the series shall be convertible into or exchangeable for, shares of any other class or series, or any other security, of the Corporation or any other corporation, and, if so, the specification of such other class or series or such other security, the conversion or exchange price or prices or rate or rates, any adjustments thereof, the date or dates at which such shares shall be convertible or exchangeable and all other terms and conditions upon which such conversion or exchange may be made;
(i) restrictions on the issuance or reissuance of shares of the same series or any other class or series;
(j) the voting rights, if any, of the holders of shares of the series generally or upon specified events; and
(k) any other powers, preferences and relative, participating, optional or other special rights of each series of Preferred Stock, and any qualifications, limitations or restrictions of such shares, all as may be determined from time to time by the Board and stated in the resolution or resolutions providing for the issuance of such Preferred Stock.
Without limiting the generality of the foregoing, the resolutions providing for issuance of any series of Preferred Stock may provide that such series shall be superior or rank equally or be junior to any other series of Preferred Stock to the extent permitted by law.
Fifth: This Article FIFTH is inserted for the management of the business and for the conduct of the affairs of the Corporation.
A. General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board, except as otherwise provided by this Certificate of Incorporation or the DGCL.
B. Number of Directors; Election of Directors. Subject to the special rights of holders of any outstanding series of Preferred Stock to elect directors, the number of directors of the Corporation as of the date of this Certificate of Incorporation shall be seven and, thereafter, shall exclusively be fixed from time to time by resolution of the majority of the Whole Board. For purposes of this Certificate of Incorporation, the term “Whole Board” means the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships. No decrease in the number of directors constituting the Board shall shorten the term of any incumbent director. There shall be no cumulative voting in the election of directors.
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C. Classes of Directors. Subject to the special rights of holders of any outstanding series of Preferred Stock to elect directors, the Board shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one third of the total number of directors constituting the Whole Board. The Board is authorized to assign members of the Board already in office to Class I, Class II or Class III at the time such classification becomes effective.
D. Terms of Office. Subject to the special rights of holders of any outstanding series of Preferred Stock to elect directors, each director shall serve for a term ending on the date of the third annual meeting of stockholders following the annual meeting of stockholders at which such director was elected; provided that each director initially assigned to Class I shall serve for a term expiring at the Corporation’s first annual meeting of stockholders held after the effectiveness of this Certificate of Incorporation; each director initially assigned to Class II shall serve for a term expiring at the Corporation’s second annual meeting of stockholders held after the effectiveness of this Certificate of Incorporation; and each director initially assigned to Class III shall serve for a term expiring at the Corporation’s third annual meeting of stockholders held after the effectiveness of this Certificate of Incorporation; provided further, that the term of each director shall continue until the election and qualification of such director’s successor and be subject to such director’s earlier death, disqualification, resignation or removal.
E. Newly Created Directorships and Vacancies. Subject to the special rights of holders of any outstanding series of Preferred Stock, any newly created directorship that results from an increase in the number of directors or any vacancy on the Board that results from the death, resignation, disqualification or removal of any director or from any other cause shall be filled solely by the affirmative vote of a majority of the directors then in office, even if less than a quorum, or by a sole remaining director, and shall not be filled by the stockholders. Any increase or decrease in the number of directors shall be apportioned among the classes of the Board so as to maintain the number of directors in each class as nearly equal as possible. Any director elected to fill a vacancy or newly created directorship shall hold office until the next election of the class to which such director shall have been appointed or assigned, and until such director’s successor is duly elected and qualified, subject to such director’s earlier death, disqualification, resignation or removal.
F. Preferred Directors. During any period when the holders of any outstanding series of Preferred Stock have the special right to elect additional directors, upon commencement and for the duration of such period during which such right continues: (i) the number of directors comprising the Whole Board shall automatically be increased by such specified number of additional directors, and the holders of such series of Preferred Stock shall be entitled to elect the additional directors so provided for or fixed pursuant to this Certificate of Incorporation (including any Preferred Stock Designation); and (ii) each such additional director shall serve until such director’s successor shall have been duly elected and qualified, or until such director’s right to hold such office terminates pursuant to the Preferred Stock Designation establishing such series of Preferred Stock, whichever occurs earlier, subject to such director’s earlier death, resignation, disqualification or removal. Except as otherwise provided by this Certificate of Incorporation, whenever the holders of any series of Preferred Stock having the special right to elect additional directors are divested of such right pursuant to this Certificate of Incorporation (including any Preferred Stock Designation), the terms of office of all such additional directors elected by the holders of such series, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors, shall automatically terminate, and any such director shall thereupon cease to be qualified as, and shall cease to be, a director, and the total number of directors comprising the Whole Board shall automatically be reduced accordingly.
G. Removal. Subject to the special rights of holders of any outstanding series of Preferred Stock, any director or the entire Board may be removed from office at any time, but only for cause (so long as the Board is classified) and only by the affirmative vote of the holders of at least a majority in voting power of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.
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H. Committees. Pursuant to the Amended and Restated Bylaws of the Corporation, as the same may be amended and restated from time to time (the “Bylaws”), the Board may establish one or more committees to which may be delegated any or all of the powers and duties of the Board to the full extent permitted by law.
I. Stockholder Nominations and Introduction of Business. Advance notice of stockholder nominations for election of directors and other business to be brought by stockholders before a meeting of stockholders shall be given in the manner provided by the Bylaws.
Sixth: Unless and except to the extent that the Bylaws shall so require, the election of directors of the Corporation need not be by written ballot.
Seventh: To the fullest extent permitted by applicable law, as the same exists or as may hereafter be amended from time to time, no director or officer of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, as the case may be. Without limiting the effect of the preceding sentence, if the DGCL is hereafter amended to authorize the further elimination or limitation of the liability of a director or officer, then the liability of a director or officer to the Corporation shall be automatically eliminated or limited to the fullest extent permitted by the DGCL as so amended.
Any amendment, repeal or modification of the foregoing provisions of this Article SEVENTH by the stockholders of the Corporation shall not adversely affect any right or protection of a director or officer of the Corporation existing at the time of, or increase the liability of any director or officer of the Corporation with respect to any acts or omissions of such director occurring prior to, such amendment, repeal or modification.
Eighth: To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers, employees and agents of the Corporation (and any other persons to which the DGCL permits the Corporation to provide indemnification or advancement of expenses) through Bylaw provisions, agreements with such persons, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the DGCL.
Any amendment, repeal or modification of the foregoing provisions of this Article EIGHTH shall not adversely affect any right or protection of a director, officer, employee, agent or other person existing at the time of, or increase the liability of any such person with respect to any acts or omissions of such person occurring prior to, such amendment, repeal or modification.
Ninth: Subject to the terms of any series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be effected at an annual or special meeting of the stockholders called in accordance with the Bylaws and may not be effected by consent in lieu of a meeting of stockholders.
Tenth: Except as otherwise required by law and subject to the terms of any series of Preferred Stock, special meetings of stockholders for any purpose or purposes may be called at any time by the majority of the Whole Board, the Chair of the Board or the Chief Executive Officer of the Corporation and may not be called by any other person or persons. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice for such meeting.
Eleventh: If any provision or provisions of this Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Certificate of Incorporation (including, without limitation, each portion of any paragraph of this Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (ii) to the fullest extent possible, the provisions of this Certificate of Incorporation (including, without limitation, each such portion of any paragraph of this Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service or for the benefit of the Corporation to the fullest extent permitted by law.
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The Corporation reserves the right at any time from time to time to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, and any other provisions authorized by the DGCL may be added or inserted, in the manner now or hereafter prescribed by law; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to the right reserved in this Article ELEVENTH. Notwithstanding any other provision of this Certificate of Incorporation or any provision of law that might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of any class or series of the outstanding shares of the capital stock of the Corporation required by law, by this Certificate of Incorporation or by any Preferred Stock Designation, the affirmative vote of the holders of at least 66 2∕3% in voting power of the outstanding shares of the capital stock of the Corporation entitled to vote thereon shall be required to amend, alter, change or repeal, or adopt any provision inconsistent with, any of Article FIFTH, Article SEVENTH, Article EIGHTH, Article NINTH, Article TENTH, Article TWELFTH, Article THIRTEENTH, and this sentence of this Certificate of Incorporation, or in each case, the definition of any capitalized terms used therein or any successor provision (including, without limitation, any such article or section as renumbered as a result of any amendment, alteration, change, repeal or adoption of any other provision of this Certificate of Incorporation).
Twelfth: In furtherance and not in limitation of the powers conferred upon it by law, the Board is expressly authorized and empowered to adopt, amend and repeal the Bylaws by the affirmative vote of a majority of the Whole Board without any action on the part of the stockholders. Notwithstanding any other provision of this Certificate of Incorporation or any provision of law that might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of any class or series of the outstanding shares of the capital stock of the Corporation required by law, by this Certificate of Incorporation or by any Preferred Stock Designation, the stockholders may also amend, alter or repeal the Bylaws or adopt new bylaws by the affirmative vote of the holders of at least 66 2∕3% in voting power of the outstanding shares of the capital stock of the Corporation entitled to vote thereon.
Thirteenth:
A. Forum Selection.
(a) Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (the “Court of Chancery”) (or, if the Court of Chancery does not have jurisdiction, the state or federal courts in the State of Delaware) and any appellate court thereof shall, to the fullest extent permitted by law, be the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of the Corporation, (2) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, stockholder or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (3) any action arising pursuant to any provision of the DGCL or this Certificate of Incorporation or the Bylaws, (4) any action asserting a claim against the Corporation or any current or former director or officer or other employee of the Corporation governed by the internal affairs doctrine, or (5) any action as to which the DGCL confers jurisdiction on the Court of Chancery, except for any action asserted to enforce any liability or duty created by the Securities Exchange Act of 1934, as amended, or, in each case, rules and regulations promulgated thereunder, for which there is exclusive federal jurisdiction.
(b) Unless the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended.
B. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article THIRTEENTH.
C. Personal Jurisdiction. If any action the subject matter of which is within the scope of Section A immediately above is filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the applicable state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce Section A immediately above (an “FSC Enforcement Action”) and (ii) having service of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, ALTC ACQUISITION CORP. has caused this Second Amended and Restated Certificate of Incorporation to be duly executed and acknowledged in its name and on its behalf by an authorized officer on this 9th day of May, 2024.
| ALTC ACQUISITION CORP. | ||
| By: | /s/ Jay Taragin | |
| Name: | Jay Taragin | |
| Title: | Chief Financial Officer | |
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EXHIBIT 3.2
OKLO INC.
(FORMALLY KNOWN AS ALTC ACQUISITION CORP.)
AMENDED AND RESTATED BYLAWS
(as adopted and effective as of May 9, 2024)
TABLE OF CONTENTS
| Page | |||
| ARTICLE I STOCKHOLDERS | 1 | ||
| 1.1 | Place of Meetings | 1 | |
| 1.2 | Annual Meeting | 1 | |
| 1.3 | Special Meetings | 1 | |
| 1.4 | Notice of Meetings | 1 | |
| 1.5 | Voting List | 1 | |
| 1.6 | Quorum | 2 | |
| 1.7 | Adjournments | 2 | |
| 1.8 | Voting and Proxies | 2 | |
| 1.9 | Action at Meeting | 3 | |
| 1.10 | Nomination of Directors | 3 | |
| 1.11 | Notice of Business at Annual Meetings | 6 | |
| 1.12 | Conduct of Meetings | 8 | |
| ARTICLE II DIRECTORS | 9 | ||
| 2.1 | General Powers | 9 | |
| 2.2 | Number, Election and Qualification | 9 | |
| 2.3 | Chair of the Board; Vice Chair of the Board | 9 | |
| 2.4 | Classes of Directors | 9 | |
| 2.5 | Terms of Office | 9 | |
| 2.6 | Quorum | 9 | |
| 2.7 | Action at Meeting | 9 | |
| 2.8 | Removal | 9 | |
| 2.9 | Vacancies | 9 | |
| 2.10 | Resignation | 10 | |
| 2.11 | Regular Meetings | 10 | |
| 2.12 | Special Meetings | 10 | |
| 2.13 | Notice of Special Meetings | 10 | |
| 2.14 | Meetings by Conference Communications Equipment | 10 | |
| 2.15 | Action by Consent | 10 | |
| 2.16 | Committees | 10 | |
| 2.17 | Compensation of Directors | 10 | |
| ARTICLE III OFFICERS | 11 | ||
| 3.1 | Titles | 11 | |
| 3.2 | Appointment | 11 | |
| 3.3 | Qualification | 11 | |
| 3.4 | Tenure | 11 | |
| 3.5 | Removal; Resignation | 11 | |
| 3.6 | Vacancies | 11 | |
| 3.7 | President; Chief Executive Officer | 11 | |
| 3.8 | Chief Financial Officer | 11 | |
| 3.9 | Vice Presidents | 12 | |
| 3.10 | Secretary and Assistant Secretaries | 12 | |
| 3.11 | Salaries | 12 | |
| 3.12 | Delegation of Authority | 12 | |
| 3.13 | Execution of Contracts | 12 | |
| ARTICLE IV CAPITAL STOCK | 12 | ||
| 4.1 | Capital Stock Certificates; Uncertificated Shares | 12 | |
| 4.2 | Transfers | 12 | |
| 4.3 | Lost, Stolen or Destroyed Certificates | 13 | |
| 4.4 | Record Date | 13 | |
| 4.5 | Regulations | 13 | |
| 4.6 | Dividends | 13 | |
| ARTICLE V GENERAL PROVISIONS | 13 | ||
| 5.1 | Fiscal Year | 13 | |
| 5.2 | Corporate Seal | 13 | |
| 5.3 | Waiver of Notice | 13 | |
| 5.4 | Voting of Securities | 13 | |
| 5.5 | Evidence of Authority | 14 | |
| 5.6 | Certificate of Incorporation | 14 | |
| 5.7 | Severability | 14 | |
| 5.8 | Pronouns | 14 | |
| 5.9 | Electronic Transmission | 14 | |
| ARTICLE VI AMENDMENTS | 14 | ||
| ARTICLE VII INDEMNIFICATION AND ADVANCEMENT | 14 | ||
| 7.1 | Power to Indemnify in Actions, Suits or Proceedings other than Those by or in the Right of the Corporation | 14 | |
| 7.2 | Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation | 15 | |
| 7.3 | Authorization of Indemnification | 15 | |
| 7.4 | Good Faith Defined | 15 | |
| 7.5 | Right of Claimant to Bring Suit | 15 | |
| 7.6 | Expenses Payable in Advance | 16 | |
| 7.7 | Nonexclusivity of Indemnification and Advancement of Expenses | 16 | |
| 7.8 | Insurance | 16 | |
| 7.9 | Certain Definitions | 16 | |
| 7.10 | Survival of Indemnification and Advancement of Expenses | 16 | |
| 7.11 | Limitation on Indemnification | 17 | |
| 7.12 | Contract Rights | 17 | |
ARTICLE I
STOCKHOLDERS
1.1 Place of Meetings. All meetings of stockholders shall be held at such place, if any, as may be designated from time to time by the Board of Directors (the “Board”) of Oklo Inc. (the “Corporation”), the Chair of the Board, the Chief Executive Officer of the Corporation (the “Chief Executive Officer”) or the President of the Corporation (the “President”) or, if not so designated, at the principal executive office of the Corporation. The Board may, in its sole discretion, determine that a meeting shall not be held at any place, but may instead be held solely by means of remote communication in accordance with Section 211(a) of the General Corporation Law of the State of Delaware or any applicable successor act thereto, as the same may be amended from time to time (the “DGCL”).
1.2 Annual Meeting. The annual meeting of stockholders for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly be brought before the meeting shall be held on a date and at a time designated by the Board, the Chair of the Board, the Chief Executive Officer or the President (which date shall not be a legal holiday in the place, if any, where the meeting is to be held). The Board acting pursuant to a resolution adopted by the majority of the Whole Board (as defined below) may postpone, reschedule or cancel any previously scheduled annual meeting of stockholders, before or after the notice for such meeting has been sent to the stockholders. For purposes of these Amended and Restated Bylaws (these “Bylaws”), the term “Whole Board” will mean the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships.
1.3 Special Meetings. Special meetings of stockholders for any purpose or purposes may be called at any time by a resolution adopted by the majority of the Whole Board, the Chair of the Board or the Chief Executive Officer, and may not be called by any other person or persons. The Board acting pursuant to a resolution adopted by the majority of the Whole Board may postpone, reschedule or cancel any previously scheduled special meeting of stockholders, before or after the notice for such meeting has been sent to the stockholders. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.
1.4 Notice of Meetings. Except as otherwise provided by law, notice of each meeting of stockholders, whether annual or special, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of the meeting. Without limiting the manner by which notice otherwise may be given to stockholders, any notice shall be effective if given by a form of electronic transmission consented to (in a manner consistent with the DGCL) by the stockholder to whom the notice is given. The notices of all meetings shall state the place, if any, date and time of the meeting, the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, and the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting). The notice of a special meeting shall state, in addition, the purpose or purposes for which the meeting is called. If notice is given by mail, such notice shall be deemed given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation. If notice is given by electronic transmission, such notice shall be deemed given at the time specified in Section 232 of the DGCL.
1.5 Voting List. The Secretary of the Corporation (the “Secretary”) shall prepare and make, no later than the tenth (10th) day before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting (provided, however, if the record date for determining the stockholders entitled to vote is less than ten (10) days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date), arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, for a period of at least ten (10) days prior to the meeting: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the Corporation. The Corporation shall not be required to include electronic mail addresses or other electronic contact information on such list. In the event that the Corporation determines to make the list available on an electronic network, the Corporation is authorized to take reasonable steps to ensure that such information is available only to stockholders of the Corporation. Except as otherwise provided by law, the list shall be the only evidence as to the identity of the stockholders entitled to examine the list of stockholders required by this Section 1.5 or entitled to vote in person or by proxy at the meeting and the number of shares held by each such stockholder.
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1.6 Quorum. Except as otherwise provided by law, the Corporation’s Second Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) or these Bylaws, the holders of a majority in voting power of the shares of the capital stock of the Corporation issued and outstanding and entitled to vote at the meeting, present in person, present by means of remote communication in a manner, if any, authorized by the Board in its sole discretion, or represented by proxy, shall constitute a quorum for the transaction of business; provided, however, that where a separate vote by a class or classes or series of capital stock is required by law or the Certificate of Incorporation, the holders of a majority in voting power of the shares of such class or classes or series of the capital stock of the Corporation issued and outstanding and entitled to vote on such matter, present in person, present by means of remote communication in a manner, if any, authorized by the Board in its sole discretion, or represented by proxy, shall constitute a quorum entitled to take action with respect to the vote on such matter. A quorum, once established at a meeting, shall not be broken by the withdrawal of enough votes to leave less than a quorum.
If, however, such quorum is not present or represented at any meeting of the stockholders, then either (i) the chair of the meeting, or (ii) the holders of shares entitled to vote and present or represented at the meeting by a majority of votes cast shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting or given in any other manner permitted by Section 222 of the DGCL, until a quorum is present or represented. At any such adjourned meeting at which there is a quorum, any business may be transacted that might have been transacted at the meeting originally called.
1.7 Adjournments. Any meeting of stockholders, annual or special, that has been convened may be adjourned from time to time to any other time and to any other place at which a meeting of stockholders may be held under these Bylaws by the chair of the meeting or by the holders of the shares of stock representing a majority of the votes entitled to be cast at the meeting. When a meeting is adjourned to another time or place, including an adjournment taken to address a technical failure to convene a meeting using remote communication, notice need not be given of any such adjourned meeting if the date, time, and place, if any, thereof, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are (i) announced at the meeting at which the adjournment is taken, (ii) displayed during the time scheduled for the meeting, on the same electronic network used to enable stockholders and proxy holders to participate in the meeting by means of remote communication or (iii) set forth in the notice of meeting given pursuant to Section 1.4 and applicable law. If the adjournment is for more than thirty (30) days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for determination of stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix as the record date for determining stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record as of the record date so fixed for notice of such adjourned meeting. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting.
1.8 Voting and Proxies. Each stockholder shall have such number of votes, if any, for each share of capital stock entitled to vote and held of record by such stockholder as may be fixed in the Certificate of Incorporation and a proportionate vote for each fractional share so held, unless otherwise provided by law or the Certificate of Incorporation. Each stockholder of record entitled to vote at a meeting of stockholders may vote in person (including by means of remote communications, if any, by which stockholders may be deemed to be present in person and vote at such meeting) or may authorize another person or persons to vote for such stockholder by a proxy executed or transmitted in a manner permitted by applicable law. No such proxy shall be voted upon after three years from the date of its execution, unless the proxy expressly provides for a longer period. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212 of the DGCL. No stockholder shall have cumulative voting rights.
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1.9 Action at Meeting. When a quorum is present at any meeting, any matter other than the election of directors to be voted upon by the stockholders at such meeting shall be decided by the vote of the holders of shares of capital stock having a majority in voting power of the votes cast by the holders of all of the shares of capital stock present or represented at the meeting and voting affirmatively or negatively on such matter (or if there are two or more classes or series of capital stock entitled to vote as separate classes or series, then in the case of each such class or series, the holders of a majority in voting power of the shares of capital stock of the class, classes or series present or represented at the meeting and voting affirmatively or negatively on such matter), except when a different vote is required by applicable law, regulation applicable to the Corporation or its securities, the rules or regulations of any stock exchange applicable to the Corporation, the Certificate of Incorporation or these Bylaws. For the avoidance of doubt, neither abstentions nor broker non-votes will be counted as votes cast for or against such matter. Other than directors who may be elected by the holders of shares of any series of Preferred Stock (as defined below), voting as a separate series or together with one or more series, each director shall be elected by a plurality of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote generally on the election of directors. Voting at meetings of stockholders need not be by written ballot.
| 1.10 | Nomination of Directors. |
(a) Except for (1) any directors entitled to be elected by the holders of Preferred Stock, voting as a separate series or together with one or more series, (2) any directors appointed in accordance with Section 2.9 hereof by the Board to fill a vacancy or newly-created directorship or (3) as otherwise required by applicable law or stock exchange regulation, at any meeting of stockholders, only persons who are nominated in accordance with the procedures in this Section 1.10 shall be eligible for election or re-election as directors. Nomination for election to the Board at a meeting of stockholders may be made (i) by or at the direction of the Board (or any committee thereof) or (ii) by any stockholder of the Corporation who (x) timely complies with the notice procedures in Section 1.10(b), (y) is a stockholder of record on the date of the giving of such notice and on the record date for the determination of stockholders entitled to vote at such meeting and (z) is entitled to vote at such meeting. The number of nominees a stockholder may nominate for election at a meeting of stockholders shall not exceed the number of directors to be elected at such meeting.
(b) To be timely, a stockholder’s notice must be received in writing by the Secretary at the principal executive offices of the Corporation as follows: (i) in the case of an election of directors at an annual meeting of stockholders, not less than ninety (90) days nor more than one hundred and twenty (120) days prior to the first anniversary of the preceding year’s annual meeting (which date shall, for the purposes of the annual meeting of stockholders of the Corporation to be held in 2025, be deemed to have occurred on June 8, 2024); provided, however, that in the event that the date of the annual meeting in any other year is advanced by more than thirty (30) days, or delayed by more than sixty (60) days, from the first anniversary of the preceding year’s annual meeting, a stockholder’s notice must be so received not earlier than the one hundred and twentieth (120th) day prior to such annual meeting and not later than the close of business on the later of (A) the ninetieth (90th) day prior to such annual meeting and (B) the tenth (10th) day following the day on which notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever first occurs; or (ii) in the case of an election of directors at a special meeting of stockholders, provided that the majority of the Whole Board, the Chair of the Board or the Chief Executive Officer has determined, in accordance with Section 1.3, that directors shall be elected at such special meeting and provided further that the nomination made by the stockholder is for one of the director positions that the Board, the Chair of the Board or the Chief Executive Officer, as the case may be, has determined will be filled at such special meeting, not earlier than the one hundred and fiftieth (150th) day prior to such special meeting and not later than the close of business on the later of (x) the one hundred and twentieth (120th) day prior to such special meeting and (y) the tenth (10th) day following the day on which notice of the date of such special meeting was mailed or public disclosure of the date of such special meeting was made, whichever first occurs. In no event shall the adjournment or postponement of a meeting (or the public disclosure thereof) commence a new time period (or extend any time period) for the giving of a stockholder’s notice.
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The stockholder’s notice to the Secretary shall set forth: (A) as to each proposed nominee (1) such person’s name, age, business address and, if known, residence address, (2) such person’s principal occupation or employment, (3) the class and series and number of shares of capital stock of the Corporation that are, directly or indirectly, owned, beneficially or of record, by such person, (4) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among (x) the stockholder, the beneficial owner, if any, on whose behalf the nomination is being made and the respective affiliates and associates of, or others known by such stockholder to be acting in concert with, such stockholder and such beneficial owner, on the one hand, and (y) each proposed nominee, and such nominee’s respective affiliates and associates, or others known by such stockholder to be acting in concert with such nominee(s), on the other hand, including all information that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated under the Securities Act of 1933, as amended, if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made or any affiliate or associate thereof or person known by such stockholder to be acting in concert therewith were the “registrant” for purposes of such Item and the proposed nominee were a director or executive officer of such registrant, (5) a description of any agreement, arrangement or understanding (including any derivative or short positions, swaps, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into by, or on behalf of, such proposed nominee, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such proposed nominee with respect to shares of capital stock of the Corporation, and (6) any other information concerning such person that must be disclosed as to nominees in proxy solicitations pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including the information required to be provided pursuant to Rule 14a-19 under the Exchange Act, if applicable; (B) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is being made (1) the name and address of such stockholder, as they appear on the Corporation’s books, of such beneficial owner, and any Stockholder Associated Person (as defined below), (2) the class and series and number of shares of capital stock of the Corporation that are, directly or indirectly, owned, beneficially or of record, by such stockholder, such beneficial owner and any Stockholder Associated Person, (3) a description of any agreement, arrangement or understanding between or among such stockholder, such beneficial owner and/or any Stockholder Associated Person and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are being made or who may participate in the solicitation of proxies in favor of electing such nominee(s), (4) a description of any agreement, arrangement or understanding (including any derivative or short positions, swaps, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into by, or on behalf of, such stockholder, such beneficial owner or any Stockholder Associated Person, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder, such beneficial owner or any Stockholder Associated Person with respect to shares of capital stock of the Corporation, (5) any other information relating to such stockholder, such beneficial owner and any Stockholder Associated Person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (6) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the person(s) named in its notice, (7) a representation whether such stockholder, such beneficial owner and/or such Stockholder Associated Person intends or is part of a group which intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock reasonably believed by such stockholder, such beneficial owner or such Stockholder Associated Person to be sufficient to elect the nominee, (y) otherwise to solicit proxies or votes from stockholders in support of such nomination, and/or (z) to solicit proxies in support of any proposed nominee in accordance with Rule 14a-19 promulgated under the Exchange Act, in which case such notice shall also include the information required by Rule 14a-19(b) under the Exchange Act, (8) a description of any proxy (other than a revocable proxy given in response to a public proxy solicitation made pursuant to, and in accordance with, the Exchange Act), agreement, arrangement, understanding or relationship pursuant to which such stockholder or beneficial owner has or shares a right, directly or indirectly, to vote any shares of any class or series of capital stock of the Corporation, (9) a description of any rights to dividends or other distributions on the shares of any class or series of capital stock of the Corporation, directly or indirectly, owned beneficially by such stockholder or beneficial owner that are separated or separable from the underlying shares of the Corporation, and (10) a description of any performance-related fees (other than an asset based fee) that such stockholder or beneficial owner, directly or indirectly, is entitled to be based on any increase or decrease in the value of shares of any class or series of capital stock of the Corporation or any interests described in clause (B)(4); and (C) the names and addresses of other stockholders and beneficial owners known by any stockholder giving the notice (and/or beneficial owner, if any, on whose behalf the nomination or proposal is made) to support such nomination or proposal, and to the extent known, the class and number of all shares of the Corporation’s capital stock owned beneficially and/or of record by such other stockholder(s) and beneficial owner(s). Such information provided and statements made as required by clauses (A), (B) and (C) above or otherwise by this Section 1.10 are hereinafter referred to as a “Nominee Solicitation Statement.” Not later than 10 days after the record date for determining stockholders entitled to notice of the meeting, the information required by Items (A)(1)-(5) and (B)(1)-(5) of the prior sentence shall be supplemented by the stockholder giving the notice to provide updated information as of such record date. In addition, to be effective, the stockholder’s notice must be accompanied by a written questionnaire with respect to the background and qualification of such proposed nominee (which questionnaire shall be provided by the Secretary upon written request) and the written consent of the proposed nominee to be named in the Corporation’s proxy statement as a nominee and to serve as a director if elected and a written statement executed by the proposed nominee acknowledging that as a director of the Corporation, the nominee will owe a fiduciary duty under Delaware law with respect to the Corporation and its stockholders. The Corporation may require any proposed nominee to furnish such other information as the Corporation may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee or whether such nominee would be independent under applicable Securities and Exchange Commission and stock exchange rules and the Corporation’s publicly disclosed corporate governance guidelines. A stockholder shall not have complied with this Section 1.10(b) if the stockholder (or beneficial owner, if any, on whose behalf the nomination is made) solicits or does not solicit, as the case may be, proxies or votes in support of such stockholder’s nominee in contravention of the representations with respect thereto required by this Section 1.10. For purposes of these Bylaws, a “Stockholder Associated Person” of any stockholder shall mean (i) any person controlling, directly or indirectly, or known by such stockholder to be acting in concert with, such stockholder, (ii) any beneficial owner of shares of capital stock of the Corporation owned of record or beneficially by such stockholder and on whose behalf the proposal or nomination, as the case may be, is being made, or (iii) any person controlling, controlled by or under common control with such person referred to in the preceding clauses (i) and (ii).
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Such notice must also be accompanied by a representation as to whether or not such stockholder, beneficial owner and/or any Stockholder Associated Person intends to solicit proxies in support of any director nominees other than the Corporation’s nominees in accordance with Rule 14a-19 under the Exchange Act, and, where such stockholder, beneficial owner and/or Stockholder Associated Person intends to so solicit proxies, the notice and information required by Rule 14a-19(b) under the Exchange Act. Notwithstanding anything to the contrary in these Bylaws, unless otherwise required by law, if any stockholder, beneficial owner and/or Stockholder Associated Person (i) provides notice pursuant to Rule 14a-19(b) under the Exchange Act and (ii) subsequently fails to comply with the requirements of Rule 14a-19(a)(2) and Rule 14a-19(a)(3) under the Exchange Act (or fails to timely provide reasonable evidence sufficient to satisfy the Corporation that such stockholder, beneficial owner and/or Stockholder Associated Person has met the requirements of Rule 14a-19(a)(3) promulgated under the Exchange Act in accordance with the following sentence), then the nomination of each of the director nominees proposed by such stockholder, beneficial owner and/or Stockholder Associated Person shall be disregarded, notwithstanding that proxies or votes in respect of the election of such proposed nominees may have been received by the Corporation (which proxies and votes shall be disregarded). Upon request by the Corporation, if any stockholder, beneficial owner and/or Stockholder Associated Person provides notice pursuant to Rule 14a-19(b) under the Exchange Act, such stockholder, beneficial owner and/or Stockholder Associated Person shall deliver to the Corporation, no later than five business days prior to the applicable meeting, reasonable evidence that it has met the requirements of Rule 14a-19(a)(3) under the Exchange Act.
(c) Without exception, no person shall be eligible for election or re-election as a director of the Corporation at a meeting of stockholders unless nominated in accordance with the provisions set forth in this Section 1.10. In addition, a nominee shall not be eligible for election or re-election if a stockholder or Stockholder Associated Person, as applicable, takes action contrary to the representations made in the Nominee Solicitation Statement applicable to such nominee or if the Nominee Solicitation Statement applicable to such nominee contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein not misleading. The chair of any meeting shall have the power and duty to determine whether a nomination was made in accordance with the provisions of this Section 1.10 (including the previous sentence of this Section 1.10(c)), and if the chair should determine that a nomination was not made in accordance with the provisions of this Section 1.10, the chair shall so declare to the meeting and such nomination shall not be brought before the meeting.
(d) Except as otherwise required by law (including Rule 14a-19 under the Exchange Act), nothing in this Section 1.10 shall obligate the Corporation or the Board to include in any proxy statement or other stockholder communication distributed on behalf of the Corporation or the Board information with respect to any nominee for director submitted by a stockholder.
(e) Notwithstanding the foregoing provisions of this Section 1.10, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the meeting to present a nomination, such nomination shall not be brought before the meeting, notwithstanding that proxies in respect of such nominee may have been received by the Corporation. For purposes of this Section 1.10, to be considered a “qualified representative of the stockholder”, a person must be authorized by a written instrument executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such written instrument or electronic transmission, or a reliable reproduction of the written instrument or electronic transmission, at the meeting of stockholders.
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(f) For purposes of this Section 1.10, “public disclosure” shall include disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(g) Notwithstanding the foregoing provisions of this Section 1.10, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder with respect to the matters set forth in this Section 1.10; provided, however, that any references in these Bylaws to the Exchange Act or the rules and regulations promulgated thereunder are not intended to and shall not limit any requirements applicable to nominations to be considered pursuant to this Section 1.10 (including paragraph (a)(ii) hereof), and compliance with paragraph (a)(ii) of this Section 1.10 shall be the exclusive means for a stockholder to make nominations. Nothing in this Section 1.10 shall be deemed to affect any rights of the holders of any series of Preferred Stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation.
| 1.11 | Notice of Business at Annual Meetings. |
(a) At any annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (1) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board, (2) otherwise properly brought before the meeting by or at the direction of the Board (or any committee thereof), or (3) properly brought before the annual meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, (i) if such business relates to the nomination of a person for election as a director of the Corporation, the procedures in Section 1.10 must be complied with and (ii) if such business relates to any other matter, the business must constitute a proper matter under Delaware law for stockholder action and the stockholder must (x) have given timely notice thereof in writing to the Secretary in accordance with the procedures in Section 1.11(b), (y) be a stockholder of record on the date of the giving of such notice and on the record date for the determination of stockholders entitled to vote at such annual meeting and (z) be entitled to vote at such annual meeting.
(b) To be timely, a stockholder’s notice must be received in writing by the Secretary at the principal executive offices of the Corporation not less than ninety (90) days nor more than one hundred and twenty (120) days prior to the first anniversary of the preceding year’s annual meeting (which date shall, for the purposes of the annual meeting of stockholders of the Corporation to be held in 2025, be deemed to have occurred on June 8, 2024); provided, however, that in the event that the date of the annual meeting in any other year is advanced by more than thirty (30) days, or delayed by more than seventy (70) days, from the first anniversary of the preceding year’s annual meeting, a stockholder’s notice must be so received not earlier than the one hundred and twentieth (120th) day prior to such annual meeting and not later than the close of business on the later of (A) the ninetieth (90th) day prior to such annual meeting and (B) the tenth (10th) day following the day on which notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever first occurs. In no event shall the adjournment or postponement of an annual meeting (or the public disclosure thereof) commence a new time period (or extend any time period) for the giving of a stockholder’s notice.
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The stockholder’s notice to the Secretary shall set forth: (A) as to each matter the stockholder proposes to bring before the annual meeting (1) a brief description of the business desired to be brought before the annual meeting, (2) the text of the proposal (including the exact text of any resolutions proposed for consideration and, in the event that such business includes a proposal to amend the Bylaws, the exact text of the proposed amendment), and (3) the reasons for conducting such business at the annual meeting, and (B) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is being made (1) the name and address of such stockholder, as they appear on the Corporation’s books, of such beneficial owner and of any Stockholder Associated Person, (2) the class and series and number of shares of capital stock of the Corporation that are, directly or indirectly, owned, beneficially or of record, by such stockholder, such beneficial owner and any Stockholder Associated Person, (3) a description of any material interest of such stockholder, such beneficial owner or any Stockholder Associated Person and the respective affiliates and associates of, or others known by such stockholder to be acting in concert with, such stockholder, such beneficial owner or any Stockholder Associated Person in such business, (4) a description of any agreement, arrangement or understanding between or among such stockholder, such beneficial owner and/or any Stockholder Associated Person and any other person or persons (including their names) in connection with the proposal of such business or who may participate in the solicitation of proxies in favor of such proposal, (5) a description of any agreement, arrangement or understanding (including any derivative or short positions, swaps, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into by, or on behalf of, such stockholder, such beneficial owner or any Stockholder Associated Person, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder, such beneficial owner or any Stockholder Associated Person with respect to shares of capital stock of the Corporation, (6) any other information relating to such stockholder, such beneficial owner and any Stockholder Associated Person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the business proposed pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (7) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting and (8) a representation whether such stockholder, such beneficial owner and/or any Stockholder Associated Person intends or is part of a group which intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt the proposal and/or (y) otherwise to solicit proxies or votes from stockholders in support of such proposal. Such information provided and statements made as required by clauses (A) and (B) above or otherwise by this Section 1.11 are hereinafter referred to as a “Business Solicitation Statement.” Not later than 10 days after the record date for determining stockholders entitled to notice of the meeting, the information required by Items (A)(3) and (B)(1)-(6) of the prior sentence shall be supplemented by the stockholder giving the notice to provide updated information as of such record date. Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at any annual meeting of stockholders except in accordance with the procedures in this Section 1.11; provided that any stockholder proposal which complies with Rule 14a-8 of the proxy rules (or any successor provision) promulgated under the Exchange Act and is to be included in the Corporation’s proxy statement for an annual meeting of stockholders shall be deemed to comply with the notice requirements of this Section 1.11. A stockholder shall not have complied with this Section 1.11(b) if the stockholder (or beneficial owner, if any, on whose behalf the proposal is made) solicits or does not solicit, as the case may be, proxies or votes in support of such stockholder’s proposal in contravention of the representations with respect thereto required by this Section 1.11.
(c) Without exception, no business shall be conducted at any annual meeting except in accordance with the provisions set forth in this Section 1.11. In addition, business proposed to be brought by a stockholder may not be brought before the annual meeting if such stockholder or a Stockholder Associated Person, as applicable, takes action contrary to the representations made in the Business Solicitation Statement applicable to such business or if the Business Solicitation Statement applicable to such business contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein not misleading. The chair of any annual meeting shall have the power and duty to determine whether business was properly brought before the annual meeting in accordance with the provisions of this Section 1.11 (including the previous sentence of this Section 1.11(c)), and if the chair should determine that business was not properly brought before the annual meeting in accordance with the provisions of this Section 1.11, the chair shall so declare to the meeting and such business shall not be brought before the annual meeting.
(d) Except as otherwise required by law, nothing in this Section 1.11 shall obligate the Corporation or the Board to include in any proxy statement or other stockholder communication distributed on behalf of the Corporation or the Board information with respect to any proposal submitted by a stockholder.
(e) Notwithstanding the foregoing provisions of this Section 1.11, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting to present business, such business shall not be considered, notwithstanding that proxies in respect of such business may have been received by the Corporation.
(f) For purposes of this Section 1.11, the terms “qualified representative of the stockholder” and “public disclosure” shall have the same meaning as in Section 1.10.
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(g) Notwithstanding the foregoing provisions of this Section 1.11, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder with respect to the matters set forth in this Section 1.11; provided, however, that any references in these Bylaws to the Exchange Act or the rules and regulations promulgated thereunder are not intended to and shall not limit any requirements applicable to proposals as to any business to be considered pursuant to this Section 1.11 (including paragraph (a)(3) hereof), and compliance with paragraph (a)(3) of this Section 1.11 shall be the exclusive means for a stockholder to submit business (other than, as provided in the penultimate sentence of (b), business other than nominations brought properly under and in compliance with Rule 14a-8 of the Exchange Act, as may be amended from time to time). Nothing in this Section 1.11 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to applicable rules and regulations promulgated under the Exchange Act.
| 1.12 | Conduct of Meetings. |
(a) Meetings of stockholders shall be presided over by the Chair of the Board, if any, or in the Chair’s absence by the Vice Chair of the Board, if any, or in the Vice Chair’s absence by the Chief Executive Officer, or in the Chief Executive Officer’s absence, by the President, or in the President’s absence by a Vice President of the Corporation (each, a “Vice President”), or in the absence of all of the foregoing persons by a chair designated by the Board. The Secretary shall act as secretary of the meeting, but in the Secretary’s absence the chair of the meeting may appoint any person to act as secretary of the meeting.
(b) The Board may adopt by resolution such rules, regulations and procedures for the conduct of any meeting of stockholders of the Corporation as it shall deem appropriate including, without limitation, such guidelines and procedures as it may deem appropriate regarding the participation by means of remote communication of stockholders and proxyholders not physically present at a meeting. Except to the extent inconsistent with these Bylaws or such rules, regulations and procedures as adopted by the Board, the chair of any meeting of stockholders shall have the right and authority to convene and (for any or no reason) to recess and/or adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chair, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chair of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as shall be determined; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board or the chair of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.
(c) The chair of the meeting shall announce at the meeting when the polls for each matter to be voted upon at the meeting will be opened and closed. After the polls close, no ballots, proxies or votes or any revocations or changes thereto may be accepted.
(d) In advance of any meeting of stockholders, the Board, the Chair of the Board, the Chief Executive Officer or the President shall appoint one or more inspectors of election to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is present, ready and willing to act at a meeting of stockholders, the chair of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by law, inspectors may be officers, employees or agents of the Corporation. Each inspector, before entering upon the discharge of such inspector’s duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspector shall have the duties prescribed by law and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by law. Every vote taken by ballots shall be counted by a duly appointed inspector or duly appointed inspectors.
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ARTICLE II
DIRECTORS
2.1 General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board, who may exercise all of the powers of the Corporation except as otherwise provided by applicable law or the Certificate of Incorporation.
2.2 Number, Election and Qualification. Subject to the special rights of holders of any outstanding series of Preferred Stock to elect directors, the number of directors of the Corporation shall be fixed from time to time by resolution of the majority of the Whole Board. Election of directors need not be by written ballot. Directors need not be stockholders of the Corporation.
2.3 Chair of the Board; Vice Chair of the Board. The Board may appoint from its members a Chair of the Board and a Vice Chair of the Board, neither of whom need be an employee or officer of the Corporation. If the Board appoints a Chair of the Board, such Chair shall perform such duties and possess such powers as are assigned by the Board and, if the Chair of the Board is also designated as the Corporation’s Chief Executive Officer, shall have the powers and duties of the Chief Executive Officer prescribed in Section 3.7 of these Bylaws. If the Board appoints a Vice Chair of the Board, such Vice Chair shall perform such duties and possess such powers as are assigned by the Board. Unless otherwise provided by the Board, the Chair of the Board or, in the Chair’s absence, the Vice Chair of the board, if any, shall preside at all meetings of the Board.
2.4 Classes of Directors. Subject to the special rights of holders of any outstanding series of Preferred Stock to elect directors, the Board shall be divided into three classes, designated Class I, Class II and Class III, as provided in the Certificate of Incorporation.
2.5 Terms of Office. Subject to the special rights of holders of any outstanding series of Preferred Stock to elect directors, and except as set forth in the Certificate of Incorporation, each director shall serve for a term ending on the date of the third annual meeting of stockholders following the annual meeting of stockholders at which such director was elected; provided that the term of each director shall continue until the election and qualification of such director’s successor and be subject to such director’s earlier death, disqualification, resignation or removal.
2.6 Quorum. The greater of (a) a majority of the directors at any time in office and (b) one-third of the number of directors constituting the Whole Board shall constitute a quorum of the Board; provided that if the number of directors serving is less than one-third of the Whole Board, then a majority of the directors at any time in office shall constitute a quorum of the Board. If at any meeting of the Board there shall be less than a quorum, a majority of the directors present may adjourn the meeting from time to time without further notice other than announcement at the meeting, until a quorum shall be present. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting.
2.7 Action at Meeting. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board, unless a greater number is required by law or by the Certificate of Incorporation or these Bylaws.
2.8 Removal. Subject to the special rights of holders of any outstanding series of Preferred Stock and applicable law, directors of the Corporation may be removed only as expressly provided in the Certificate of Incorporation.
2.9 Vacancies. Subject to the special rights of holders of any outstanding series of Preferred Stock, any newly created directorship that results from an increase in the number of directors or any vacancy on the Board that results from the death, resignation, disqualification or removal of any director or from any other cause shall be filled solely by the affirmative vote of a majority of the total number of directors then in office, even if less than a quorum, or by a sole remaining director and shall not be filled by the stockholders. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall hold office for the remaining term of such director’s predecessor.
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2.10 Resignation. Any director may resign only by delivering a resignation in writing or by electronic transmission to the Chair of the Board or the Chief Executive Officer. Such resignation shall be effective upon delivery unless it is specified to be effective at some later time or upon the happening of some later event.
2.11 Regular Meetings. Regular meetings of the Board may be held without notice at such time and place as shall be determined from time to time by the Board; provided that any director who is absent when such a determination is made shall be given notice of the determination. A regular meeting of the Board may be held without notice immediately after and at the same place as the annual meeting of stockholders.
2.12 Special Meetings. Special meetings of the Board may be held at any time and place designated in a call by the Chair of the Board, the Chief Executive Officer, the President, two or more directors, or by one director in the event that there is only a single director in office.
2.13 Notice of Special Meetings. Notice of the date, place and time of any special meeting of the Board shall be given to each director by the Chair of the Board, the Chief Executive Officer, the President, the Secretary or by the officer or one of the directors calling the meeting. Notice shall be duly given to each director (a) in person or by telephone at least twenty-four (24) hours in advance of the meeting or (b) by sending notice by electronic mail or other means of electronic transmission, or delivering written notice by hand, to such director’s last known business, home or means of electronic transmission address at least twenty-four (24) hours in advance of the meeting. A notice or waiver of notice of a meeting of the Board need not specify the purposes of the meeting.
2.14 Meetings by Conference Communications Equipment. Directors may participate in meetings of the Board or any committee thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation by such means shall constitute presence in person at such meeting.
2.15 Action by Consent. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent to the action in writing or by electronic transmission, and any consent may be documented, signed and delivered in any manner permitted by Section 116 of the DGCL. After an action is taken, the consent or consents relating thereto shall be filed with the minutes of proceedings of the Board or committee in the same paper or electronic form as the minutes are maintained.
2.16 Committees. The Board may designate one or more committees, each committee to consist of one or more of the directors of the Corporation with such lawfully delegable powers and duties as the Board thereby confers, to serve at the pleasure of the Board. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members of the committee present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board and subject to the provisions of law, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority to (i) approve or adopt, or recommend to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopt, amend or repeal any bylaw of the Corporation. Each such committee shall keep minutes and make such reports as the Board may from time to time request. Except as the Board may otherwise determine, any committee may make rules for the conduct of its business, but unless otherwise provided by the directors or in such rules, its business shall be conducted as nearly as possible in the same manner as is provided in these Bylaws for the Board. Except as otherwise provided in the Certificate of Incorporation, these Bylaws, or the resolution of the Board designating the committee, a committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and delegate to a subcommittee any or all of the powers and authority of the committee.
2.17 Compensation of Directors. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, the Board shall have the authority to fix the compensation of directors, including for service on a committee of the Board. The directors may be reimbursed their expenses, if any, of attendance at each meeting of the Board. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of committees of the Board may be allowed like compensation and reimbursement of expenses for service on a committee of the Board.
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ARTICLE III
OFFICERS
3.1 Titles. The “Executive Officers” of the Corporation shall be such persons as are designated as such by the Board and shall include, but not be limited to, a Chief Executive Officer, a President and a Chief Financial Officer. Additional Executive Officers may be appointed by the Board from time to time. In addition to the Executive Officers of the Corporation described above, there may also be such “Non-Executive Officers” of the Corporation as may be designated and appointed from time to time by the Board or the Chief Executive Officer of the Corporation in accordance with the provisions of Section 3.2 of these Bylaws. In addition, the Secretary and Assistant Secretaries of the Corporation may be appointed by the Board from time to time.
3.2 Appointment. The Executive Officers of the Corporation shall be chosen by the Board. Non- Executive Officers of the Corporation shall be chosen by the Board or the Chief Executive Officer of the Corporation.
| 3.3 | Qualification. No officer need be a stockholder. Any two or more offices may be held by the same person. |
3.4 Tenure. Except as otherwise provided by law, by the Certificate of Incorporation or by these Bylaws, each officer shall hold office until such officer’s successor is duly elected and qualified, unless a different term is specified in the resolution electing or appointing such officer, or until such officer’s earlier death, resignation, disqualification or removal.
3.5 Removal; Resignation. Subject to the rights, if any, of an Executive Officer under any contract of employment, any Executive Officer may be removed, either with or without cause, at any time by the Board at any regular or special meeting of the Board. Any Non-Executive Officer may be removed, either with or without cause, at any time by the Board, the Chief Executive Officer or by the Executive Officer to whom such Non-Executive Officer reports. Any officer may resign only by delivering a resignation in writing or by electronic transmission to the Chief Executive Officer. Such resignation shall be effective upon receipt unless it is specified to be effective at some later time or upon the happening of some later event.
3.6 Vacancies. The Board may fill any vacancy occurring in any office for any reason and may, in its discretion, leave unfilled, for such period as it may determine, any offices.
3.7 President; Chief Executive Officer. Unless the Board has designated another person as the Chief Executive Officer, the President shall be the Chief Executive Officer. The Chief Executive Officer shall have general charge and supervision of the business of the Corporation subject to the direction of the Board, and shall perform all duties and have all powers that are commonly incident to the office of chief executive or that are delegated to such officer by the Board. The President shall perform such other duties and shall have such other powers as the Board or the Chief Executive Officer (if the President is not the Chief Executive Officer) may from time to time prescribe.
3.8 Chief Financial Officer. The Chief Financial Officer of the Corporation (the “Chief Financial Officer”) shall perform such duties and shall have such powers as may from time to time be assigned by the Board or the Chief Executive Officer. In addition, the Chief Financial Officer shall perform such duties and have such powers as are incident to the office, including without limitation the duty and power to keep and be responsible for all funds and securities of the Corporation, to deposit funds of the Corporation in depositories selected in accordance with these Bylaws, to disburse such funds as ordered by the Board, to make proper accounts of such funds, and to render as required by the Board statements of all such transactions and of the financial condition of the Corporation.
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3.9 Vice Presidents. Each Vice President shall perform such duties and possess such powers as the Board or the Chief Executive Officer may from time to time prescribe. The Board or the Chief Executive Officer may assign to any Vice President the title of Executive Vice President, Senior Vice President or any other title.
3.10 Secretary and Assistant Secretaries. The Secretary shall perform such duties and shall have such powers as the Board or the Chief Executive Officer may from time to time prescribe. In addition, the Secretary shall perform such duties and have such powers as are incident to the office of the secretary, including without limitation the duty and power to give notices of all meetings of stockholders and special meetings of the Board, to attend all meetings of stockholders and the Board and keep a record of the proceedings, to maintain a stock ledger and prepare lists of stockholders and their addresses as required, to be custodian of corporate records and the corporate seal and to affix and attest to the same on documents.
Any Assistant Secretary shall perform such duties and possess such powers as the Board, the Chief Executive Officer or the Secretary may from time to time prescribe.
In the absence of the Secretary or any Assistant Secretary at any meeting of stockholders or directors, the Chair of the meeting shall designate a temporary secretary to keep a record of the meeting.
3.11 Salaries. Executive Officers of the Corporation shall be entitled to such salaries, compensation or reimbursement as shall be fixed or allowed from time to time by the Board or a committee thereof.
3.12 Delegation of Authority. The Board may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding any provision hereof.
3.13 Execution of Contracts. Each Executive Officer and Non-Executive Officer of the Corporation may execute, affix the corporate seal and/or deliver, in the name and on behalf of the Corporation, deeds, mortgages, notes, bonds, contracts, agreements, powers of attorney, guarantees, settlements, releases, evidences of indebtedness, conveyances or any other document or instrument which (i) is authorized by the Board or (ii) is executed in accordance with policies adopted by the Board from time to time, except in each case where the execution, affixation of the corporate seal and/or delivery thereof shall be expressly and exclusively delegated by the Board to some other officer or agent of the Corporation.
ARTICLE IV
CAPITAL STOCK
4.1 Capital Stock Certificates; Uncertificated Shares. The shares of the Corporation may be certificated or uncertificated, subject to the sole discretion of the Board and the requirements of Delaware law. Every holder of capital stock of the Corporation represented by certificates shall be entitled to have a certificate, in such form as may be prescribed by law and by the Board, representing the number of shares held by such holder registered in certificate form. Each such certificate shall be signed in a manner that complies with Section 158 of the DGCL. Each of the Chair or Vice Chair of the Board or the Chief Executive Officer, the President or any Vice President, the Chief Financial Officer, the Secretary or any Assistant Secretary shall be authorized to execute such certificates.
4.2 Transfers. Shares of capital stock of the Corporation shall be transferable in the manner prescribed by law, the Certificate of Incorporation and in these Bylaws. Transfers of shares of capital stock of the Corporation shall be made only on the books of the Corporation or by transfer agents designated to transfer shares of capital stock of the Corporation. Subject to applicable law, shares of capital stock represented by certificates shall be transferred only on the books of the Corporation by the surrender to the Corporation or its transfer agent of the certificate representing such shares properly endorsed or accompanied by a written assignment or power of attorney properly executed, and with such proof of authority or the authenticity of signature as the Corporation or its transfer agent may reasonably require. Except as may be otherwise required by law, by the Certificate of Incorporation or by these Bylaws, the Corporation shall be entitled to treat the record holder of capital stock as shown on its books as the owner of such capital stock for all purposes, including the payment of dividends and the right to vote with respect to such capital stock, regardless of any transfer, pledge or other disposition of such capital stock until the shares have been transferred on the books of the Corporation in accordance with the requirements of these Bylaws.
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4.3 Lost, Stolen or Destroyed Certificates. The Corporation may issue a new certificate or uncertificated shares in place of any previously issued certificate alleged to have been lost, stolen or destroyed, upon such terms and conditions as the Board may prescribe, including the presentation of reasonable evidence of such loss, theft or destruction and the giving of such indemnity and posting of such bond as the Board may require for the protection of the Corporation or any transfer agent or registrar.
4.4 Record Date. In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance herewith at the adjourned meeting.
In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of capital stock or for the purpose of any other lawful action, the Board may fix a record date, which shall not be more than sixty (60) days prior to such action. If no such record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
4.5 Regulations. The issue and registration of shares of capital stock of the Corporation shall be governed by such other regulations as the Board may establish.
4.6 Dividends. Dividends on the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board at any regular or special meeting, pursuant to law, and may be paid in cash, in property or in shares of capital stock.
ARTICLE V
GENERAL PROVISIONS
5.1 Fiscal Year. Except as from time to time otherwise designated by the Board, the fiscal year of the Corporation shall begin on the first day of January of each year and end on the last day of December in each year.
| 5.2 | Corporate Seal. The corporate seal shall be in such form as shall be approved by the Board. |
5.3 Waiver of Notice. Whenever notice is required to be given by law, by the Certificate of Incorporation or by these Bylaws, a written waiver signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before, at or after the time of the event for which notice is to be given, shall be deemed equivalent to notice required to be given to such person. Neither the business nor the purpose of any meeting need be specified in any such waiver. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.
5.4 Voting of Securities. Except as the Board may otherwise designate, the Chief Executive Officer, the President or the Chief Financial Officer may waive notice, vote, consent, or appoint any person or persons to waive notice, vote or consent, on behalf of the Corporation, and act as, or appoint any person or persons to act as, proxy or attorney-in-fact for this Corporation (with or without power of substitution) with respect to, the securities of any other entity which may be held by this Corporation.
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5.5 Evidence of Authority. A certificate by the Secretary, or an Assistant Secretary, or a temporary Secretary, as to any action taken by the stockholders, directors, a committee or any officer or representative of the Corporation shall as to all persons who rely on the certificate in good faith be conclusive evidence of such action.
5.6 Certificate of Incorporation. All references in these Bylaws to the Certificate of Incorporation shall be deemed to refer to the Certificate of Incorporation of the Corporation, as amended and/or restated, including any certificate of designation with respect to any series of outstanding preferred stock, par value $0.0001 per share (“Preferred Stock”), of the Corporation, and in effect from time to time.
5.7 Severability. Any determination that any provision of these Bylaws is for any reason inapplicable, illegal or ineffective shall not affect or invalidate any other provision of these Bylaws.
5.8 Pronouns. All pronouns used in these Bylaws shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or persons may require.
5.9 Electronic Transmission. For purposes of these Bylaws, “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.
ARTICLE VI
AMENDMENTS
These Bylaws may be altered, amended or repealed, in whole or in part, or new Bylaws may be adopted by the Whole Board or by the stockholders as expressly provided in the Certificate of Incorporation.
ARTICLE VII
INDEMNIFICATION AND ADVANCEMENT
7.1 Power to Indemnify in Actions, Suits or Proceedings other than Those by or in the Right of the Corporation. Subject to Section 7.3, the Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (and the heirs, executor or administrators of such person) who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”) (other than an action by or in the right of the Corporation) by reason of the fact that such person is or was a director or Executive Officer of the Corporation, or, while a director or Executive Officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorneys’ fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with the defense or settlement of such Proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea or nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.
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7.2 Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation. Subject to Section 7.3, the Corporation shall indemnify any person (and the heirs, executor or administrators of such person) who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director or Executive Officer of the Corporation, or, while a director or Executive Officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
7.3 Authorization of Indemnification. Any indemnification under this Article VII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director or Executive Officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 7.1 or Section 7.2, as the case may be. Such determination shall be made, with respect to a person who is a director or Executive Officer at the time of such determination, (i) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (ii) by a committee of such directors designated by a majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion or (iv) by the stockholders. Such determination shall be made, with respect to former directors and Executive Officers, by any person or persons having the authority to act on the matter on behalf of the Corporation. To the extent, however, that a present or former director or Executive Officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding set forth in Section 7.1 or Section 7.2 or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith, without the necessity of authorization in the specific case.
The Board in its sole discretion shall have power on behalf of the Corporation to indemnify any person, other than a director or Executive Officer, made a party to any Proceeding by reason of the fact that such person, or such person’s testator or intestate, is or was an officer, employee or agent of the Corporation (or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise).
7.4 Good Faith Defined. For purposes of any determination under Section 7.3, a person shall be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe such person’s conduct was unlawful, if such person’s action is based on good faith reliance on the records or books of account of the Corporation or another enterprise, or on information supplied to such person by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The term “another enterprise” as used in this Section 7.4 shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. The provisions of this Section 7.4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Section 7.1 or 7.2, as the case may be.
7.5 Right of Claimant to Bring Suit. Notwithstanding any contrary determination in the specific case under Section 7.3, and notwithstanding the absence of any determination thereunder, if a claim under Sections 7.1 or 7.2 of the Article VII is not paid in full by the Corporation within (i) ninety (90) days after a written claim for indemnification has been received by the Corporation, or (ii) thirty (30) days after a written claim for an advancement of expenses has been received by the Corporation, the claimant may at any time thereafter (but not before) bring suit against the Corporation in the Court of Chancery in the State of Delaware to recover the unpaid amount of the claim, together with interest thereon, or to obtain advancement of expenses, as applicable. It shall be a defense to any such action brought to enforce a right to indemnification (but not in an action brought to enforce a right to an advancement of expenses) that the claimant has not met the standards of conduct which make it permissible under the DGCL (or other applicable law) for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither a contrary determination in the specific case under Section 7.3 nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the claimant has not met any applicable standard of conduct. If successful, in whole or in part, the claimant shall also be entitled to be paid the expense of prosecuting such claim, including reasonable attorneys’ fees incurred in connection therewith, to the fullest extent permitted by applicable law.
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7.6 Expenses Payable in Advance. Expenses, including without limitation attorneys’ fees, incurred by a current or former director or Executive Officer in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid, to the fullest extent permitted by Delaware law as the same exists or may hereafter be amended, by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such current or former director or Executive Officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article VII.
7.7 Nonexclusivity of Indemnification and Advancement of Expenses. The rights to indemnification and advancement of expenses provided by or granted pursuant to this Article VII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Certificate of Incorporation, any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that, subject to Section 7.11, indemnification of the persons specified in Sections 7.1 and 7.2 shall be made to the fullest extent permitted by law. The provisions of this Article VII shall not be deemed to preclude the indemnification of any person who is not specified in Section 7.1 or 7.2 but whom the Corporation has the power or obligation to indemnify under the provisions of the DGCL, or otherwise.
7.8 Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, Executive Officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, Executive Officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under the provisions of this Article VII.
7.9 Certain Definitions. For purposes of this Article VII, references to “the Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, shall stand in the same position under the provisions of this Article VII with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. For purposes of this Article VII, references to “fines” shall include any excise taxes assessed on a person with respect of any employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article VII.
7.10 Survival of Indemnification and Advancement of Expenses. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director or Executive Officer and shall inure to the benefit of the heirs, executors and administrators of such a person.
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7.11 Limitation on Indemnification. Notwithstanding anything contained in this Article VII to the contrary, except for proceedings to enforce rights to indemnification (which shall be governed by Section 7.5), the Corporation shall not be obligated to indemnify any director, officer, employee or agent in connection with an action, suit or proceeding (or part thereof):
(a) for which payment has actually been made to or on behalf of such person under any statute, insurance policy, indemnity provision, vote or otherwise, except with respect to any excess beyond the amount paid;
(b) initiated by such person, including any action, suit or proceeding (or part thereof) initiated by such person against the Corporation or its directors, officers, employees, agents or other indemnitees, unless (i) the Board authorized the action, suit or proceeding (or relevant part thereof) prior to its initiation, (ii) the Corporation provides the indemnification, in its sole discretion, pursuant to the powers vested in the Corporation under applicable law, (iii) otherwise required to be made under Section 7.5 or (iv) otherwise required by applicable law; or
| (c) | if prohibited by applicable law. |
7.12 Contract Rights. The obligations of the Corporation under this Article VII to indemnify, and advance expenses to, a person who is or was a director or Executive Officer of the Corporation shall be considered a contract between the Corporation and such person, and no modification or repeal of any provision of this Article VII shall affect, to the detriment of such person, such obligations of the Corporation in connection with a claim based on any act or failure to act occurring before such modification or repeal.
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EXHIBIT 10.1
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (as it may be amended, supplemented or restated from time to time in accordance with its terms, this “A&R Registration Rights Agreement”), dated as of May 9, 2024 (the “Effective Date”), is made by and among (i) Oklo Inc. (f/k/a AltC Acquisition Corp.), a Delaware corporation (“PubCo”); (ii) each of the Persons identified on the signature pages hereto or on the signature pages to a joinder in the form attached to this A&R Registration Rights Agreement as Exhibit A under the heading “Company Shareholders” or “Insiders” (collectively, the “Company Shareholders”) and; (iii) AltC Sponsor LLC, a Delaware limited liability company (the “Sponsor”). Each of PubCo, the Company Shareholders and the Sponsor may be referred to herein as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS, PubCo has entered into that certain Agreement and Plan of Merger and Reorganization, dated as of July 11, 2023 (as it may be amended, supplemented or restated from time to time in accordance with the terms of such agreement, the “Merger Agreement”), by and among PubCo, AltC Merger Sub, Inc., a Delaware corporation (“Merger Sub”), and Oklo Inc., a Delaware corporation (the “Company”), in connection with the business combination set forth in the Merger Agreement;
WHEREAS, pursuant to the Merger Agreement, Merger Sub will be merged with and into the Company, and the Company Shareholders will receive shares of Common Stock (as defined herein);
WHEREAS, PubCo and the Sponsor entered into that certain Registration Rights Agreement, dated as of July 7, 2021 (the “Original RRA”);
WHEREAS, in connection with the execution of this A&R Registration Rights Agreement, PubCo and the Sponsor desire to terminate the Original RRA and replace it with this A&R Registration Rights Agreement;
WHEREAS, on the Effective Date, the Parties desire to set forth their agreement with respect to registration rights and certain other matters, in each case in accordance with the terms and conditions of this A&R Registration Rights Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this A&R Registration Rights Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:
Article I
Definitions
Section 1.1. Definitions. As used in this A&R Registration Rights Agreement, the following terms shall have the following meanings:
“Action” means any action, suit, charge, litigation, arbitration, or other proceeding at law or in equity (whether civil, criminal or administrative) by or before any Governmental Entity.
“Adverse Disclosure” means any public disclosure of material non-public information, which disclosure, in the good faith determination of the Board, after consultation with counsel to PubCo, (a) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein (in the case of any Prospectus and any preliminary Prospectus, in the light of the circumstances under which they were made) not misleading, (b) would not be required to be made at such time if the Registration Statement were not being filed, and (c) PubCo has a bona fide business purpose for not making such public disclosure.
“Affiliate” of any particular Person means any other Person controlling, controlled by or under common control with such Person, where “control” means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, its capacity as a sole or managing member or otherwise; provided, that no Party shall be deemed an Affiliate of PubCo or any of its subsidiaries for purposes of this A&R Registration Rights Agreement.
“Automatic Shelf Registration Statement” has the meaning set forth in Rule 405 promulgated by the SEC pursuant to the Securities Act.
“Beneficially Own” has the meaning set forth in Rule 13d-3 promulgated under the Exchange Act.
“Board” means the board of directors of PubCo.
“Business Day” means any day except a Saturday, a Sunday or any other day on which commercial banks are required or authorized to close in the State of New York.
“Closing” has the meaning given to such term in the Merger Agreement.
“Closing Date” has the meaning given to such term in the Merger Agreement.
“Common Stock” means shares of the Class A common stock, par value $0.0001 per share, of PubCo, including (i) any shares of such Class A common stock issuable upon the exercise of any warrant or other right to acquire shares of such Class A common stock and (ii) any Equity Securities of PubCo that may be issued or distributed or be issuable with respect to such Class A common stock by way of conversion, dividend, stock split or other distribution, merger, consolidation, exchange, recapitalization or reclassification or similar transaction.
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“Company” has the meaning set forth in the Recitals.
“Company Shareholders” has the meaning set forth in the Preamble.
“Company Shareholder Lock-Up Period” means the period beginning on the Closing Date and ending at 11:59 pm Eastern Time on the date that is 180 days after the Closing Date.
“Demand Delay” has the meaning set forth in Section 2.2(a)(ii).
“Demand Initiating Holders” has the meaning set forth in Section 2.2(a).
“Demand Registration” has the meaning set forth in Section 2.2(a).
“Earnout Shares” has the meaning given to such term in the Merger Agreement.
“Effective Date” has the meaning set forth in the Preamble.
“Effectiveness Period” has the meaning set forth in Section 2.5(c).
“Eligible Demand Participation Holders” means (a) each of the Company Shareholders (excluding the Insiders), subject to the expiration of the Company Shareholder Lock-Up Period, (b) each of the Insiders, subject to the expiration of the Insider Lock-Up Period (and, for the avoidance of doubt, solely with respect to the portion of Registrable Securities that have been released from the lock-up restrictions of Section 3.1(b)), and (c) the Sponsor, subject to the expiration of the Sponsor Lock-Up Period (and, for the avoidance of doubt, solely with respect to the portion of Registrable Securities that have been released from the lock-up restrictions of Section 3.1(c)).
“Eligible Take-Down Holders” means (a) each of the Company Shareholders (excluding the Insiders), subject to the expiration of the Company Shareholder Lock-Up Period, (b) each of the Insiders, subject to the expiration of the Insider Lock-Up Period (and, for the avoidance of doubt, solely with respect to the portion of Registrable Securities that have been released from the lock-up restrictions of Section 3.1(b)), and (c) the Sponsor, subject to the expiration of the Sponsor Lock-Up Period (and, for the avoidance of doubt, solely with respect to the portion of Registrable Securities that have been released from the lock-up restrictions of Section 3.1(c)).
“Equity Securities” means, with respect to any Person, all of the shares of capital stock or equity of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock or equity of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock or equity of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares or equity (or such other interests), restricted stock awards, restricted stock units, equity appreciation rights, phantom equity rights, profit participation and all of the other ownership or profit interests of such Person (including partnership or member interests therein), whether voting or nonvoting.
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“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor thereto, as the same shall be in effect from time to time.
“Family Member” means with respect to any individual, a spouse, lineal descendant (whether natural or adopted) or spouse of a lineal descendant of such individual or any trust created for the benefit of such individual or of which any of the foregoing is a beneficiary.
“FINRA” means the Financial Industry Regulatory Authority, Inc.
“Governmental Entity” means any nation or government, any state, province or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any court, arbitrator (public or private) or other body or administrative, regulatory or quasi-judicial authority, agency, department, board, commission or instrumentality of any federal, state, local or foreign jurisdiction.
“Holder” means any holder of Registrable Securities who is a Party to, or who succeeds to rights under, this A&R Registration Rights Agreement pursuant to Section 4.1.
“Insiders” means each undersigned party identified as an “Insider” on the signature pages attached hereto.
“Insider Lock-Up Period” means the following lock-up periods:
(a) with respect to 40% of the Lock-Up Shares, the period from the Closing Date to the earlier to occur of (i) the twelve (12) month anniversary of the Closing Date and (ii) the date on which the closing price of Common Stock equals or exceeds $12.00 per share for twenty (20) Trading Days within any sixty (60) consecutive Trading Day period following the Closing Date;
(b) with respect to 30% of the Lock-Up Shares, the period from the Closing Date to the earlier to occur of (i) the twenty-four (24) month anniversary of the Closing Date and (ii) the date on which the closing price of Common Stock equals or exceeds $14.00 per share for twenty (20) Trading Days within any sixty (60) consecutive Trading Day period following the Closing Date; and
(c) with respect to 30% of the Lock-Up Shares, the period from the Closing Date to the earlier to occur of (i) the thirty-six (36) month anniversary of the Closing Date and (ii) the date on which the closing price of Common Stock equals or exceeds $16.00 per share for twenty (20) trading days within any sixty (60) consecutive Trading Day period following the Closing.
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“Laws” means all laws, acts, statutes, constitutions, treaties, ordinances, codes, rules, regulations, and rulings of a Governmental Entity, including common law. All references to “Laws” shall be deemed to include any amendments thereto, and any successor Law, unless the context otherwise requires.
“Lock-Up Periods” means the Company Shareholder Lock-Up Period, the Insider Lock-Up Period and the Sponsor Lock-Up Period.
“Lock-Up Shares” means the Equity Securities of PubCo held by the Holders as of the Closing Date, including Common Stock and Common Stock issuable upon exercise of any warrants, options or other rights.
“Market Stand-Off Period” has the meaning set forth in Section 2.10.
“Marketed” means an Underwritten Shelf Take-Down or other Underwritten Offering, as applicable, that involves the use or involvement of a customary “road show” (including an “electronic road show”) or other substantial marketing effort by Underwriters over a period of at least 48 hours.
“Merger Agreement” has the meaning set forth in the Recitals.
“Merger Sub” has the meaning set forth in the Recitals.
“Misstatement” shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus, in the light of the circumstances under which they were made, not misleading.
“Non-Marketed” means an Underwritten Shelf Take-Down that is not a Marketed Underwritten Shelf Take-Down.
“Non-Marketed Underwritten Shelf Take-Down Selling Holders” has the meaning set forth in Section 2.1(d)(iv)(B).
“Original RRA” has the meaning set forth in the Recitals.
“Party” has the meaning set forth in the Preamble.
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“Permitted Transferee” means (i) with respect to the Company Shareholders (including the Insiders), (a) any Family Member of such Person, (b) any Affiliate of such Person or to any investment fund or other entity controlled or managed by such Person, (c) any Affiliate of any Family Member of such Person, (d) if the undersigned is a corporation, partnership, limited liability company or other business entity, its stockholders, partners, members or other equityholders, including, for the avoidance of doubt, where such Person is a partnership, to its general partner or a successor partnership or fund, or any other funds managed by such partnership, (e) any trust for the direct or indirect benefit of such Person or Family Member of such Person, (f) if such Person is a trust, the trustor or beneficiary of such trust or to the estate of a beneficiary of such trust, (g) in the case of an individual, a Transferee by virtue of laws of descent and distribution upon death of the individual, (h) in the case of an individual, a Transferee pursuant to a qualified domestic relations order, (i) a Transferee pursuant to any liquidation, merger, stock exchange or other similar transaction which results in all of PubCo’s stockholders having the right to exchange their Common Stock for cash, securities or other property subsequent to the Merger, and (j) the Company or PubCo in connection with the repurchase of shares of Common Stock issued pursuant to equity awards granted under a stock incentive plan or other equity award plan, including pursuant to the exercise of any equity award (such as on a “cashless,” “net exercise” or “net settlement” basis) or for the purpose of satisfying withholding taxes due upon the exercise, settlement or lapse of restrictions of an equity award (such as through a “cashless,” “net exercise” or “net settlement” procedure); and (ii) with respect to the Sponsor, as set forth in Section 6(c) of the Sponsor Agreement.
“Person” means any natural person, sole proprietorship, partnership, trust, unincorporated association, corporation, limited liability company, entity or Governmental Entity.
“Prospectus” means the prospectus included in any Registration Statement, all amendments (including post-effective amendments) and supplements to such prospectus, and all material incorporated by reference in such prospectus.
“PubCo” has the meaning set forth in the Preamble.
“Registrable Securities” means (i) (a) any shares of Common Stock and (b) any Equity Securities of PubCo that may be issued or distributed or be issuable with respect to the securities referred to in clause (a) by way of conversion, dividend, stock split or other distribution, merger, consolidation, exchange, recapitalization or reclassification or similar transaction, in each case Beneficially Owned by a Holder as of immediately following the Closing and (ii) any Earnout Shares; provided, however, that any such Registrable Securities shall cease to be Registrable Securities when: (A) a Registration Statement with respect to the sale of such Registrable Securities has become effective under the Securities Act and such Registrable Securities have been sold, transferred, disposed of or exchanged in accordance with the plan of distribution set forth in such Registration Statement; (B) such Registrable Securities shall have ceased to be outstanding; (C) such Registrable Securities have been sold to, or through, a broker, dealer or Underwriter in a public distribution or other public securities transaction; (D) such Registrable Securities shall have been otherwise transferred by a Holder, a new certificate or book-entry for such security not bearing a legend restricting further transfer shall have been delivered by PubCo and subsequent public distribution of such security shall not require registration under the Securities Act; or (E) such Registrable Securities are eligible for resale without registration pursuant to Rule 144 under the Securities Act (or any successor rule promulgated thereafter by the SEC) without volume or manner-of-sale restrictions and without the requirement for PubCo to be in compliance with the current public information required by Rule 144(i)(2) under the Securities Act.
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“Registration” means a registration, including any related Shelf Take-Down, effected by preparing and filing a registration statement, prospectus or similar document in compliance with the requirements of the Securities Act, and such registration statement becoming effective.
“Registration Expenses” means the out-of-pocket expenses of a Registration or other Transfer pursuant to the terms of this A&R Registration Rights Agreement, including (a) all SEC, stock exchange and FINRA registration and filing fees (including, if applicable, the fees and expenses of any “qualified independent underwriter,” as such term is defined in Rule 5121 of FINRA (or any successor provision), and of its counsel), (b) all fees and expenses of complying with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with blue sky qualifications of the Registrable Securities), (c) all printing, messenger and delivery expenses, (d) the reasonable fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange and all rating agency fees, (e) the reasonable fees and disbursements of counsel for PubCo and of its independent public accountants, including the expenses of any special audits and/or comfort letters required by or incident to such performance and compliance, (f) the reasonable and documented fees and out-of-pocket expenses of one counsel for all of the Holders participating in an Underwritten Offering, selected by such Holders that own a majority of the Registrable Securities participating in such Registration or other Transfer; provided, however, that such reimbursable fees and expenses of counsel shall not exceed $75,000, per Registration and (g) any other reasonable and documented fees and distributions customarily paid by the issuers of securities.
“Registration Statement” means any registration statement that covers the Registrable Securities pursuant to the provisions of this A&R Registration Rights Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.
“Representatives” means, with respect to any Person, any of such Person’s officers, directors, employees, agents, attorneys, accountants, actuaries, consultants, equity financing partners or financial advisors or other Person acting on behalf of such Person.
“SEC” means the United States Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended, and any successor thereto, as the same shall be in effect from time to time.
“Shelf Holder” means any Holder that owns Registrable Securities that have been registered on a Shelf Registration Statement.
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“Shelf Registration” means a registration of securities pursuant to a Registration Statement filed with the SEC in accordance with and pursuant to Rule 415 promulgated under the Securities Act.
“Shelf Registration Statement” means a Registration Statement of PubCo filed with the SEC on either (a) Form S-3 (or any successor form or other appropriate form under the Securities Act) or (b) if PubCo is not permitted to file a Registration Statement on Form S-3, a Registration Statement on Form S-1 (or any successor form or other appropriate form under the Securities Act), in each case for an offering to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act covering the Registrable Securities, as applicable.
“Shelf Suspension” has the meaning set forth in Section 2.1(c).
“Shelf Take-Down” means any offering or sale of Registrable Securities initiated by a Shelf Take-Down Initiating Holder pursuant to a Shelf Registration Statement.
“Shelf Take-Down Initiating Holders” has the meaning set forth in Section 2.1(d).
“Sponsor” has the meaning set forth in the Preamble.
“Sponsor Agreement” means that certain Amended and Restated Letter Agreement, dated as of July 11, 2023, by and among the Sponsor and PubCo, as amended, restated, modified or supplemented from time to time.
“Sponsor Lock-Up Period” means the lock-up periods as set forth in Section 6(b) of the Sponsor Agreement.
“Subsequent Shelf Registration” has the meaning set forth in Section 2.1(b).
“Take-Down Participation Notice” has the meaning set forth in Section 2.1(d)(iv)(C).
“Take-Down Tagging Holder” has the meaning set forth in Section 2.1(d)(iv)(B).
“Trading Day” means a day on which the New York Stock Exchange or such other principal United States securities exchange on which the Common Stock is listed, quoted or admitted to trading and is open for the transaction of business (unless such trading shall have been suspended for the entire day).
“Transfer” means any direct or indirect (i) offer, pledge, sale, contract to sell, hypothecation, sale of any option or contract to purchase, purchase of any option or contract to sell, grant of any option, right or warrant to purchase, lending, or other transfer or disposition, or establishment or increase of a put equivalent position or liquidation or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act, in each case with respect to any Lock-Up Shares, or (ii) entry into any hedging, swap or other agreement or transaction that transfers, in whole or in part, any of the economic consequences of ownership of the Lock-Up Shares, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise. The terms “Transferee,” “Transferor,” “Transferred,” and other forms of the word “Transfer” shall have the correlative meanings.
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“Underwriter” means any investment banker(s) and manager(s) appointed to administer the offering of any Registrable Securities as principal in an Underwritten Offering.
“Underwritten Offering” means a Registration in which securities of PubCo are sold to an Underwriter for distribution to the public.
“Underwritten Shelf Take-Down” has the meaning set forth in Section 2.1(d)(ii)(A).
“Underwritten Shelf Take-Down Notice” has the meaning set forth in Section 2.1(d)(ii)(A).
“Well-Known Seasoned Issuer” has the meaning set forth in Rule 405 promulgated by the SEC pursuant to the Securities Act.
Section 1.2. Interpretive Provisions. For all purposes of this A&R Registration Rights Agreement, except as otherwise provided in this A&R Registration Rights Agreement or unless the context otherwise requires:
(a) the meanings of defined terms are applicable to the singular as well as the plural forms of such terms.
(b) the words “hereof”, “herein”, “hereunder” and words of similar import, when used in this A&R Registration Rights Agreement, refer to this A&R Registration Rights Agreement as a whole and not to any particular provision of this A&R Registration Rights Agreement.
(c) references in this A&R Registration Rights Agreement to any Law shall be deemed also to refer to such Law, and all rules and regulations promulgated thereunder.
(d) whenever the words “include”, “includes” or “including” are used in this A&R Registration Rights Agreement, they shall mean “without limitation.”
(e) the captions and headings of this A&R Registration Rights Agreement are for convenience of reference only and shall not affect the interpretation of this A&R Registration Rights Agreement.
(f) pronouns of any gender or neuter shall include, as appropriate, the other pronoun forms.
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Article II
Registration Rights
Section 2.1. Shelf Registration.
(a) Filing. PubCo shall use commercially reasonable efforts to file within thirty (30) business days following the Closing Date a Shelf Registration Statement covering the resale of all Registrable Securities (except as determined by PubCo pursuant to Section 2.7 as of two Business Days prior to such filing) on a delayed or continuous basis. PubCo shall use its commercially reasonable efforts to cause such Shelf Registration Statement to become effective under the Securities Act as soon as reasonably practicable after such filing, but in no event later than the 105th calendar day (or 165th calendar day if the SEC notifies PubCo that it will “review” the Shelf Registration Statement) after the Closing Date. PubCo shall maintain such Shelf Registration Statement in accordance with the terms of this A&R Registration Rights Agreement, and shall prepare and file with the SEC such amendments, including post-effective amendments, and supplements as may be necessary to keep such Shelf Registration Statement continuously effective, available for use and in compliance with the provisions of the Securities Act until such time as of which all Registrable Securities registered by such Shelf Registration Statement have been sold or cease to be Registrable Securities. In the event PubCo files a Shelf Registration Statement on Form S-1, PubCo shall use its commercially reasonable efforts to convert such Shelf Registration Statement (and any Subsequent Shelf Registration) to a Shelf Registration Statement on Form S-3 as soon as reasonably practicable after PubCo is eligible to use Form S-3. PubCo shall also use its commercially reasonable efforts to file any replacement or additional Shelf Registration Statement and use commercially reasonable efforts to cause such replacement or additional Shelf Registration Statement to become effective prior to the expiration of the initial Shelf Registration Statement filed pursuant to this Section 2.1(a).
(b) Subsequent Shelf Registration. If any Shelf Registration Statement ceases to be effective under the Securities Act for any reason at any time while there remain any Registrable Securities registered by such Shelf Registration Statement, PubCo shall use its commercially reasonable efforts to as promptly as is reasonably practicable cause such Shelf Registration Statement to again become effective under the Securities Act (including obtaining the prompt withdrawal of any order suspending the effectiveness of such Shelf Registration Statement), and shall use its commercially reasonable efforts to as promptly as is reasonably practicable amend such Shelf Registration Statement in a manner reasonably expected to result in the withdrawal of any order suspending the effectiveness of such Shelf Registration Statement or file an additional Registration Statement as a Shelf Registration (a “Subsequent Shelf Registration”) registering the resale of all outstanding Registrable Securities registered by such prior Shelf Registration Statement. If a Subsequent Shelf Registration is filed, PubCo shall use its commercially reasonable efforts to (i) cause such Subsequent Shelf Registration to become effective under the Securities Act as promptly as is reasonably practicable after the filing thereof (it being agreed that the Subsequent Shelf Registration shall be an Automatic Shelf Registration Statement if PubCo is a Well-Known Seasoned Issuer) and (ii) keep such Subsequent Shelf Registration continuously effective, available for use and in compliance with the provisions of the Securities Act until such time as of which all Registrable Securities registered by such Subsequent Shelf Registration have been sold or cease to be Registrable Securities.
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(c) Suspension of Filing or Registration. Upon receipt of written notice from the Company that a Shelf Registration Statement or Prospectus contains or includes a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until they have received copies of a supplemented or amended Registration Statement or Prospectus correcting the Misstatement (it being understood that PubCo hereby covenants to prepare and file such supplement or amendment as soon as reasonably practicable after the time of such notice), or until they are advised in writing by PubCo that the use of the Registration Statement or Prospectus may be resumed. PubCo shall be entitled to delay or postpone the filing or effectiveness of a Shelf Registration Statement, and from time to time to require the Holders not to sell under a Registration Statement or to suspend the effectiveness thereof, if the filing, effectiveness or continued use of a Shelf Registration Statement at any time would require PubCo to make an Adverse Disclosure or would require the inclusion in such Shelf Registration Statement of financial statements that are unavailable to PubCo for reasons beyond PubCo’s control; provided, however, that PubCo shall have a period of not more than ninety (90) days within which to delay the filing or effectiveness (but not the preparation) of such Shelf Registration Statement or, in the case of a Shelf Registration Statement that has been declared effective, to suspend the use by Holders of such Shelf Registration Statement (in each case, a “Shelf Suspension”); provided, however, that PubCo shall not be permitted to exercise in any twelve (12) month period (i) more than two (2) Shelf Suspensions pursuant to this Section 2.1(c) and Demand Delays pursuant to Section 2.2(a)(ii) in the aggregate, unless consented to in writing by the Eligible Demand Participation Holders holding a majority of the Registrable Securities held by all Eligible Demand Participation Holders or (ii) aggregate Shelf Suspensions pursuant to this Section 2.1(c) and Demand Delays pursuant to Section 2.2(a)(ii) of more than one hundred fifty (150) days. Each Holder shall keep confidential the fact that a Shelf Suspension is in effect and the contents of any notice by PubCo of a Shelf Suspension for the permitted duration of the Shelf Suspension or until otherwise notified by PubCo, except (A) for disclosure to such Holder’s employees, agents and professional advisers who need to know such information and are obligated to keep it confidential, (B) for disclosures to the extent required in order to comply with reporting obligations to its limited partners who have agreed to keep such information confidential or (C) as required by law or subpoena. In the case of a Shelf Suspension that occurs after the effectiveness of the applicable Shelf Registration Statement, the Holders agree to suspend use of the applicable Prospectus for the permitted duration of such Shelf Suspension in connection with any sale or purchase of, or offer to sell or purchase, Registrable Securities, upon receipt of written notice by PubCo. PubCo shall immediately notify the Holders or Shelf Holders, as applicable, upon the termination of any Shelf Suspension, and (i) in the case of a Shelf Registration Statement that has not been declared effective, shall promptly thereafter file the Shelf Registration Statement and use its commercially reasonable efforts to have such Shelf Registration Statement declared effective under the Securities Act and (ii) in the case of an effective Shelf Registration Statement, shall amend or supplement the Prospectus, if necessary, so it does not contain any Misstatement prior to the expiration of the Shelf Suspension and furnish to the Shelf Holders such numbers of copies of the Prospectus as so amended or supplemented as the Shelf Holders may reasonably request. PubCo agrees, if necessary, to supplement or make amendments to the Shelf Registration Statement if required by the registration form used by PubCo for the Registration or by the instructions applicable to such registration form or by the Securities Act or the rules or regulations promulgated thereunder or as may reasonably be requested by the Shelf Holders Beneficially Owning a majority of the Registrable Securities then outstanding.
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(d) Shelf Take-Downs.
(i) Generally. Subject to the terms and provisions of this Article II (including Section 2.2(d)), an Eligible Take-Down Holder may initiate a Shelf Take-Down (the then Eligible Take-Down Holder, the “Shelf Take-Down Initiating Holder”) that, at the option of such Shelf Take-Down Initiating Holder (A) is in the form of an Underwritten Shelf Take-Down or a Shelf Take-Down that is not an Underwritten Shelf Take-Down and (B) in the case of an Underwritten Shelf Take-Down, is Non-Marketed or Marketed, in each case, as shall be specified in the written demand delivered by the Shelf Take-Down Initiating Holder to PubCo pursuant to the provisions of this Section 2.1(d). For the avoidance of doubt, an Eligible Take-Down Holder that is not a Shelf Take-Down Initiating Holder cannot initiate a Shelf Take-Down.
(ii) Underwritten Shelf Take-Downs.
(A) A Shelf Take-Down Initiating Holder may elect in a written demand delivered to PubCo (an “Underwritten Shelf Take-Down Notice”) for any Shelf Take-Down that it has initiated to be in the form of an Underwritten Offering (an “Underwritten Shelf Take-Down”), and PubCo shall, if so requested, file and effect an amendment or supplement of the Shelf Registration Statement for such purpose as soon as practicable; provided, that any such Underwritten Shelf Take-Down must comply with Section 2.2(d) and involve the offer and sale of Registrable Securities having a reasonably anticipated net aggregate offering price (after deduction of Underwriter commissions) of at least (I) in the case of any Marketed Underwritten Shelf Take-Down, $100,000,000 and (II) in the case of any Non-Marketed Underwritten Shelf Take-Down, $75,000,000 unless such Non-Marketed Underwritten Shelf Take-Down is for all of the Registrable Securities then held by the applicable Shelf Take-Down Initiating Holder (in which case there is no minimum other than the inclusion of all of such Registrable Securities). PubCo shall have the right to select the Underwriter or Underwriters to administer such Underwritten Shelf Take-Down; provided, that such Underwriter or Underwriters shall be reasonably acceptable to the Shelf Holders that own a majority of the Registrable Securities to be offered for sale in such Underwritten Shelf Take Down subject to the limitations of this Section 2.1(d)(ii)(B).
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(B) With respect to any Underwritten Shelf Take-Down (including any Marketed Underwritten Shelf Take-Down), in the event that a Shelf Holder otherwise would be entitled to participate in such Underwritten Shelf Take-Down pursuant to this Section 2.1(d)(ii), Section 2.1(d)(iii) or Section 2.1(d)(iv), as the case may be, the right of such Shelf Holder to participate in such Underwritten Shelf Take-Down shall be conditioned upon such Shelf Holder’s participation in such underwriting and the inclusion of such Shelf Holder’s Registrable Securities in the Underwritten Offering to the extent provided herein. PubCo, together with all Shelf Holders proposing to distribute their securities through such Underwritten Shelf Take-Down, shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected in accordance with Section 2.1(d)(ii)(A). Notwithstanding any other provision of this Section 2.1, if the Underwriter shall advise PubCo that marketing factors (including an adverse effect on the per security offering price) require a limitation of the number of Registrable Securities to be underwritten in an Underwritten Shelf Take-Down, then PubCo shall so advise all Shelf Holders that have requested to participate in such Underwritten Shelf Take-Down, and the number of Registrable Securities that may be included in such Underwritten Shelf Take-Down shall be allocated pro rata among such Shelf Holders in proportion, as nearly as practicable, to the respective amounts of Registrable Securities held by such Shelf Holders at the time of such Underwritten Shelf Take-Down; provided, that any Registrable Securities thereby allocated to a Shelf Holder that exceeds such Shelf Holder’s request shall be reallocated among the remaining Shelf Holders in like manner; and provided, further, that the number of Registrable Securities to be included in such Underwritten Shelf Take-Down shall not be reduced unless all other Equity Securities of PubCo are first entirely excluded from any contemporaneous Underwritten Offering. No Registrable Securities excluded from an Underwritten Shelf Take-Down by reason of the Underwriter’s marketing limitation shall be included in such Underwritten Offering. For the avoidance of doubt, PubCo may include securities for its own account (or for the account of any other Persons) in such Underwritten Shelf Take-Down subject to the limitations of this Section 2.2.
(iii) Marketed Underwritten Shelf Take-Downs. The Shelf Take-Down Initiating Holder submitting an Underwritten Shelf Take-Down Notice shall indicate in such notice that it delivers to PubCo pursuant to Section 2.1(d)(ii) whether it intends for such Underwritten Shelf Take-Down to be Marketed (a “Marketed Underwritten Shelf Take-Down”). Upon receipt of an Underwritten Shelf Take-Down Notice indicating that such Underwritten Shelf Take-Down will be a Marketed Underwritten Shelf Take-Down, PubCo shall promptly (but in any event no later than ten (10) days prior to the expected date of such Marketed Underwritten Shelf Take-Down) give written notice of such Marketed Underwritten Shelf Take-Down to all other Eligible Take-Down Holders of Registrable Securities under such Shelf Registration Statement and any such Eligible Take-Down Holders requesting inclusion in such Marketed Underwritten Shelf Take-Down must respond in writing within five (5) days after the receipt of such notice. Each such Eligible Take-Down Holder that timely delivers any such request shall be permitted to sell in such Marketed Underwritten Shelf Take-Down subject to the terms and conditions of Section 2.1(d)(ii).
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(iv) Non-Marketed Underwritten Shelf Take-Downs and Non- Underwritten Shelf Take-Downs.
(A) Any Shelf Take-Down Initiating Holder may initiate (x) an Underwritten Shelf Take-Down that is Non-Marketed (a “Non-Marketed Underwritten Shelf Take-Down”) or (y) a Shelf Take-Down that is not an Underwritten Shelf Take-Down (a “Non-Underwritten Shelf Take-Down”) by providing written notice thereof to PubCo and, to the extent required by Section 2.1(d)(iv)(B), PubCo shall provide written notice thereof to all other Eligible Take-Down Holders.
(B) With respect to each Non-Marketed Underwritten Shelf Take-Down, the Shelf Take-Down Initiating Holder initiating such Non-Marketed Underwritten Shelf Take-Down shall provide written notice (a “Non-Marketed Underwritten Shelf Take-Down Notice”) of such Non-Marketed Underwritten Shelf Take-Down to PubCo and PubCo shall provide written notice thereof to all other Eligible Take-Down Holders at least forty-eight (48) hours prior to the expected time of the pricing of the applicable Non-Marketed Underwritten Shelf Take-Down, which Non-Marketed Underwritten Shelf Take-Down Notice shall set forth (I) the total number of Registrable Securities expected to be offered and sold in such Non-Marketed Underwritten Shelf Take-Down, (II) the expected timing and plan of distribution of such Non-Marketed Underwritten Shelf Take-Down, (III) an invitation to each Eligible Take-Down Holder to elect (such Eligible Take-Down Holders who make such an election being “Take-Down Tagging Holders” and, together with the Shelf Take-Down Initiating Holders and all other Persons (other than any Affiliates of the Shelf Take-Down Initiating Holders) who otherwise are Transferring, or have exercised a contractual or other right to Transfer, Registrable Securities in connection with such Non-Marketed Underwritten Shelf Take-Down, the “Non-Marketed Underwritten Shelf Take-Down Selling Holders”) to include in the Non-Marketed Underwritten Shelf Take-Down Registrable Securities held by such Take-Down Tagging Holder (but subject to Section 2.1(d)(ii)(B)) and (IV) the action or actions required (including the timing thereof) in connection with such Non-Marketed Underwritten Shelf Take-Down with respect to each Eligible Take-Down Holder that elects to exercise such right (including the delivery of one or more stock certificates representing Registrable Securities of such Eligible Take-Down Holder to be sold in such Non-Marketed Underwritten Shelf Take-Down).
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(C) Upon delivery of a Non-Marketed Underwritten Shelf Take-Down Notice, each Eligible Take-Down Holder may elect to sell Registrable Securities in such Non-Marketed Underwritten Shelf Take-Down, at the same price per Registrable Security and pursuant to the same terms and conditions with respect to payment for the Registrable Securities as agreed to by the Shelf Take-Down Initiating Holders, by sending an irrevocable written notice (a “Take-Down Participation Notice”) to PubCo within the time period specified in such Non-Marketed Underwritten Shelf Take-Down Notice (which time period shall be at least twenty-four (24) hours prior to the expected time of the pricing of the applicable Non-Marketed Underwritten Shelf Take-Down), indicating their election to sell up to the number of Registrable Securities in the Non-Marketed Underwritten Shelf Take-Down specified by such Eligible Take-Down Holder in such Take-Down Participation Notice (but, in all cases, subject to Section 2.1(d)(ii)(B)). Following the time period specified in such Non-Marketed Underwritten Shelf Take-Down Notice, each Take-Down Tagging Holder that has delivered a Take-Down Participation Notice shall be permitted to sell in such Non-Marketed Underwritten Shelf Take-Down on the terms and conditions set forth in the Non-Marketed Underwritten Shelf Take-Down Notice, concurrently with the Shelf Take-Down Initiating Holders and the other Non-Marketed Underwritten Shelf Take-Down Selling Holders, the number of Registrable Securities calculated pursuant to Section 2.1(d)(ii)(B). It is understood that in order to be entitled to exercise their right to sell Registrable Securities in a Non-Marketed Underwritten Shelf Take-Down pursuant to this Section 2.1(d)(iv), each Take-Down Tagging Holder must agree to make the same representations, warranties, covenants, indemnities and agreements, if any, as the Shelf Take-Down Initiating Holders agree to make in connection with the Non-Marketed Underwritten Shelf Take-Down, with such additions or changes as are required of such Take-Down Tagging Holder by the Underwriters (if applicable).
(D) Notwithstanding the delivery of any Non-Marketed Underwritten Shelf Take-Down Notice, all determinations as to whether to complete any Non-Marketed Underwritten Shelf Take-Down and as to the timing, manner, price and other terms and conditions of any Non-Marketed Underwritten Shelf Take-Down shall be at the sole discretion of the applicable Shelf Take-Down Initiating Holder, and PubCo agrees to cooperate in facilitating any Non-Marketed Underwritten Shelf Take-Down pursuant to Section 2.1(d). Each of the Eligible Take-Down Holders agrees to reasonably cooperate with each of the other Eligible Take-Down Holders and PubCo to establish notice, delivery and documentation procedures and measures to facilitate such other Eligible Take-Down Holders’ participation in Non-Marketed Underwritten Shelf Take-Downs pursuant to this Section 2.1(d).
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(E) With respect to each Non-Underwritten Shelf Take-Down, the Shelf Take-Down Initiating Holder initiating such Non-Underwritten Shelf Take-Down shall provide written notice of such Non-Underwritten Shelf Take-Down to PubCo at least forty-eight (48) hours prior to the expected time of such Non-Underwritten Shelf Take-Down, which shall set forth (I) the total number of Registrable Securities expected to be offered and sold in such Non-Underwritten Shelf Take-Down, (II) the expected timing and plan of distribution of such Non-Underwritten Shelf Take-Down, and (III) the action or actions required (including the timing thereof) in connection with such Non-Underwritten Shelf Take-Down.
Section 2.2. Demand Registrations.
(a) Holders’ Demand for Registration. Subject to Section 2.2(d), if, at a time when a Shelf Registration Statement is not effective pursuant to Section 2.1, PubCo shall receive from an Eligible Demand Participation Holder (the then Eligible Demand Participation Holder, the “Demand Initiating Holder”) a written demand that PubCo effect any Registration in connection with an Underwritten Offering other than a Shelf Registration or a Shelf Take-Down (a “Demand Registration”) of Registrable Securities held by such Holders having a reasonably anticipated net aggregate offering price (after deduction of Underwriter commissions and offering expenses) of at least $200,000,000, PubCo will:
(i) promptly (but in any event within five (5) days prior to the date such Demand Registration becomes effective under the Securities Act) give written notice of the proposed Demand Registration to all other Eligible Demand Participation Holders; and
(ii) use its commercially reasonable efforts to effect such registration as soon as practicable as will permit or facilitate the sale and distribution of all or such portion of such Demand Initiating Holders’ Registrable Securities as are specified in such demand, together with all or such portion of the Registrable Securities of any other Eligible Demand Participation Holders joining in such demand as are specified in a written demand received by PubCo within five (5) days after such written notice is given; provided that PubCo shall not be obligated to file any Registration Statement or other disclosure document pursuant to this Section 2.2 (but shall be obligated to continue to prepare such Registration Statement or other disclosure document) if the filing or effectiveness of such Registration Statement at any time would require PubCo to make an Adverse Disclosure or would require the inclusion in such Registration Statement of financial statements that are unavailable to PubCo for reasons beyond PubCo’s control; provided, however, that PubCo shall have an additional period (each, a “Demand Delay”) of not more than ninety (90) days within which to file such Registration Statement; provided, however, that PubCo shall not exercise, in any twelve (12) month period, (x) more than two (2) Demand Delays pursuant to this Section 2.2(a) and Shelf Suspensions pursuant to Section 2.1(c) in the aggregate, unless consented to in writing by the Eligible Demand Participation Holders holding a majority of the Registrable Securities held by all Eligible Demand Participation Holders or (y) aggregate Demand Delays pursuant to this Section 2.2(a)(ii) and Shelf Suspensions pursuant to Section 2.1(c) of more than one hundred fifty (150) days. Each Eligible Demand Participation Holder shall keep confidential the fact that a Demand Delay is in effect and the contents of any notice by PubCo of a Demand Delay for the permitted duration of the Demand Delay or until otherwise notified by PubCo, except (A) for disclosure to such Eligible Demand Participation Holder’s employees, agents and professional advisers who need to know such information and are obligated to keep it confidential, (B) for disclosures to the extent required in order to comply with reporting obligations to its limited partners who have agreed to keep such information confidential or (C) as required by law.
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(b) Underwriting. If the Demand Initiating Holders intend to distribute the Registrable Securities covered by their demand by means of an Underwritten Offering, they shall so advise PubCo as part of their demand made pursuant to this Section 2.2, and PubCo shall include such information in the written notice referred to in Section 2.2(a)(i). In such event, the right of any Holder to registration pursuant to this Section 2.2 shall be conditioned upon such Holder’s participation in such Underwritten Offering and the inclusion of such Holder’s Registrable Securities in the Underwritten Offering to the extent provided herein. PubCo, together with all holders of Registrable Securities proposing to distribute their securities through such Underwritten Offering, shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected by PubCo and reasonably satisfactory to Eligible Demand Participation Holders that own a majority of the Registrable Securities to be offered for sale in such Underwritten Offering. Notwithstanding any other provision of this Section 2.2, if the Underwriter shall advise PubCo that marketing factors (including an adverse effect on the per security offering price) require a limitation of the number of Registrable Securities to be underwritten, then PubCo shall so advise all Eligible Demand Participation Holders that have requested to participate in such offering, and the number of Registrable Securities that may be included in the Demand Registration and Underwritten Offering shall be allocated in the following manner: (A) first, to the Eligible Demand Participation Holders on a pro rata basis based on the total number of Registrable Securities held by such Holders, (B) second, to PubCo and (C) third, to other holders of Equity Securities of PubCo exercising a contractual or other right to dispose of such Equity Securities in such Underwritten Offering on a pro rata basis based on the total number of Equity Securities of PubCo held by such persons; provided, that any Registrable Securities or Equity Securities thereby allocated to any such person that exceed such person’s request shall be reallocated among the remaining requesting Eligible Demand Participation Holders or other requesting holders, as applicable, in like manner. No Registrable Securities excluded from the Underwritten Offering by reason of the Underwriter’s marketing limitation shall be included in such Demand Registration. For the avoidance of doubt, PubCo may include securities for its own account (or for the account of any other Persons) in such Demand Registration subject to the limitations of this Section 2.2.
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(c) Effective Registration. PubCo shall be deemed to have effected a Demand Registration if the Registration Statement pursuant to such registration is declared effective by the SEC and PubCo has complied with all of its obligations under this A&R Registration Rights Agreement with respect thereto. No Demand Registration shall be deemed to have been effected if such registration is subsequently interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court unless and until (i) such stop order or injunction is removed, rescinded or otherwise terminated and (ii) a majority-in-interest of the Demand Initiating Holders thereafter affirmatively elect to continue with such Registration and accordingly notify PubCo in writing, but in no event later than five (5) days, of such election; provided that PubCo shall not be obligated or required to file another Registration Statement until the Registration Statement that has been previously filed with respect to a Registration pursuant to a Demand Registration becomes effective or is subsequently terminated.
(d) Restrictions on Registered Offerings. Notwithstanding the rights and obligations set forth in Section 2.1 and/or Section 2.2, in no event shall PubCo be obligated to take any action to effect:
(i) any Demand Registration or Shelf Take-Down at the request of any Company Shareholder prior to the expiration of the Company Shareholder Lock-Up Period;
(ii) any Demand Registration or Shelf Take-Down at the request of the Sponsor prior to the earliest expiration of the Sponsor Lock-Up Period (and, for the avoidance of doubt, solely with respect to the portion of Registrable Securities that have been released from the lock-up restrictions of Section 3.1(c));
(iii) any Demand Registration or Shelf Take-Down at the request of any Insider prior to the earliest expiration of the Insider Lock-Up Period (and, for the avoidance of doubt, solely with respect to the portion of Registrable Securities that have been released from the lock-up restrictions of Section 3.1(b));
(iv) any Demand Registration or Underwritten Shelf Take-Down at the request of the Sponsor, except the Sponsor shall be entitled to initiate one (1) Demand Registration or Underwritten Shelf Take-Down following the earliest expiration of the Sponsor Lock-Up Period in accordance with the terms of this Article II (and, for the avoidance of doubt, solely with respect to the portion of Registrable Securities that have been released from the lock-up restrictions of Section 3.1(c));
(v) more than five (5) Demand Registrations under this Section 2.2;
(vi) more than an aggregate of five (5) Underwritten Offerings (including Underwritten Shelf Take-Downs); or
(vii) any Demand Registration while a Shelf Registration Statement remains outstanding in accordance with the terms of this A&R Registration Rights Agreement.
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A majority-in-interest of the Demand Initiating Holders shall have the right to withdraw from a Demand Registration for any or no reason whatsoever upon written notification to PubCo and any Underwriter or Underwriters of their intention to withdraw from such Demand Registration prior to the effectiveness of the Registration Statement filed with the SEC with respect to the Registration of their Registrable Securities pursuant to such Demand Registration. If a majority-in-interest of the Demand Initiating Holders withdraws from a proposed offering pursuant to this Section 2.2(d), then such registration shall not count as a Demand Registration provided for in Section 2.2.
Notwithstanding anything to the contrary in this Section 2.2(d), in the event that Company Shareholders that are Demand Initiating Holders or Shelf Take-Down Initiating Holders, as applicable, do not sell at least fifty percent (50%) of the Registrable Securities requested to be sold in a Demand Registration or an Underwritten Shelf Take-Down as a result of the Underwriter advising PubCo that marketing factors (including an adverse effect on the per security offering price) require a limitation of the number of Registrable Securities to be underwritten, then for purposes of clauses (v) and (vi) above, such Demand Registration or Underwritten Shelf Take-Down (as applicable) shall not be considered a Demand Registration or Underwritten Shelf Take-Down effected at the request of such Demand Initiating Holder or Shelf Take-Down Initiating Holder.
Section 2.3. Piggyback Registration.
(a) If at any time or from time to time PubCo shall determine to register any of its Equity Securities, either for its own account or for the account of security holders (other than in (1) a registration relating solely to employee benefit plans, (2) a registration statement on Form S-4 or S-8 (or such other similar successor forms then in effect under the Securities Act), (3) a registration pursuant to which PubCo is offering to exchange its own securities for other securities, (4) a registration statement relating solely to dividend reinvestment or similar plans, (5) a Shelf Registration Statement pursuant to which only the initial purchasers and subsequent transferees of debt securities of PubCo or any of its subsidiaries that are convertible for Common Stock and that are initially issued pursuant to Rule 144A and/or Regulation S (or any successor provision) of the Securities Act may resell such notes and sell the Common Stock into which such notes may be converted or (6) a registration pursuant to Section 2.1 or Section 2.2 hereof), PubCo will:
(i) promptly (but in no event less than ten (10) days before the effective date of the relevant Registration Statement) give to each Holder written notice thereof; and
(ii) include in such Registration (and any related qualification under state securities laws or other compliance), and in any Underwritten Offering involved therein, all the Registrable Securities specified in a written request or requests made within five (5) days after receipt of such written notice from PubCo by any Holder or Holders except as set forth in Section 2.3(b) below.
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Notwithstanding anything herein to the contrary, this Section 2.3 shall not apply (i) prior to the expiration of the Company Shareholder Lock-Up Period in respect of any Company Shareholder (excluding the Insiders), (ii) prior to the earliest expiration of the Insider Lock-Up Period in respect of any Insider (and, for the avoidance of doubt, solely with respect to the portion of Registrable Securities that have been released from the lock-up restrictions of Section 3.1(b)), (iii) prior to the earliest expiration of the Sponsor Lock-Up Period in respect of the Sponsor (and, for the avoidance of doubt, solely with respect to the portion of Registrable Securities that have been released from the lock-up restrictions of Section 3.1(c)) or (iv) to any Shelf Take-Down irrespective of whether such Shelf Take-Down is an Underwritten Shelf Take-Down or not an Underwritten Shelf Take-Down.
(b) Underwriting. If the Registration of which PubCo gives notice pursuant to Section 2.3(a) is for an Underwritten Offering, PubCo shall so advise the Holders as a part of the written notice given pursuant to Section 2.3(a)(i). In such event the right of any Holder to participate in such registration pursuant to this Section 2.3 shall be conditioned upon such Holder’s participation in such Underwritten Offering and the inclusion of such Holder’s Registrable Securities in the Underwritten Offering to the extent provided herein. All Holders proposing to dispose of their Registrable Securities through such Underwritten Offering, together with PubCo and the other parties distributing their Equity Securities of PubCo through such Underwritten Offering, shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected for such Underwritten Offering by PubCo. Notwithstanding any other provision of this Section 2.3, if the Underwriters shall advise PubCo that marketing factors (including, without limitation, an adverse effect on the per security offering price) require a limitation of the number of Registrable Securities to be underwritten, then PubCo may limit the number of Registrable Securities to be included in the Registration and Underwritten Offering as follows:
(i) If the Registration is initiated and undertaken for PubCo’s account, PubCo shall so advise all Holders of Registrable Securities that have requested to participate in such offering, and the number of Registrable Securities that may be included in the Registration and Underwritten Offering shall be allocated in the following manner: (A) first, to PubCo, (B) second, to the Holders of Registrable Securities on a pro rata basis based on the total number of Registrable Securities held by such Holders and (C) third, to other holders of Equity Securities of PubCo exercising a contractual or other right to dispose of such Equity Securities in such Underwritten Offering on a pro rata basis based on the total number of Equity Securities of PubCo held by such persons; provided, that any Registrable Securities or Equity Securities thereby allocated to any such person that exceed such person’s request shall be reallocated among the remaining requesting Holders or other requesting holders, as applicable, in like manner.
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(ii) If the Registration is initiated and undertaken at the request of one or more holders of Equity Securities of PubCo who are not Holders, PubCo shall so advise all Holders of Registrable Securities that have requested to participate in such offering, and the number of Registrable Securities that may be included in the Registration and Underwritten Offering shall be allocated in the following manner: (A) first, to the initiating holders of Equity Securities of PubCo exercising a contractual or other right to dispose of such Equity Securities in such Underwritten Offering, on a pro rata basis based on the total number of Equity Securities of PubCo, (B) second, to the Holders of Registrable Securities on a pro rata basis based on the total number of Registrable Securities held by such Holders, (C) third, to PubCo, (D) fourth, to other holders of Equity Securities of PubCo exercising a contractual or other right to dispose of such Equity Securities in such Underwritten Offering on a pro rata basis based on the total number of Equity Securities of PubCo held by such persons; provided, that any Registrable Securities or Equity Securities thereby allocated to any such person that exceed such person’s request shall be reallocated among the remaining requesting Holders or other requesting holders, as applicable, in like manner.
No securities excluded from the Underwritten Offering by reason of the Underwriter’s marketing limitation shall be included in such Registration.
(c) Right to Terminate Registration. PubCo shall have the right to terminate or withdraw any Registration initiated by it under this Section 2.3 prior to the effectiveness of such Registration whether or not any Holder has elected to include Registrable Securities in such Registration.
Section 2.4. Expenses of Registration. All Registration Expenses incurred in connection with all Registrations or other Transfers effected pursuant to or permitted by this A&R Registration Rights Agreement shall be borne by PubCo. It is acknowledged by the Holders that the Holders selling or otherwise Transferring any Registrable Securities in any Registration or Transfer shall bear all incremental selling expenses relating to the sale or Transfer of such Registrable Securities, such as Underwriters’ commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration Expenses,” all reasonable fees and expenses of any legal counsel representing such Holders, in each case pro rata based on the number of Registrable Securities that such Holders have sold or Transferred in such Registration. Any transfer taxes with respect to the sale of Registrable Securities will be borne by the Holder of such Registrable Securities.
Section 2.5. Obligations of PubCo. Whenever required under this Article II to effect the Registration of any Registrable Securities, PubCo shall, as expeditiously as reasonably possible:
(a) prepare and file with the SEC a Registration Statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such Registration Statement to become effective and remain effective until all Registrable Securities covered by such Registration Statement have been sold or are no longer outstanding (such period, the “Effectiveness Period”);
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(b) prepare and file with the SEC such amendments, post-effective amendments and supplements to such Registration Statement and the Prospectus used in connection with such Registration Statement as may be required by the rules, regulations or instructions applicable to the registration form used by PubCo or by the Securities Act or rules and regulations thereunder to keep such Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus;
(c) permit a representative of the Holders, any Underwriter participating in any distribution pursuant to such Registration and any attorney or accountant retained by such Holders, to participate in good faith in the preparation of such Registration Statement and cause PubCo’s officers, directors and employees to supply all information reasonably requested by any such representative, attorney or accountant in connection with the Registration; provided, however, that such representatives enter into a confidentiality agreement, in form and substance reasonably satisfactory to PubCo, prior to the release or disclosure of any such information;
(d) during the Effectiveness Period, furnish to the Holders such numbers of copies of the Registration Statement and the related Prospectus, including all exhibits thereto and documents incorporated by reference therein and a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them; provided that PubCo will not have any obligation to provide any document pursuant to this clause that is available on the SEC’s EDGAR system;
(e) in the event of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing Underwriter(s) of such offering; each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement;
(f) notify each Holder of Registrable Securities covered by such Registration Statement, at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes existing Misstatement;
(g) notify each Holder of Registrable Securities covered by such Registration Statement as soon as reasonably practicable after notice thereof is received by PubCo of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or any order by the SEC or any other regulatory authority preventing or suspending the use of any preliminary or final Prospectus or the initiation or threatening of any proceedings for such purposes, or any notification with respect to the suspension of the qualification of the Registrable Securities for offering or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;
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(h) use its commercially reasonable efforts to prevent the issuance of any stop order suspending the effectiveness of any Registration Statement or of any order preventing or suspending the use of any preliminary or final Prospectus and, if any such order is issued, to use commercially reasonable efforts to obtain the withdrawal of any such order as soon as reasonably practicable;
(i) use its commercially reasonable efforts to register or qualify, and cooperate with the Holders of Registrable Securities covered by such Registration Statement, the Underwriters, if any, and their respective counsel, in connection with the Registration or qualification of such Registrable Securities for offer and sale under the blue sky or securities laws of each state and other jurisdiction of the United States as any such Holder or Underwriters, if any, or their respective counsel reasonably request in writing, and do any and all other things reasonably necessary or advisable to keep such Registration or qualification in effect for such period as required by Section 2.1(b) and Section 2.2(c), as applicable; provided, that PubCo shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or take any action which would subject it to taxation or service of process in any such jurisdiction where it is not then so subject;
(j) in the case of an Underwritten Offering, obtain for delivery to the Underwriters an opinion or opinions from counsel for PubCo, dated the date of the closing under the underwriting agreement, in customary form, scope and substance, which opinions shall be reasonably satisfactory to the managing Underwriter;
(k) in the case of an Underwritten Offering, obtain for delivery to PubCo and the Underwriters a comfort letter from PubCo’s independent certified public accountants in customary form and covering such matters of the type customarily covered by comfort letters as the managing Underwriter reasonably requests;
(l) use its commercially reasonable efforts to list the Registrable Securities that are covered by such Registration Statement with any securities exchange or automated quotation system on which the Common Stock or other Equity Securities of PubCo, as applicable, are then listed;
(m) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by the applicable Registration Statement from and after a date not later than the effective date of such Registration Statement;
(n) cooperate with Holders including Registrable Securities in such Registration and the managing Underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold, such certificates to be in such denominations and registered in such names as such Holders or the managing Underwriters may request at least two (2) Business Days prior to any sale of Registrable Securities;
(o) make available to its security holders, as soon as reasonably practicable, an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter by the SEC);
(p) in the case of an Underwritten Offering that is Marketed, cause appropriate personnel of PubCo to participate in the customary “road show” presentations that may be reasonably requested by the managing Underwriter; and
(q) otherwise, in good faith, reasonably cooperate with, and take such customary actions as may reasonably be requested by, the Holders, in connection with such Registration.
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Section 2.6. Indemnification.
(a) PubCo will, and does hereby undertake to, indemnify and hold harmless each Holder of Registrable Securities and each of such Holder’s officers, directors, partners, members, stockholders and agents, legal counsel and accountants for each such Holder, any underwriter (as defined in the Securities Act) for each such Holder and each Person, if any, who controls such Holder, within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act against all claims, losses, damages, liabilities and expenses (including reasonable attorneys’ fees) arising out of or based upon any Misstatement or alleged Misstatement or any violation or alleged violation by PubCo (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law; provided that PubCo will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission made in reliance and in conformity with written information furnished to PubCo by such Holder expressly for use therein.
(b) Each Holder (if Registrable Securities held by or issuable to such Holder are included in such Registration, qualification, compliance or sale pursuant to this Article II) will, and does hereby undertake to, indemnify and hold harmless, severally and not jointly, PubCo and each of its officers who has signed the Registration Statement, directors, partners, members, stockholders and agents, legal counsel and accountants for PubCo, any underwriter (as defined in the Securities Act), any other Holder selling securities in such Registration Statement, any controlling Person of any such underwriter or other Holder and each Person, if any, who controls PubCo within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, against all claims, losses, damages, liabilities and expenses (including reasonable attorneys’ fees) (or actions in respect thereof) arising out of or based upon (i) any Misstatement or alleged Misstatement or (ii) any violation or alleged violation by PubCo (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law, but in the case of clause (i), only to the extent, that such Misstatement or alleged Misstatement was made in such Registration Statement, prospectus, offering circular, free writing prospectus or other document, in reliance upon and in conformity with written information that relates to such Holder in its capacity as a selling security Holder and was furnished to PubCo by such Holder expressly for use therein; provided, however, that the aggregate liability of each Holder hereunder shall be limited to the net proceeds after underwriting discounts and commissions received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation, except in the case of fraud or willful misconduct by such Holder.
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(c) Each party entitled to indemnification under this Section 2.6 (the “Indemnified Party”) shall give notice to the party required to provide such indemnification (the “Indemnifying Party”) of any claim as to which indemnification may be sought promptly after such Indemnified Party has actual knowledge thereof, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be subject to approval by the Indemnified Party (whose approval shall not be unreasonably withheld) and the Indemnified Party may participate in such defense at the Indemnifying Party’s expense if representation of such Indemnified Party would be, in the reasonable judgment of the Indemnified Party, inappropriate due to an actual or potential conflict of interest between such Indemnified Party and any other party represented by such counsel in such proceeding or there may be reasonable defenses available to the Indemnified Party that are different from or additional to those available to the Indemnifying Party; and provided, further, that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 2.6, except to the extent that such failure to give notice materially prejudices the Indemnifying Party in the defense of any such claim or any such litigation. An Indemnifying Party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such Indemnifying Party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. If such defense is assumed by the Indemnifying Party, the Indemnifying Party shall not be subject to any liability for any settlement made by the Indemnified Party without its consent (but such consent shall not be unreasonably withheld). No Indemnifying Party shall, without the consent of the Indemnified Party, not to be unreasonably withheld or delayed, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the Indemnifying Party pursuant to the terms of such settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation.
(d) In order to provide for just and equitable contribution in case indemnification is prohibited or limited by law, the Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any Misstatement or alleged Misstatement, has been made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and such Person’s relative intent, knowledge, access to information and opportunity to correct or prevent such actions; provided, however, that in any case, (i) no Holder will be required to contribute any amount in excess of the net proceeds after underwriting discounts and commissions received by such Holder upon the sale of the Registrable Securities giving rise to such contribution obligation and (ii) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 2.6(d) were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this Section 2.6(d).
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(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in any underwriting agreement entered into in connection with any Underwritten Offering conflict with the foregoing provisions, the provisions in such underwriting agreement shall control.
Section 2.7. Information by Holder. The Holder or Holders of Registrable Securities included in any Registration shall furnish to PubCo such information regarding such Holder or Holders and the distribution proposed by such Holder or Holders as PubCo may reasonably request in writing and as shall be required in connection with any Registration, qualification or compliance referred to in this Article II. Each Holder agrees, if requested in writing by PubCo, to represent to PubCo the total number of Registrable Securities held by such Holder in order for PubCo to make determinations under this A&R Registration Rights Agreement, including for purposes of Section 2.9 hereof. Notwithstanding anything to the contrary contained in this A&R Registration Rights Agreement, if any Holder does not provide PubCo with information requested pursuant to this Section 2.7, PubCo may exclude such Holder’s Registrable Securities from the applicable Registration Statement or Prospectus if PubCo determines, based on the advice of outside counsel, that such information is necessary to effect the Registration and such Holder continues thereafter to withhold such information. No Person may participate in any Underwritten Offering of Equity Securities of PubCo pursuant to a Registration under this A&R Registration Rights Agreement unless such Person completes and executes all customary questionnaires, powers of attorney, custody agreements, indemnities, lock-up agreements, underwriting agreements and other customary documents as may be reasonably required under the terms of such underwriting arrangements. Subject to the minimum thresholds set forth in Section 2.1(d)(ii) and Section 2.2(a) of this A&R Registration Rights Agreement, the exclusion of a Holder’s Registrable Securities as a result of this Section 2.7 shall not affect the registration of the other Registrable Securities to be included in such Registration.
Section 2.8. Delay of Registration. No Holder shall have any right to obtain, and hereby waives any right to seek, an injunction restraining or otherwise delaying any such Registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Article II.
Section 2.9. Rule 144 Reporting. As long as any Holder shall own Registrable Securities, PubCo, at all times while it shall be a reporting company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by PubCo after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange Act. PubCo further covenants that it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to resell or otherwise dispose of shares of Registrable Securities held by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the SEC), including providing any customary legal opinions. Upon the request of any Holder, PubCo shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.
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Section 2.10. “Market Stand Off” Agreement. Each Holder hereby agrees with PubCo that, with respect to Underwritten Offerings in which such Holder participates, during such period (which period shall in no event exceed 90 days) following the effective date of a Registration Statement of PubCo (or, in the case of an Underwritten Shelf Take-Down, the date of the filing of a preliminary Prospectus or Prospectus supplement relating to such Underwritten Offering (or if there is no such filing, the first contemporaneous press release announcing commencement of such Underwritten Offering)) as the Holders that own a majority of the Registrable Securities participating in such Underwritten Offering may agree to with the Underwriter or Underwriters of such Underwritten Offering (a “Market Stand-Off Period”), such Holder or its Affiliates shall not sell, pledge, hypothecate, transfer, make any short sale of, loan, grant any option or right to purchase of, or otherwise transfer or dispose of (other than to donees who agree to be similarly bound) any Registrable Securities held by it at any time during such period except Registrable Securities included in such Registration. In connection with any Underwritten Offering contemplated by this Section 2.10, PubCo shall use commercially reasonable efforts to cause each director and executive officer of PubCo to execute a customary lock-up for the Market Stand-Off Period. Each Holder agrees with PubCo that it shall deliver to the Underwriter or Underwriters for any such Underwritten Offering a customary agreement (with customary terms, conditions and exceptions) that is substantially similar to the agreement delivered to the Underwriter or Underwriters by the Holders that own a majority of the Registrable Securities participating in such Registration reflecting their agreement set forth in this Section 2.10; provided, that such agreement shall not be materially more restrictive than any similar agreement entered into by PubCo’s directors and executive officers participating in such Underwritten Offering; provided, further, that such agreement shall not be required unless all Holders are required to enter into similar agreements; provided, further, that such agreement shall provide that any early release of any Holder from the provisions of the terms of such agreement shall be on a pro rata basis among all Holders.
Section 2.11. Other Obligations. In connection with a Transfer of Registrable Securities exempt from Section 5 of the Securities Act or through any broker-dealer transactions described in the plan of distribution set forth within the Prospectus and pursuant to the Registration Statement of which such Prospectus forms a part, PubCo shall, subject to applicable Law, as interpreted by PubCo with the advice of counsel, and the receipt of any customary documentation required from the applicable Holders in connection therewith, (a) promptly instruct its transfer agent to remove any restrictive legends applicable to the Registrable Securities being Transferred and (b) cause its legal counsel to deliver the necessary legal opinions, if any, to the transfer agent in connection with the instruction under clause (a). In addition, PubCo shall cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders, in connection with the aforementioned Transfers; provided, however, that PubCo shall have no obligation to participate in any “road shows” or assist with the preparation of any offering memoranda or related documentation with respect to any Transfer of Registrable Securities in any transaction that does not constitute an Underwritten Offering.
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Section 2.12. Term. Article II shall terminate on the earlier of (i) the seventh (7th) anniversary of the date of this A&R Registration Rights Agreement and (ii) with respect to any Holder on the date that such Holder no longer holds any Registrable Securities. The provisions of Section 2.6 shall survive any such termination with respect to such Holder.
Section 2.13. Other Registration Rights. Other than the registration rights set forth in the Original RRA, PubCo represents and warrants that no Person, other than a Holder of Registrable Securities pursuant to this A&R Registration Rights Agreement, has any right to require PubCo to register any securities of PubCo for sale or to include such securities of PubCo in any Registration Statement filed by PubCo for the sale of securities for its own account or for the account of any other Person. Further, each of PubCo and the Sponsor represents and warrants that this A&R Registration Rights Agreement supersedes any other registration rights agreement or agreement (including the Original RRA).
Section 2.14. Termination of Original RRA. Upon the Closing, PubCo and the Sponsor hereby agree that the Original RRA and all of the respective rights and obligations of the parties thereunder are hereby terminated in their entirety and shall be of no further force or effect.
Article III
Lock-Up
Section 3.1. Lock-Up.
(a) Each Company Shareholder (excluding the Insiders) severally, and not jointly, agrees with PubCo not to effect any Transfer, or make a public announcement of any intention to effect such Transfer, of any Lock-Up Shares Beneficially Owned or otherwise held by such Person during the Company Shareholder Lock-Up Period; provided, that such prohibition shall not apply to Transfers to Permitted Transferees (subject to the conditions set forth in Section 3.2(b)).
(b) Each Insider severally, and not jointly, agrees with PubCo not to effect any Transfer, or make a public announcement of any intention to effect such Transfer, of any Lock-Up Shares Beneficially Owned or otherwise held by such Person prior to the expiration of the Insider Lock-Up Period; provided, that such prohibition shall not apply to Transfers to Permitted Transferees (subject to the conditions set forth in Section 3.2(b)).
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(c) The Sponsor agrees with PubCo not to effect any Transfer, or make a public announcement of any intention to effect such Transfer, of any Lock-Up Shares Beneficially Owned or otherwise held by such Person prior to the expiration of the Sponsor Lock-Up Period (as defined below); provided, that such prohibition shall not apply to Transfers to Permitted Transferees (subject to the conditions set forth in Section 3.2(b)).
(d) Any purported Transfer of Lock-Up Shares by the Sponsor, prior to the expiration of the Sponsor Lock-Up Period, the Company Shareholders (excluding the Insiders), prior to the expiration of the Company Shareholder Lock-Up Period, or the Insiders, prior to the expiration of the Insider Lock-Up Period, not in accordance with this A&R Registration Rights Agreement shall be null and void, and PubCo shall refuse to recognize any such Transfer for any purpose.
(e) The Holders acknowledge and agree that, notwithstanding anything to the contrary contained in this A&R Registration Rights Agreement, the Lock-Up Shares Beneficially Owned by such Person shall remain subject to any restrictions on Transfer under applicable securities Laws of any Governmental Entity, including all applicable holding periods under the Securities Act and other rules of the SEC.
Section 3.2. Permitted Transfers.
(a) Notwithstanding anything to the contrary contained in this A&R Registration Rights Agreement, during the Company Shareholder Lock-Up Period and the Insider Lock-Up Period, as applicable, each Company Shareholder (including each Insider) or its Permitted Transferee may Transfer, and during the Sponsor Lock-Up Period, the Sponsor or its Permitted Transferee may Transfer, in each case without the consent of PubCo, any of such Company Shareholder’s Lock-Up Shares or the Sponsor’s Lock-Up Shares, as applicable, to any of such Person’s Permitted Transferees; provided that the restrictions and obligations contained in Section 3.1 and this Section 3.2 will continue to apply to such Lock-Up Shares after any Transfer thereof. Notwithstanding the foregoing, nothing in this A&R Registration Agreement shall prohibit a Company Shareholder from entering into a written plan meeting the requirements of Rule 10b5-1 under the Exchange Act after the date of this A&R Registration Rights Agreement relating to the sale of such Person’s Lock-Up Shares; provided that (A) the securities subject to such plan may not be sold until after the expiration of the applicable Lock-Up Period and (B) PubCo shall not be required to effect, and such Person shall not effect or cause to be effected, any public filing, report or other public announcement regarding the establishment of the trading plan.
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(b) The Transferee of any Lock-Up Shares prior to the expiration of the applicable Lock-Up Period in accordance with the terms of this A&R Registration Rights Agreement shall have no rights under this A&R Registration Rights Agreement, unless, for the avoidance of doubt, such Transferee is a Permitted Transferee. Any Transferee of Lock-Up Shares who is a Permitted Transferee of the Transferor shall be required, at the time of and as a condition to such Transfer, to become a party to this A&R Registration Rights Agreement by executing and delivering a joinder in the form attached to this A&R Registration Rights Agreement as Exhibit B, whereupon such Transferee will be treated as a Party (with the same rights and obligations as the Transferor) for all purposes of this A&R Registration Rights Agreement. Notwithstanding the foregoing provisions of this Section 3.2(b), a Holder may (i) not make a Transfer to a Permitted Transferee if such Transfer has as a purpose the avoidance of or is otherwise undertaken in contemplation of avoiding the restrictions on Transfers in this A&R Registration Rights Agreement (it being understood that the purpose of this provision includes prohibiting the Transfer to a Permitted Transferee (A) that has been formed to facilitate a material change with respect to who or which entities Beneficially Own the underlying Lock-Up Shares, or (B) followed by a change in the relationship between the Holder and the Permitted Transferee (or a change of control of such Holder or Permitted Transferee) after the Transfer with the result and effect that the Holder has indirectly made a Transfer of Lock-Up Shares by using a Permitted Transferee, which Transfer would not have been directly permitted under this Article III had such change in such relationship occurred prior to such Transfer).
Article IV
General Provisions
Section 4.1. Assignment; Successors and Assigns; No Third Party Beneficiaries.
(a) Except as otherwise permitted pursuant to this A&R Registration Rights Agreement, no Party may assign such Party’s rights and obligations under this A&R Registration Rights Agreement, in whole or in part, without the prior written consent of PubCo. Any such assignee may not again assign those rights, other than in accordance with this Article IV. Any attempted assignment of rights or obligations in violation of this Article IV shall be null and void.
(b) Notwithstanding anything to the contrary contained in this A&R Registration Rights Agreement (other than the succeeding sentence of this Section 4.1(b)), (i) prior to the expiration of the applicable Lock-Up Period, a Holder may not Transfer such Holder’s rights or obligations under this A&R Registration Rights Agreement in connection with a Transfer of such Holder’s Registrable Securities, in whole or in part, except in connection with a Transfer pursuant to Section 3.2; and (ii) after the expiration of the applicable Lock-Up Period, a Holder may Transfer such Holder’s rights or obligations under this A&R Registration Rights Agreement in connection with a Transfer of such Holder’s Registrable Securities, in whole or in part, to (x) any of such Holder’s Permitted Transferees, or (y) any Person with the prior written consent of PubCo. Any Transferee of Registrable Securities (other than pursuant to an effective registration statement under the Securities Act or pursuant to a Rule 144 transaction) shall, except as otherwise expressly stated herein, have all the rights and be subject to all of the obligations of the Transferor Holder under this A&R Registration Rights Agreement and shall be required, at the time of and as a condition to such Transfer, to become a party to this A&R Registration Rights Agreement by executing and delivering a joinder in the form attached to this A&R Registration Rights Agreement as Exhibit B. No Transfer of Registrable Securities by a Holder shall be registered on PubCo’s books and records, and such Transfer of Registrable Securities shall be null and void and not otherwise effective, unless any such Transfer is made in accordance with the terms and conditions of this A&R Registration Rights Agreement, and PubCo is hereby authorized by all of the Holders to enter appropriate stop transfer notations on its transfer records to give effect to this A&R Registration Rights Agreement.
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(c) All of the terms and provisions of this A&R Registration Rights Agreement shall be binding upon the Parties and their respective successors, assigns, heirs and Representatives, but shall inure to the benefit of and be enforceable by the successors, assigns, heirs and Representatives of any Party only to the extent that they are permitted successors, assigns, heirs and Representatives pursuant to the terms of this A&R Registration Rights Agreement.
(d) Nothing in this A&R Registration Rights Agreement, express or implied, is intended to confer upon any Party, other than the Parties and their respective permitted successors, assigns, heirs and Representatives, any rights or remedies under this A&R Registration Rights Agreement or otherwise create any third party beneficiary hereto.
Section 4.2. Termination. Article II of this A&R Registration Rights Agreement shall terminate as set forth in Section 2.13. The remainder of this A&R Registration Rights Agreement shall terminate automatically (without any action by any Party) as to each Holder when such Holder, following the Closing Date, ceases to Beneficially Own any Registrable Securities. Notwithstanding anything herein to the contrary, in the event the Merger Agreement terminates in accordance with its terms prior to the Closing, this A&R Registration Rights Agreement shall automatically terminate and be of no further force or effect, without any further action required by the Parties.
Section 4.3. Severability. If any provision of this A&R Registration Rights Agreement is determined to be invalid, illegal or unenforceable by any Governmental Entity, the remaining provisions of this A&R Registration Rights Agreement, to the extent permitted by Law shall remain in full force and effect.
Section 4.4. Entire Agreement; Amendments; No Waiver.
(a) This A&R Registration Rights Agreement, together with the Exhibit to this A&R Registration Rights Agreement, the Merger Agreement and all other Transaction Agreements (as such term is defined in the Merger Agreement), constitute the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous agreements, understandings and discussions, whether oral or written, relating to such subject matter in any way, including the Original RRA, and there are no warranties, representations or other agreements among the Parties in connection with such subject matter except as set forth in this A&R Registration Rights Agreement and therein.
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(b) No provision of this A&R Registration Rights Agreement may be amended or modified in whole or in part at any time without the express written consent of PubCo and the Holders holding in the aggregate more than fifty percent (50%) of the Registrable Securities Beneficially Owned by the Holders; provided that any such amendment or modification that adversely affects any right granted to Holder, solely in their capacity as a holder of the shares of capital stock of PubCo, in a manner that is materially different from the other Holders (in such capacity) shall require the consent of the Holder so affected.
(c) No waiver of any provision or default under, nor consent to any exception to, the terms of this A&R Registration Rights Agreement shall be effective unless in writing and signed by the Party to be bound and then only to the specific purpose, extent and instance so provided.
Section 4.5. Counterparts; Electronic Delivery. This A&R Registration Rights Agreement and any other agreements, certificates, instruments and documents delivered pursuant to this A&R Registration Rights Agreement may be executed and delivered in one or more counterparts and by fax, email or other electronic transmission, each of which shall be deemed an original and all of which shall be considered one and the same agreement. No Party shall raise the use of a fax machine or email to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a fax machine or email as a defense to the formation or enforceability of a contract and each Party forever waives any such defense. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this A&R Registration Rights Agreement or any document to be signed in connection with this A&R Registration Rights Agreement shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, and the parties hereto consent to conduct the transactions contemplated hereunder by electronic means.
Section 4.6. Notices. All notices, demands and other communications to be given or delivered under this A&R Registration Rights Agreement shall be in writing and shall be deemed to have been given (a) when personally delivered (or, if delivery is refused, upon presentment) or received by email (with confirmation of transmission) prior to 5:00 p.m. eastern time on a Business Day and, if otherwise, on the next Business Day, (b) one (1) Business Day following sending by reputable overnight express courier (charges prepaid) or (c) three (3) calendar days following mailing by certified or registered mail, postage prepaid and return receipt requested. Unless another address is specified in writing pursuant to the provisions of this Section 4.6, notices, demands and other communications shall be sent to the addresses indicated below or on the receiving party’s signature page:
if to PubCo, to:
Oklo Inc.
3190 Coronado Dr.
Santa Clara, CA 95054
Attn: Jacob DeWitte
Email:
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with a copy (which shall not constitute notice) to:
Gunderson
Dettmer Stough Villeneuve Franklin & Hachigian, LLP
One Marina Park Drive, Suite 900
Boston, Massachusetts 02210
Attn: David D. Gammell
Andrew Luh
Keith J. Scherer
Email:
if to the Sponsor, to:
AltC Sponsor LLC
640 Fifth Avenue, 12th Floor
New York, NY 10019
Attention: Michael S. Klein
Email:
with a copy (which shall not constitute notice) to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attn: Michael J. Aiello
Matthew J. Gilroy
Amanda Fenster
Email:
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Section 4.7. Governing Law; Waiver of Jury Trial; Jurisdiction. The Law of the State of Delaware shall govern (a) all Actions, claims or matters related to or arising from this A&R Registration Rights Agreement (including any tort or non-contractual claims) and (b) any questions concerning the construction, interpretation, validity and enforceability of this A&R Registration Rights Agreement, and the performance of the obligations imposed by this A&R Registration Rights Agreement, in each case without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Law of any jurisdiction other than the State of Delaware. EACH PARTY TO THIS A&R REGISTRATION RIGHTS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION BROUGHT TO RESOLVE ANY DISPUTE BETWEEN OR AMONG ANY OF THE PARTIES (WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THIS A&R REGISTRATION RIGHTS AGREEMENT, THE TRANSACTIONS CONTEMPLATED BY THIS A&R REGISTRATION RIGHTS AGREEMENT AND/OR THE RELATIONSHIPS ESTABLISHED AMONG THE PARTIES UNDER THIS A&R REGISTRATION RIGHTS AGREEMENT. THE PARTIES FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH SUCH PARTY’S LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES SUCH PARTY’S JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. Each of the Parties submits to the exclusive jurisdiction of first, the Chancery Court of the State of Delaware or if such court declines jurisdiction, then to the Federal District Court for the District of Delaware, in any Action arising out of or relating to this A&R Registration Rights Agreement, agrees that all claims in respect of the Action shall be heard and determined in any such court and agrees not to bring any Action arising out of or relating to this A&R Registration Rights Agreement in any other courts. Each Party irrevocably consents to the service of process in any such Action by the mailing of copies thereof by registered or certified mail, postage prepaid, to such Party, at its address for notices as provided in Section 4.6 of this A&R Registration Rights Agreement, such service to become effective ten (10) days after such mailing. Each Party hereby irrevocably waives any objection to such service of process and further irrevocably waives and agrees not to plead or claim in any Action commenced hereunder or under any other documents contemplated hereby that service of process was in any way invalid or ineffective. Nothing in this Section 4.7, however, shall affect the right of any Party to serve legal process in any other manner permitted by Law or at equity; provided, that each of the Parties hereby waives any right it may have under the Laws of any jurisdiction to commence by publication any Action with respect to this A&R Registration Rights Agreement. To the fullest extent permitted by applicable Law, each of the Parties hereby irrevocably waives any objection it may now or hereafter have to the laying of venue of any Action arising out of or relating to this in any of the courts referred to in this Section 4.7 and hereby further irrevocably waives and agrees not to plead or claim that any such court is not a convenient forum for any such Action. Each Party agrees that a final judgment in any Action so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by Law or at equity, in any jurisdiction.
Section 4.8. Specific Performance. Each Party hereby agrees and acknowledges that it may be impossible to measure in money the damages that would be suffered if the Parties fail to comply with any of the obligations imposed on them by this A&R Registration Rights Agreement and that, in the event of any such failure, an aggrieved Party will be irreparably damaged and will not have an adequate remedy at Law. Any such Party may, therefore, be entitled (in addition to any other remedy to which such Party may be entitled at Law or in equity) to seek injunctive relief, including specific performance, to enforce such obligations, without the posting of any bond.
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Section 4.9. Consents, Approvals and Actions. If any consent, approval or action of the Company Shareholders is required at any time pursuant to this A&R Registration Rights Agreement, such consent, approval or action shall be deemed given if the holders of a majority of the outstanding Equity Securities of PubCo held by the Company Shareholders at such time provide such consent, approval or action in writing at such time.
Section 4.10. Not a Group; Independent Nature of Holders’ Obligations and Rights. The Holders and PubCo agree that the arrangements contemplated by this A&R Registration Rights Agreement are not intended to constitute the formation of a “group” (as defined in Section 13(d)(3) of the Exchange Act). Each Holder agrees that, for purposes of determining beneficial ownership of such Holder, it shall disclaim any beneficial ownership by virtue of this A&R Registration Rights Agreement of PubCo’s Equity Securities owned by the other Holders, and PubCo agrees to recognize such disclaimer in its Exchange Act and Securities Act reports. The obligations of each Holder under this A&R Registration Rights Agreement are several and not joint with the obligations of any other Holder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder under this A&R Registration Rights Agreement. Nothing contained herein, and no action taken by any Holder pursuant hereto, shall be deemed to constitute the Holders as, and PubCo acknowledges that the Holders do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated by this A&R Registration Rights Agreement, and PubCo acknowledges that the Holders are not acting in concert or as a group, and PubCo shall not assert any such claim, with respect to such obligations or the transactions contemplated by this A&R Registration Rights Agreement. The decision of each Holder to enter into this A&R Registration Rights Agreement has been made by such Holder independently of any other Holder. Each Holder acknowledges that no other Holder has acted as agent for such Holder in connection with such Holder making its investment in PubCo and that no other Holder will be acting as agent of such Holder in connection with monitoring such Holder’s investment in the Common Stock or enforcing its rights under this A&R Registration Rights Agreement. PubCo and each Holder confirms that each Holder has had the opportunity to independently participate with PubCo and its subsidiaries in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Holder shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this A&R Registration Rights Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose. The use of a single agreement to effectuate the rights and obligations contemplated hereby was solely in the control of PubCo, not the action or decision of any Holder, and was done solely for the convenience of PubCo and its subsidiaries and not because it was required to do so by any Holder. It is expressly understood and agreed that each provision contained in this A&R Registration Rights Agreement is between PubCo and a Holder, solely, and not between PubCo and the Holders collectively and not between and among the Holders.
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Section 4.11. Representations and Warranties of the Parties. Each of the Parties hereby represents and warrants to each of the other Parties as follows:
(a) Such Party, to the extent applicable, is duly organized or incorporated, validly existing and in good standing under the laws of the jurisdiction of its organization or incorporation and has all requisite power and authority to conduct its business as it is now being conducted and is proposed to be conducted.
(b) Such Party has the full power, authority and legal right to execute, deliver and perform this A&R Registration Rights Agreement. The execution, delivery and performance of this A&R Registration Rights Agreement have been duly authorized by all necessary action, corporate or otherwise, of such Party. This A&R Registration Rights Agreement has been duly executed and delivered by such Party and constitutes their legal, valid and binding obligation, enforceable against it, him or her in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally.
(c) The execution and delivery by such Party of this A&R Registration Rights Agreement, the performance by such Party of their obligations hereunder by such Party does not and will not violate (i) in the case of Parties who are not individuals, any provision of its by-laws, charter, articles of association, partnership agreement or other similar organizational document, (ii) any provision of any material agreement to which it, he or she is a Party or by which it, he or she is bound or (iii) any law, rule, regulation, judgment, order or decree to which it, he or she is subject.
(d) Such Party is not currently in violation of any law, rule, regulation, judgment, order or decree, which violation could reasonably be expected at any time to have a material adverse effect upon such Party’s ability to enter into this A&R Registration Rights Agreement or to perform their obligations hereunder.
(e) There is no pending legal action, suit or proceeding that would materially and adversely affect the ability of such Party to enter into this A&R Registration Rights Agreement or to perform their obligations hereunder.
Section 4.12. No Third Party Liabilities. This A&R Registration Rights Agreement may only be enforced against the named parties hereto. All claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate to any of this A&R Registration Rights Agreement, or the negotiation, execution or performance of this A&R Registration Rights Agreement (including any representation or warranty made in or in connection with this A&R Registration Rights Agreement or as an inducement to enter into this A&R Registration Rights Agreement), may be made only against the Persons that are expressly identified as parties hereto, as applicable; and no past, present or future direct or indirect director, officer, employee, incorporator, member, partner, stockholder, Affiliate, portfolio company in which any such Party or any of its investment fund Affiliates have made a debt or equity investment (and vice versa), agent, attorney or Representative of any Party hereto (including any Person negotiating or executing this A&R Registration Rights Agreement on behalf of a Party hereto), unless a Party to this A&R Registration Rights Agreement, shall have any liability or obligation with respect to this A&R Registration Rights Agreement or with respect any claim or cause of action (whether in contract or tort) that may arise out of or relate to this A&R Registration Rights Agreement, or the negotiation, execution or performance of this A&R Registration Rights Agreement (including a representation or warranty made in or in connection with this A&R Registration Rights Agreement or as an inducement to enter into this A&R Registration Rights Agreement).
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Section 4.13. Legends. Without limiting the obligations of PubCo set forth in Section 2.11, each of the Holders acknowledges that (i) no Transfer, hypothecation or assignment of any Registrable Securities Beneficially Owned by such Holder may be made except in compliance with applicable federal and state securities laws and (ii) PubCo shall (x) place customary restrictive legends on the certificates or book entries representing the Registrable Securities subject to this A&R Registration Rights Agreement and (y) remove such restrictive legends at the time the applicable Transfer and other restrictions contemplated thereby are no longer applicable to the Registrable Securities represented by such certificates or book entries.
Section 4.14. Adjustments. If there are any changes in the Common Stock as a result of stock split, stock dividend, combination or reclassification, or through merger, consolidation, recapitalization or other similar event, appropriate adjustment shall be made in the provisions of this A&R Registration Rights Agreement, as may be required, so that the rights, privileges, duties and obligations under this A&R Registration Rights Agreement shall continue with respect to the Common Stock as so changed.
[Signature Pages Follow]
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IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| PUBCO: | |||
| OKLO INC. (f/k/a ALTC ACQUISITION CORP.) | |||
| By: | /s/ Jay Taragin | ||
| Name: | Jay Taragin | ||
| Title: | Chief Financial Officer | ||
[Signature Page to A&R Registration Rights Agreement]
| SPONSOR: | |||
| ALTC SPONSOR LLC | |||
| By: | /s/ Jay Taragin | ||
| Name: | Jay Taragin | ||
| Title: | Chief Financial Officer | ||
[Signature Page to A&R Registration Rights Agreement]
COMPANY SHAREHOLDERS:
MITHRIL II, L.P. | |||
| By: | /s/ Ajay Royan | ||
| Name: | Ajay Royan | ||
| Title: | Managing General Partner | ||
[Signature Page to A&R Registration Rights Agreement]
COMPANY SHAREHOLDERS:
DATA COLLECTIVE IV, L.P. | |||
| By: | /s/ Zachary Bogue | ||
| Name: | Zachary Bogue | ||
| Title: | Managing Member | ||
[Signature Page to A&R Registration Rights Agreement]
COMPANY SHAREHOLDERS:
SAXON ROAD CAPITAL MANAGEMENT IV, LLC
By: ZNM Capital Management, its Managing Member
| |||
| By: | /s/ Zachary Bogue | ||
| Name: | Zachary Bogue | ||
| Title: | Managing Member | ||
[Signature Page to A&R Registration Rights Agreement]
INSIDERS:
HYDRAZINE CAPITAL II, L.P.
| |||
| By: | /s/ Sam Altman | ||
| Name: | Sam Altman | ||
| Title: | Manager | ||
[Signature Page to A&R Registration Rights Agreement]
| INSIDERS: | |
| /s/ Jacob DeWitte | |
| Name: Jacob DeWitte |
[Signature Page to A&R Registration Rights Agreement]
| INSIDERS: | |
| /s/ Caroline Cochran | |
| Name: Caroline Cochran |
[Signature Page to A&R Registration Rights Agreement]
| INSIDERS: | |
| /s/ Paul Cochran | |
| Name: Paul Cochran |
[Signature Page to A&R Registration Rights Agreement]
| INSIDERS: | |
| /s/ Julie Cochran | |
| Name: Julie Cochran |
[Signature Page to A&R Registration Rights Agreement]
| INSIDERS: | |
| /s/ Isaac Cochran | |
| Name: Isaac Cochran |
[Signature Page to A&R Registration Rights Agreement]
| INSIDERS: | |
| /s/ Melissa Cochran | |
| Name: Melissa Cochran |
[Signature Page to A&R Registration Rights Agreement]
| INSIDERS: | |
| /s/ Michael DeWitte | |
| Name: Michael DeWitte |
[Signature Page to A&R Registration Rights Agreement]
| INSIDERS: | |
| /s/ Barbara DeWitte | |
| Name: Barbara DeWitte |
[Signature Page to A&R Registration Rights Agreement]
| INSIDERS: | |
| /s/ Jason DeWitte | |
| Name: Jason DeWitte |
[Signature Page to A&R Registration Rights Agreement]
| INSIDERS: | |
| /s/ Joshua DeWitte | |
| Name: Joshua DeWitte |
[Signature Page to A&R Registration Rights Agreement]
| INSIDERS: | |
| /s/ Mary DeWitte | |
| Name: Mary DeWitte |
[Signature Page to A&R Registration Rights Agreement]
Exhibit A
Form of Joinder
This Joinder (this “Joinder”) to the Amended and Restated Registration Rights Agreement, made as of ___________, is executed by ___________ (“Joining Company Shareholder”).
WHEREAS, pursuant to the Merger Agreement, Joining Company Shareholder will receive shares of Common Stock; and
WHEREAS, Joining Company Shareholder is required to become a party to that certain Amended and Restated Registration Rights Agreement, dated as of May 9, 2024, among Oklo Inc. (f/k/a AltC Acquisition Corp.), a Delaware corporation ( “PubCo”) and the other persons party thereto (the “A&R Registration Rights Agreement”) by executing and delivering this Joinder, whereupon such Joining Company Shareholder will be treated as a Party (with the same rights and obligations as other Insiders party thereto) for all purposes of the A&R Registration Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows:
Section 1. Definitions. To the extent capitalized words used in this Joinder are not defined in this Joinder, such words shall have the respective meanings set forth in the A&R Registration Rights Agreement.
Section 2. Joinder. Joining Company Shareholder hereby acknowledges and agrees that (a) such Joining Company Shareholder has received and read the A&R Registration Rights Agreement, and (b) such Joining Company Shareholder will be treated as a Party (with the same rights and obligations as other Company Shareholders party thereto and, if applicable, the other Insiders party thereto) for all purposes of the Amended and Restated Registration Rights Agreement.
Section 3. Notice. Any notice, demand or other communication under the Amended and Restated Registration Rights Agreement to Joining Company Shareholder shall be given to Joining Company Shareholder at the address set forth on the signature page hereto in accordance with Section 4.6 of the A&R Registration Rights Agreement.
Section 4. Governing Law. This Joinder shall be governed by and construed in accordance with the law of the State of Delaware.
Section 5. Counterparts; Electronic Delivery. This Joinder may be executed and delivered in one or more counterparts, by fax, email or other electronic transmission, each of which shall be deemed an original and all of which shall be considered one and the same agreement. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Joinder or any document to be signed in connection with this Joinder shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, and the parties hereto consent to conduct the transactions contemplated hereunder by electronic means.
1
IN WITNESS WHEREOF, this Joinder has been duly executed and delivered by the parties as of the date first above written.
| JOINING COMPANY SHAREHOLDER: | ||
| By: | ||
| Name: | ||
| Title: | ||
| Address for notices: | ||
| Name: | ||
| Address: |
[Signature Page to Form of Joinder]
Exhibit B
Form of Joinder
This Joinder (this “Joinder”) to the A&R Registration Rights Agreement, made as of ___________, is between ___________ (“Transferor”) and ___________ (“Transferee”).
WHEREAS, as of the date hereof, Transferee is acquiring Registrable Securities (the “Acquired Interests”) from Transferor;
WHEREAS, Transferor is a party to that certain A&R Registration Rights Agreement, dated as of May 9, 2024, among Oklo Inc. (f/k/a AltC Acquisition Corp.), a Delaware corporation (“PubCo”) and the other persons party thereto (the “A&R Registration Rights Agreement”); and
WHEREAS, Transferee is required, at the time of and as a condition to such Transfer, to become a party to the A&R Registration Rights Agreement by executing and delivering this Joinder, whereupon such Transferee will be treated as a Party (with the same rights and obligations as the Transferor) for all purposes of the A&R Registration Rights Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows:
Section 1. Definitions. To the extent capitalized words used in this Joinder are not defined in this Joinder, such words shall have the respective meanings set forth in the A&R Registration Rights Agreement.
Section 2. Acquisition. The Transferor hereby Transfers to the Transferee all of the Acquired Interests.
Section 3. Joinder. Transferee hereby acknowledges and agrees that (a) such Transferee has received and read the A&R Registration Rights Agreement, (b) such Transferee is acquiring the Acquired Interests in accordance with and subject to the terms and conditions of the A&R Registration Rights Agreement and (c) such Transferee will be treated as a Party (with the same rights and obligations as the Transferor) for all purposes of the A&R Registration Rights Agreement.
Section 4. Notice. Any notice, demand or other communication under the A&R Registration Rights Agreement to Transferee shall be given to Transferee at the address set forth on the signature page hereto in accordance with Section 4.6 of the A&R Registration Rights Agreement.
Section 5. Governing Law. This Joinder shall be governed by and construed in accordance with the law of the State of Delaware.
Section 6. Counterparts; Electronic Delivery. This Joinder may be executed and delivered in one or more counterparts, by fax, email or other electronic transmission, each of which shall be deemed an original and all of which shall be considered one and the same agreement. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Joinder or any document to be signed in connection with this Joinder shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, and the parties hereto consent to conduct the transactions contemplated hereunder by electronic means.
1
IN WITNESS WHEREOF, this Joinder has been duly executed and delivered by the parties as of the date first above written.
| [TRANSFEROR] | ||
| By: | ||
| Name: | ||
| Title: | ||
| Name: | ||
| [TRANSFEREE] | ||
| By: | ||
| Name: | ||
| Title: | ||
| Address for notices: | ||
| Name: | ||
| Address: |
[Signature Page to Form of Joinder]
Exhibit 10.8
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of ________________ between Oklo Inc., a Delaware corporation (the “Company”), and ________________ (“Indemnitee”).
WITNESSETH THAT:
WHEREAS, highly competent persons have become more reluctant to serve corporations as directors or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, the Board of Directors of the Company (the “Board”) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions. At the same time, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself. The Certificate of Incorporation of the Company (as the same may be amended and/or restated from time to time, the “Certificate of Incorporation”) requires indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“DGCL”). The Certificate of Incorporation and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and
WHEREAS, Indemnitee does not regard the protection available under the Certificate of Incorporation and insurance as adequate in the present circumstances, and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified; and
WHEREAS, Indemnitee has certain rights to indemnification and/or insurance provided by Data Collective IV, L.P. (“Data Collective”) which Indemnitee and Data Collective intend to be secondary to the primary obligation of the Company to indemnify Indemnitee as provided herein, with the Company’s acknowledgement and agreement to the foregoing being a material condition to Indemnitee’s willingness to serve on the Board.
NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as a director from and after the date hereof, the parties hereto agree as follows:
1.Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof.
(a)Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section l(a) if, by reason of his Corporate Status (as hereinafter defined), the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company. Pursuant to this Section 1(a), Indemnitee shall be indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him, or on his behalf, in connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful.
(b)Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(b) if, by reason of his Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company. Pursuant to this Section 1(b), Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company; provided, however, if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company unless and to the extent that the Court of Chancery of the State of Delaware shall determine that such indemnification may be made.
(c)Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
(d)Indemnification of Appointing Stockholder. If (i) Indemnitee is or was affiliated with one or more venture capital funds that has invested in the Company (an “Appointing Stockholder”), (ii) the Appointing Stockholder is, or is threatened to be made, a party to or a participant in any Proceeding, and (iii) the Appointing Stockholder’s involvement in the Proceeding results from any claim based on the Indemnitee’s service to the Company as a director or other fiduciary of the Company, the Appointing Stockholder will be entitled to indemnification hereunder for Expenses to the same extent as Indemnitee, and the terms of this Agreement as they relate to procedures for indemnification of Indemnitee and advancement of Expenses shall apply to any such indemnification of Appointing Stockholder.
2.Additional Indemnity. In addition to, and without regard to any limitations on, the indemnification provided for in Section 1 of this Agreement, the Company shall and hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding (including a Proceeding by or in the right of the Company), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of Indemnitee. The only limitation that shall exist upon the Company’s obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth in Sections 6 and 7 hereof) to be unlawful.
3.Contribution.
(a)Whether or not the indemnification provided in Sections 1 and 2 hereof is available, in respect of any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such action, suit or proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Company shall not enter into any settlement of any action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.
(b)Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall contribute to the amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction or events from which such action, suit or proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the transaction or events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable law may require to be considered. The relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.
(c)The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors, or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.
(d)To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
4.Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness, or is made (or asked) to respond to discovery requests, in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
5.Advancement of Expenses. Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and interest free.
6.Procedures and Presumptions for Determination of Entitlement to Indemnification. It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the DGCL and public policy of the State of Delaware. Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement:
(a)To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification. Notwithstanding the foregoing, any failure of Indemnitee to provide such a request to the Company, or to provide such a request in a timely fashion, shall not relieve the Company of any liability that it may have to Indemnitee unless, and to the extent that, such failure actually and materially prejudices the interests of the Company.
(b)Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 6(a) hereof, a determination with respect to Indemnitee’s entitlement thereto shall be made in the specific case by one of the following four methods, which shall be at the election of the Board (1) by a majority vote of the Disinterested Directors (as defined below), even though less than a quorum, (2) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum, (3) if there are no Disinterested Directors or if the Disinterested Directors so direct, by independent legal counsel in a written opinion to the Board, a copy of which shall be delivered to the Indemnitee, or (4) if so directed by the Board, by the stockholders of the Company.
(c)If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6(b) hereof, the Independent Counsel shall be selected as provided in this Section 6(c). The Independent Counsel shall be selected by the Board. Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 13 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after submission by Indemnitee of a written request for indemnification pursuant to Section 6(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the Company’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 6(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 6(b) hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 6(c), regardless of the manner in which such Independent Counsel was selected or appointed.
(d)In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(e)Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise (as hereinafter defined), including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section 6(e) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.
(f)If the person, persons or entity empowered or selected under Section 6 to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such sixty (60) day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and provided further, that the foregoing provisions of this Section 6(f) shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 6(b) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination, the Board or the Disinterested Directors, if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat.
(g)Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel, member of the Board or stockholder of the Company shall act reasonably and in good faith in making a determination regarding the Indemnitee’s entitlement to indemnification under this Agreement. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(h)The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any action, claim or proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim or proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such action, suit or proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.
(i)The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
7.Remedies of Indemnitee.
(a)In the event that (i) a determination is made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 5 of this Agreement, (iii) no determination of entitlement to indemnification is made pursuant to Section 6(b) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within ten (10) days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 6 of this Agreement, Indemnitee shall be entitled to an adjudication in an
(b)appropriate court of the State of Delaware, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification. Indemnitee shall commence such proceeding seeking an adjudication within one hundred eighty (180) days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 7(a). The Company shall not oppose Indemnitee’s right to seek any such adjudication.
(c)In the event that a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section 7 shall be conducted in all respects as a de novo trial on the merits, and Indemnitee shall not be prejudiced by reason of the adverse determination under Section 6(b).
(d)If a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 7, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s misstatement not materially misleading in connection with the application for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(e)In the event that Indemnitee, pursuant to this Section 7, seeks a judicial adjudication of his rights under, or to recover damages for breach of, this Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained by the Company, the Company shall pay on his behalf, in advance, any and all expenses (of the types described in the definition of Expenses in Section 13 of this Agreement) actually and reasonably incurred by him in such judicial adjudication, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery.
(f)The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 7 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement. The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefore) advance, to the extent not prohibited by law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.
(g)Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
8.Non-Exclusivity; Survival of Rights; Insurance; Primacy of Indemnification; Subrogation.
(a)The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the By-laws, any agreement, a vote of stockholders, a resolution of directors of the Company, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the DGCL, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Certificate of Incorporation, By-laws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b)To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents or fiduciaries of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, employee, agent or fiduciary under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has directors’ and officers’ liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.
(c)The Company hereby acknowledges that Indemnitee has certain rights to indemnification, advancement of expenses and/or insurance provided by Data Collective and certain of its affiliates (collectively, the “Fund Indemnitors”). The Company hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of the Fund Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee are secondary), (ii) that it shall be required to advance the full amount of expenses incurred by Indemnitee and shall be liable for the full amount of all Expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement and the Certificate of Incorporation or By-laws of the Company (or any other agreement between the Company and Indemnitee), without regard to any rights Indemnitee may have against the Fund Indemnitors, and (iii) that it irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Fund Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing and the Fund Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of Indemnitee against the Company. The Company and Indemnitee agree that the Fund Indemnitors are express third party beneficiaries of the terms of this Section 8(c).
(d)Except as provided in paragraph (c) above, in the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee (other than against the Fund Indemnitors), who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(e)Except as provided in paragraph (c) above, the Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(f)Except as provided in paragraph (c) above, the Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.
9.Exception to Right of Indemnification. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a)for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision, provided, that the foregoing shall not affect the rights of Indemnitee or the Fund Indemnitors set forth in Section 8(c) above; or
(b)for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of state statutory law or common law; or
(c)in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation, or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
10.Duration of Agreement. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is an officer or director of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding (or any proceeding commenced under Section 7 hereof) by reason of his Corporate Status, whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives.
11.Security. To the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.
12.Enforcement.
(a)The Company expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as an officer or director of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as an officer or director of the Company.
(b)This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.
(c)The Company shall not seek from a court, or agree to, a “bar order” which would have the effect of prohibiting or limiting the Indemnitee’s rights to receive advancement of expenses under this Agreement.
13.Definitions. For purposes of this Agreement:
(a)“Corporate Status” describes the status of a person who is or was a director, officer, employee, agent or fiduciary of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving at the express written request of the Company.
(b)“Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(c)“Enterprise” shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express written request of the Company as a director, officer, employee, agent or fiduciary.
(d)“Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(e)“Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(f)“Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of his or her Corporate Status, by reason of any action taken by him or of any inaction on his part while acting in his or her Corporate Status; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement, but excluding one initiated by an Indemnitee pursuant to Section 7 of this Agreement to enforce his rights under this Agreement.
14.Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. Further, the invalidity or unenforceability of any provision hereof as to either Indemnitee or Appointing Stockholder shall in no way affect the validity or enforceability of any provision hereof as to the other. Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee and Appointing Stockholder indemnification rights to the fullest extent permitted by applicable laws. In the event any provision hereof conflicts with any applicable law, such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.
15.Modification and Waiver. No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
16.Notice By Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices the Company.
17.Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent:
(a)To Indemnitee at the address set forth below Indemnitee signature hereto.
(b)To the Company at:
230 East Caribbean Drive
Sunnyvale, CA 94089
Attention: Chief Executive Officer
With a copy (which shall not constitute notice) to:
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, MA 02109
Attention: David D. Gammell
or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.
18.Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
19.Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
20.Governing Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. The Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, and maintain an agent in the State of Delaware as such party’s agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
SIGNATURE PAGE TO FOLLOW
IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement on and as of the day and year first above written.
| OKLO INC. | ||
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| By: | | |
| Name: | Jacob DeWitte | |
| Title: | Chief Executive Officer | |
| | INDEMNITEE |
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| | Name: |
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| Address: | |
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Exhibit 14.1
Code of Conduct
Effective May 10, 2024
1 Purpose
Oklo Inc.’s (the “Company”) Code of Conduct represents the standards by which we all must operate.
2 Scope
This Policy applies to all Company employees, officers, Board members, independent contractors, consultants, temporary workers, suppliers, and agents (collectively referred to herein as “Company employee” or “Company employees”). Any such person who is not an employee of the Company will comply with these guidelines at the direction of their principal Company contact.
3 Code
3.1 We operate with honesty and integrity
We are open, transparent, and honest. We keep our commitments to each other, to our customers, and to our partners. We endeavor to communicate with our customers, partners, fellow employees, and suppliers in an honest and unambiguous way, and to avoid making any misstatements of fact, making misleading or exaggerated communications, or creating false impressions. We may make mistakes, but we quickly admit and correct them.
3.2 We treat others fairly and respectfully
We foster a respectful work environment free from any form of discrimination, harassment, retaliation, and intimidation. We provide equal opportunity in all aspects of employment. We do not tolerate discrimination, harassment, violence, or threatening behavior of any kind. We treat everyone—fellow employees, customers, partners, and other stakeholders—with dignity and respect.
3.3 We uphold human rights
We respect human rights, provide fair working conditions, and prohibit the use of any forced, compulsory, or child labor by or for Oklo.
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Code of Conduct |
3.4 We are responsible and law abiding
We follow the law. This includes all applicable international, national, and local laws, rules, and regulations. We report wrongdoing, including fraud or illegal acts, if we encounter it. We comply with local and federal laws and regulations.
3.5 We prohibit bribery
Oklo’s policy against bribery is clear—we never make or accept bribes to advance our business. A bribe is something of value that is offered or given to improperly influence a decision. Bribes often consist of money, but they could also be disguised as gifts, trips, entertainment, charitable donations, favors, or jobs. We do not offer or give anything of value for an improper or corrupt purpose, whether in dealings with a government official or the private sector, and regardless of the norms of local custom. For more information, please consult Oklo’s Anti-Bribery Policy, which we are all required to review and follow.
3.6 We avoid conflicts of interest
We have a responsibility to make sound business decisions strictly on the basis of Oklo’s best interests without regard to our personal interests. A conflict of interest can occur when our personal activities, investments, or associations compromise our judgment or ability to act in the best interest of Oklo. We avoid conflicts of interest, or even the appearance of a conflict of interest.
We always disclose any relationships, associations, or activities that may create actual, potential, or perceived conflicts of interest to Oklo’s Chief Financial Officer, General Counsel (if any) or their appointed designees (each, a “Compliance Officer”) as soon as we become aware of any potential for such conflict.
3.7 We respect corporate opportunities
We may not take for ourselves opportunities that are discovered through the use of Oklo property, information, or position, and we will not use Oklo property, information, or position for personal gain, or compete with Oklo in any manner. We owe Oklo a duty to advance its legitimate business interests when business opportunities arise.
3.8 We prohibit insider trading
Federal law prohibits both trading on the basis of material non-public information and “tipping” others by providing material non-pubic information to them. We do not buy or sell stock on the basis of material non-public information, or pass such information to any others, including friends or family. For more information, please consult Oklo’s Insider Trading Policy, which we are all required to review and follow.
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Code of Conduct |
3.9 We safeguard confidential information and protect employee privacy
We are committed to protecting the confidential, proprietary, and private information of our employees, customers, partners, and others with whom we do business. We respect and safeguard the private information and intellectual property entrusted to us by our fellow employees, customers, and third parties, using it only for legitimate business purposes and in accordance with all applicable laws and governing contracts. We are all also responsible for protecting Oklo’s confidential information. The loss of confidential information can be extremely damaging to Oklo. We do not disclose any confidential Oklo information without a valid business purpose and proper authorization by a Compliance Officer. Our obligations in this respect continue even if our employment or other relationship with Oklo ends.
3.10 We are committed to a safe and healthy workplace
We are committed to providing a clean, safe, healthy, secure, and drug-free workplace. Our employees have responsibility for maintaining a safe and healthy workplace by following safety and health rules and practices and by reporting accidents, injuries and unsafe conditions, procedures, or behaviors. We do not tolerate violence and threatening behavior. We prohibit the use, possession, sale, or being under the influence of any illegal substance at Oklo or when representing Oklo in any capacity or conducting Oklo business.
3.11 We maintain accurate and complete business and financial records
We create and maintain financial records in accordance with applicable legal requirements and generally accepted accounting practices. Our SEC reports, disclosures, and other public communications must be full, fair, accurate, timely, and understandable. Although financial reporting and controls are especially applicable to members of Oklo’s Finance Department, we are each responsible for complying with all financial controls and policies. We each acknowledge our responsibility to make sure that appropriate Finance Department personnel are made aware in a timely manner of any fact or issue that might have a material impact on our financial statements or disclosures. We are prohibited from knowingly misrepresenting, omitting or causing others to misrepresent or omit, material facts about Oklo to others, including Oklo’s independent auditors, governmental regulators and self-regulatory organizations.
3.12 We represent Oklo to the public only when authorized
Only those authorized to do so may speak to the press and members of the financial community about Oklo. Authorized individuals are the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Director of Communications and Media, and Director of Investor Relations, or any other employee, third-party consultant, or agent who has been authorized by the Chief Executive Officer, Chief Operating Officer or Chief Financial Officer to speak with a third party with respect to a particular topic. For more information, please consult Oklo’s Investor Relations and Communications Policy.
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Code of Conduct |
3.13 We use social media wisely
We use social media appropriately and responsibly. We do not disclose confidential Oklo information or the confidential information of our customers, suppliers, business partners, or other employees. Only those authorized may speak for Oklo, including through social media channels. For more information, please consult Oklo’s Social Media Policy.
3.14 We deal fairly
We endeavor to deal fairly with our customers, suppliers, competitors, and employees. We should not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation, or any other unfair-dealing. Applicable laws specifically prohibit us from colluding with a competitor. When interacting with a competitor, questions about whether our actions are proper and in compliance with the law should be directed to a Compliance Officer.
3.15 We protect and properly use Oklo assets
Theft, carelessness, and waste have a direct impact on our profitability. We use Oklo assets for legitimate business purposes, and in particular, will use Oklo’s information systems assets in a responsible manner.
3.16 We respect the environment
We conduct our business in an environmentally responsible and sustainable manner, and we are committed to complying with all applicable environmental laws.
3.17 We use common sense and ask questions if necessary
We use common sense in our business dealings and in upholding this Code of Conduct. If we have any questions regarding the matters discussed in this Code of Conduct, we promptly contact our manager or a Compliance Officer for answers.
3.18 We make personal investments appropriately
We may not own, either directly or indirectly, a substantial interest in any business entity that does or seeks to do business with or is in competition with Oklo without providing advance written notice to a Compliance Officer. Investments in publicly traded securities of companies not amounting to more than one percent (1%) of that company’s total outstanding shares are permitted without such advanced approval.
3.19 We avoid certain corporate loans or guarantees
Loans or guarantees of obligations by Oklo to directors, executive officers and/or members of their immediate families are expressly prohibited.
3.20 We abide by antitrust laws
Oklo fully supports fair and open competition and a free market economy. We must not directly or indirectly enter into any formal or informal agreement with competitors that fixes or controls prices, divides or allocates markets, limits the production or sale of products, boycotts certain suppliers or customers, eliminates competition or otherwise unreasonably restrains trade.
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4 Waivers and Violations
4.1 Waivers of the Code of Conduct
Waivers of our Code of Conduct must be approved in writing. Waivers for Board members and executive officers require Board (or a committee of the Board) approval and must be disclosed as required, while waivers involving any other employee, agent, or contractor require the approval of a Compliance Officer.
4.2 Violations of the Code of Conduct, Oklo policies, or the law
Anyone who violates the law, our Code of Conduct, or other Oklo policies or procedures may be disciplined, including termination of employment and/or their business relationship with Oklo, in accordance with applicable legal requirements. Certain violations of this Code of Conduct may be violations of the law, which may result in civil or criminal penalties, and Oklo will cooperate fully with the appropriate authorities in these situations.
5 Reporting and compliance hotline
5.1 Report violations
If we witness—or even suspect—a violation of our Code of Conduct, Oklo policies, or the law, we promptly report it to our manager, to a Compliance Officer, to Oklo’s Chief People and Culture Officer or to any member of Oklo’s executive leadership.
5.2 Compliance hotline
For concerns related to accounting, reporting, and control or fraud, Oklo has established a compliance hotline that we may use to make an anonymous report. To make a good-faith, anonymous report, we may:
| · | Send a letter to a Compliance Officer by mail to Oklo Inc., 3190 Coronado Dr., Santa Clara, CA 95054, Attention: Compliance Officer; or |
| · | Report on our compliance hotline (anonymously or not) online at oklo.allvoices.co For more information, please consult Oklo’s Reporting Policy. |
5.3 Reporting outside the United States
In some locations outside of the United States, anonymous reporting of certain types of issues may not be allowed by local law. If local law prohibits or restricts anonymous reporting, you should reveal your identity when making a report. In those situations, your identity will be kept confidential (unless prohibited by local law), and you will have a right to access and modify your report. If you are in doubt about the requirements of your local law, please contact a Compliance Officer.
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Nothing in the Code of Conduct prevents you from communicating directly with relevant government authorities about potential violations of law, without first notifying Oklo.
6 No retaliation
Oklo takes its non-retaliatory culture very seriously and will not allow anyone to take adverse action, threaten, intimidate, or retaliate if one of us reports a violation or suspected violation in good faith, engages in any protected activity, or cooperates in an investigation. If you believe you are experiencing retaliation, you should promptly report your situation to a Compliance Officer. Oklo considers retaliation itself a violation of this Code of Conduct and will respond accordingly.
7 Compliance
This Code of Conduct will remain in effect unless revoked or modified by the Company in writing. The Company may modify this Code of Conduct from time to time, with or without notice, as laws or other circumstances change. Each Company employee is responsible for reviewing this Code of Conduct periodically and complying with the most current version. The most current version will be available to all Company employees. Any Company employee found to have violated this Code of Conduct may be subject to disciplinary action, up to and including termination of employment. This Code of Conduct does not create a contract of employment and does not alter any employee’s at-will employment status.
If you have any questions regarding this Policy, please consult your manager, a Compliance Officer, Chief People and Culture Officer, or any member of Oklo’s executive leadership team.
8 Revision history
Template version: 1.0
| Revision date | Revision notes | |
| 10 May 2024 | Code of Conduct v1.0 created |
| Oklo Inc. | |
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Exhibit 21.1
Subsidiary of Oklo Inc.
| Subsidiary | Jurisdiction | |||
| Oklo Technologies, Inc. | Delaware |
Exhibit 99.1
OKLO INC.
Index to Consolidated Financial Statements
| PAGE | |
| Consolidated Balance Sheets - March 31, 2024 (Unaudited) and December 31, 2023 | 1 |
| Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - Three Months Ended March 31, 2024 and 2023 | 2 |
| Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Deficiency (Unaudited) - Three Months Ended March 31, 2024 and 2023 | 3 |
| Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended March 31, 2024 and 2023 | 4 |
| Notes to Consolidated Financial Statements (Unaudited) | 5 |
Oklo Inc.
Consolidated Balance Sheets
| As of | ||||||||
March 31, 2024 (unaudited) | December 31, 2023 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 38,018,782 | $ | 9,867,588 | ||||
| Prepaid and other current assets | 5,762,841 | 4,330,465 | ||||||
| Total current assets | 43,781,623 | 14,198,053 | ||||||
| Property and equipment, net | 625,563 | 577,671 | ||||||
| Operating lease right-of-use assets | 33,392 | 82,677 | ||||||
| Other assets | - | 25,361 | ||||||
| Total assets | $ | 44,440,578 | $ | 14,883,762 | ||||
| Liabilities, redeemable convertible preferred stock and stockholders’ deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,499,224 | $ | 2,273,823 | ||||
| Other accrued expenses | 1,112,685 | 835,541 | ||||||
| Operating lease liability | 37,895 | 93,935 | ||||||
| Total current liabilities | 3,649,804 | 3,203,299 | ||||||
| Simple agreement for future equity | 73,067,000 | 46,042,000 | ||||||
| Right of first refusal liability | 25,000,000 | - | ||||||
| Total liabilities | 101,716,804 | 49,245,299 | ||||||
| Commitments and contingencies (Note 13) | ||||||||
| Redeemable convertible preferred stock: | ||||||||
| Redeemable convertible preferred stock, $0.0001 par value – 7,000,000 shares authorized; $25,129,945 aggregate liquidation preference; 6,585,881 shares issued and outstanding at March 31, 2024 and December 31, 2023 | 25,030,520 | 25,030,520 | ||||||
| Stockholders' deficit: | ||||||||
| Common stock, $0.0001 par value – 14,000,000 shares authorized; 5,058,554 and 4,836,577 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively | 506 | 484 | ||||||
| Additional paid-in capital | 3,208,277 | 2,100,903 | ||||||
| Accumulated deficit | (85,515,529 | ) | (61,493,444 | ) | ||||
| Total stockholders’ deficit | (82,306,746 | ) | (59,392,057 | ) | ||||
| Total liabilities, redeemable convertible preferred stock and stockholders’ deficit | $ | 44,440,578 | $ | 14,883,762 | ||||
See accompanying notes to consolidated financial statements.
1
Oklo Inc.
Consolidated Statements of Operations and Comprehensive Loss
(unaudited)
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Operating expenses | ||||||||
| Research and development | $ | 3,660,642 | $ | 1,916,450 | ||||
| General and administrative | 3,709,746 | 1,419,848 | ||||||
| Total operating expenses | 7,370,388 | 3,336,298 | ||||||
| Loss from operations | (7,370,388 | ) | (3,336,298 | ) | ||||
| Other income (loss) | ||||||||
| Change in fair value of simple agreement for future equity | (16,793,000 | ) | (1,373,000 | ) | ||||
| Interest income | 141,303 | 325 | ||||||
| Total other loss | (16,651,697 | ) | (1,372,675 | ) | ||||
| Loss before income taxes | (24,022,085 | ) | (4,708,973 | ) | ||||
| Income taxes | - | - | ||||||
| Net loss | $ | (24,022,085 | ) | $ | (4,708,973 | ) | ||
| Basic and diluted net loss per common share | $ | (4.79 | ) | $ | (0.99 | ) | ||
| Weighted average number of common shares outstanding – basic and diluted | 5,014,604 | 4,771,025 | ||||||
See accompanying notes to consolidated financial statements.
2
Oklo Inc.
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Deficit
(unaudited)
Three Months Ended March 31, 2024
| Redeemable Convertible | Additional | Total | |||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | Accumulated | Stockholders’ | |||||||||||||||||||||||
| Shares | Amount | Shares | Par Value | Capital | Deficit | Deficit | |||||||||||||||||||||
| Balance at January 1, 2024 | 6,585,881 | $ | 25,030,520 | 4,836,577 | $ | 484 | $ | 2,100,903 | $ | (61,493,444 | ) | $ | (59,392,057 | ) | |||||||||||||
| Exercise of stock options | - | - | 221,977 | 22 | 439,900 | - | 439,922 | ||||||||||||||||||||
| Stock-based compensation | - | - | - | - | 667,474 | - | 667,474 | ||||||||||||||||||||
| Net loss | - | - | - | - | - | (24,022,085 | ) | (24,022,085 | ) | ||||||||||||||||||
| Balance at March 31, 2024 | 6,585,881 | $ | 25,030,520 | 5,058,554 | $ | 506 | $ | 3,208,277 | $ | (85,515,529 | ) | $ | (82,306,746 | ) | |||||||||||||
Three Months Ended March 31, 2023
| Redeemable Convertible | Additional | Total | |||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | Accumulated | Stockholders’ | |||||||||||||||||||||||
| Shares | Amount | Shares | Par Value | Capital | Deficit | Deficit | |||||||||||||||||||||
| Balance at January 1, 2023 | 6,585,881 | $ | 25,030,520 | 4,771,025 | $ | 477 | $ | 1,209,244 | $ | (29,320,787 | ) | $ | (28,111,066 | ) | |||||||||||||
| Stock-based compensation | - | - | - | - | 48,241 | - | 48,241 | ||||||||||||||||||||
| Net loss | - | - | - | - | - | (4,708,973 | ) | (4,708,973 | ) | ||||||||||||||||||
| Balance at March 31, 2023 | 6,585,881 | $ | 25,030,520 | 4,771,025 | $ | 477 | $ | 1,257,485 | $ | (34,029,760 | ) | $ | (32,771,798 | ) | |||||||||||||
See accompanying notes to consolidated financial statements.
3
Oklo Inc.
Consolidated Statements of Cash Flows
(unaudited)
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | (24,022,085 | ) | $ | (4,708,973 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 48,841 | 10,996 | ||||||
| Change in fair value of simple agreement for future equity | 16,793,000 | 1,373,000 | ||||||
| Stock-based compensation | 667,474 | 48,241 | ||||||
| Change in operating assets and liabilities: | ||||||||
| Prepaid and other current assets | (292,060 | ) | (255,208 | ) | ||||
| Other assets | 25,361 | 5,377 | ||||||
| Accounts payable | (574,395 | ) | (420,901 | ) | ||||
| Other accrued expenses | 73,242 | 690,093 | ||||||
| Operating lease liability | (6,755 | ) | (4,991 | ) | ||||
| Net cash used in operating activities | (7,287,377 | ) | (3,262,366 | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchases of property and equipment | (96,733 | ) | - | |||||
| Net cash used in investing activities | (96,733 | ) | - | |||||
| Cash flows from financing activities | ||||||||
| Proceeds from exercise of stock options | 439,922 | - | ||||||
| Proceeds from right of first refusal liability | 25,000,000 | - | ||||||
| Proceeds from simple agreement for future equity | 10,232,000 | 340,000 | ||||||
| Payment of deferred issuance costs | (136,618 | ) | - | |||||
| Net cash provided by financing activities | 35,535,304 | 340,000 | ||||||
| Net decrease in cash and cash equivalents | 28,151,194 | (2,922,366 | ) | |||||
| Cash and cash equivalents – beginning of period | 9,867,588 | 9,653,528 | ||||||
| Cash and cash equivalents – end of period | $ | 38,018,782 | $ | 6,731,162 | ||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | - | $ | - | ||||
| Cash paid for income taxes | - | - | ||||||
| Supplemental noncash investing and financing activities | ||||||||
| Deferred issuance costs included in accounts payable | $ | 799,796 | $ | 684,990 | ||||
| Deferred issuance costs included in accrued expense and other | 203,902 | - | ||||||
See accompanying notes to consolidated financial statements.
4
Oklo Inc.
Notes to Consolidated Financial Statements
March 31, 2024
(unaudited)
| 1. | Nature of Operations and Organization |
Oklo Inc. (the “Company”), formerly, UPower Technologies, Inc., was incorporated on July 3, 2013. The Company is developing advanced fission power plants called “powerhouses” to provide clean, reliable, and affordable energy at scale. The Company is pursuing two complementary tracks to address this demand: providing reliable, commercial-scale energy to customers; and selling used nuclear fuel recycling services to the U.S. market.
The Company plans to commercialize its liquid metal fast reactor technology with the Aurora powerhouse product line. The first commercial Aurora powerhouse is designed to produce up to 15 megawatts of electricity (MWe) on both recycled nuclear fuel and fresh fuel. The Company’s advanced fission technology has a history of successful operation, first demonstrated by the Experimental Breeder Reactor-II, which sold and supplied power to the grid and showed effective waste recycling capabilities for over 30 years of operation. Furthermore, the Company has achieved several significant deployment and regulatory milestones, including securing a site use permit from the U.S. Department of Energy (“DOE”) for the Idaho National Laboratory (“INL”) Site and a fuel award from INL for a commercial-scale advanced fission power plant in Idaho.
On May 9, 2024, pursuant to an Agreement and Plan of Merger and Reorganization (as amended, modified, supplemented or waived, the “Merger Agreement”), dated July 11, 2023, by and among the Company, AltC Acquisition Corp., a Delaware corporation (“AltC”) and AltC Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of AltC (“Merger Sub”), Merger Sub was merged with and into the Company, with the Company surviving the merger as a wholly owned subsidiary of AltC (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”) (as further described in Note 15). In connection with the closing of the Business Combination, AltC changed its name to Oklo Inc.
Liquidity
As of March 31, 2024, the Company’s cash and cash equivalents were $38,018,782. The Company continues to incur significant operating losses. For the three months ended March 31, 2024, the Company had a net loss of $24,022,085 and used cash in operating activities of $7,287,377. As of March 31, 2024, the Company had accumulated deficits of $85,515,529. Management expects that significant on-going operating expenditures will be necessary to successfully implement the Company’s business plan and develop of its powerhouses. These circumstances raised substantial doubt about the Company’s ability to continue as a going concern for at least the next twelve months.
Immediately following the closing of the Business Combination (the “Closing”), the Company had additional cash of approximately $263.3 million, after giving effect to the payment of transaction expenses, which will be utilized to fund the Company’s powerhouses, operations and growth plans. The Company believes that as a result of the Business Combination its existing cash and cash equivalents, as well as cash received from the Business Combination, will be sufficient to fund its operations for the next twelve months from the date the financial statements were issued as of and for the three months ended March 31, 2024.
The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
| 2. | Summary of Significant Accounting Policies |
Basis of Presentation
The accompanying financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying consolidated financial statements reflect all adjustments including normal recurring adjustments, necessary to present fairly the financial position, results of operations, and cash flows for the periods presented in accordance with U.S. GAAP. References to U.S. GAAP issued by the Financial Accounting Standards Board (the “FASB”) in these accompanying notes to the consolidated financial statements are to the FASB Accounting Standards Codification (“ASC” or the “Codification”).
5
Segments
To date, the Company has viewed its financial information on an aggregate basis for the purposes of evaluating financial performance and allocating the Company’s resources. Accordingly, the Company has determined that it operates in one segment.
Principles of Consolidation
The consolidated financial statements include the Company’s accounts and those of its wholly owned subsidiary Oklo Power LLC. All intercompany transactions and balances have been eliminated.
Use of Estimates
Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments, and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, the Company evaluates its estimates, including those related to the valuation of the operating lease liabilities and operating right-of-use assets, useful lives of property and equipment, stock-based compensation expense, valuation allowance on deferred tax assets, and fair value of simple agreement for future equity. These estimates, judgments, and assumptions are based on current and expected economic conditions, historical data, and experience available at the date of the accompanying consolidated financial statements, and various other factors that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
Risk and Uncertainties
The Company is subject to continuing risks and uncertainties in connection with the current macroeconomic environment, including as a result of inflation, increasing interest rates, instability in the global banking system, geopolitical factors, results of a global pandemic such as the COVID-19 pandemic or otherwise, including the ongoing conflicts in Ukraine and Israel. At this point, the extent to which these effects may impact the Company’s future financial condition or results of operations is uncertain, and as of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the update of any estimates or judgments or an adjustment of the carrying value of any assets or liabilities. Given the nature of the business, the ongoing conflicts in Ukraine and Israel have not had a specific impact on the Company’s financial performance. These estimates may change as new events occur and additional information is obtained and will be recognized in the financial statements as soon as they become known.
Comprehensive Loss
Comprehensive loss is defined as the change in equity of a business during a period from transactions and other events and circumstances from non-owner sources. Comprehensive loss includes net loss as well as other changes in stockholders’ deficit which includes certain changes in equity that are excluded from net loss. To date, the Company has not had any transactions that are required to be reported in comprehensive loss other than the net loss incurred from operations.
Net Loss Per Common Share
Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration for potential dilutive securities. Diluted net loss per common share is computed by dividing net loss by the weighted-average number of common shares and common share equivalents of potentially dilutive securities outstanding for the period. Potentially dilutive securities include redeemable convertible preferred stock and stock options. Since the Company was in a loss position for the periods presented, basic net loss per common share is the same as diluted net loss per common share since the effects of potentially dilutive securities are antidilutive.
Cash and Cash Equivalents
Cash and cash equivalents include cash and highly liquid investments with an original contractual maturity at the date of purchase of three months or less. The maximum amount placed in any one financial institution is currently limited in order to reduce risk via the use of Insured Cash Sweep accounts such that all funds are insured by the Federal Deposit Insurance Corporation (FDIC). The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk regarding its cash and cash equivalents. As of March 31, 2024 and December 31, 2023, cash and cash equivalents were $38,018,782 and $9,867,588, respectively.
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Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation and amortization. Expenditures for repairs and maintenance that do not improve or extend the life of the assets are expensed as incurred. When property and equipment are sold or otherwise disposed of, the related cost and accumulated depreciation and amortization are removed from the respective accounts, and any resulting gains or losses are included on the consolidated statement of operations.
Depreciation expense is computed using the straight-line method generally based on the following estimated useful lives of the related assets:
| Furniture and fixtures | 7 years |
| Computers | 3 to 7 years |
| Software | 3 years |
| Leasehold improvements | Shorter of lease term or estimated useful life of the asset |
Impairment of Long-Lived Assets
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When such events or changes in circumstances occur, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through their undiscounted expected future cash flow. If the future undiscounted cash flow is less than the carrying amount of these assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. No impairment losses were recognized on any long-lived assets during the three months ended March 31, 2024 and 2023.
Leases
The Company has lease arrangements for its offices. The Company determines if an arrangement is a lease at inception by evaluating whether the arrangement conveys the right-of-use (“ROU”) to an identified asset and whether the Company obtains substantially all of the economic benefits from and has the ability to direct the use of the asset. Leases are recorded as an operating lease right-of-use assets and operating lease liability on the consolidated balance sheets. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets.
Lease ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the expected lease term, including options to extend the lease when it is reasonably certain that the Company will exercise that option. The Company uses the discount rate implicit in the lease unless that rate cannot be readily determined. In that case, the Company uses its incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis an amount equal to the lease payments over the expected lease term. Lease ROU assets consist of the initial measurement of lease liabilities, any lease payments made to lessor on or before the lease commencement date, adjusted for any lease incentives received, and any initial direct costs incurred by the Company.
Operating lease expense for lease payments is recognized on a straight-line basis over the expected lease term. There were no finance lease obligations.
Fair Value Measurements
The authoritative guidance with respect to fair value established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels and requires that assets and liabilities carried at fair value be classified and disclosed in one of three categories, as presented below. There are no transfers in and out of Levels 1 and 2, and activity in Level 3 fair value measurements.
Financial instruments measured at fair value on a recurring basis were based upon a three-tier hierarchy as follows:
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
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Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly as corroborated by market data.
Level 3: Unobservable inputs in which little or no market data exists, therefore developed using management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.
The Company determines the level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriate levels, the Company performs an analysis of the assets and liabilities at each reporting period end.
The Company’s cash and cash equivalents, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate their fair value due to the short-term nature of these assets and liabilities. The Company’s SAFE Notes (as further described in Note 5) were carried at fair value and classified as Level 3 liabilities.
Redeemable Convertible Preferred Stock
The Company has issued redeemable convertible preferred stock that includes certain redemption rights upon an event that is outside the control of the Company. Accordingly, the redeemable convertible preferred stock is presented as mezzanine equity, outside of stockholders’ deficit at their issuance date fair value, net of any issuance costs. The Company assesses whether the redeemable convertible preferred stock has become redeemable or the probability that the redeemable preferred stock will become redeemable in determining whether to record subsequent measurement adjustments.
Research and Development
Research and development represent costs incurred to develop the Company’s technology. These costs consist of personnel costs, including salaries, employee benefit costs, bonuses and stock-based compensation expenses, software costs, computing costs, hardware and experimental supplies, and expenses for outside engineering contractors for analytical work and consulting costs. The Company expenses all research and development costs in the periods in which they are incurred.
General and Administrative
General and administrative expenses consist primarily of payroll and other personnel-related costs, including stock-based compensation expense, for the Company’s employees involved in general corporate functions including finance and human resources, rent and other occupancy expenses, professional fees for legal and accounting, travel costs, promotional expenses, as well as depreciation and amortization expense for capitalized assets associated with these functions.
Cost-Share Projects
The Company has certain cost-share reimbursable projects for several research and development (“R&D”) projects related to nuclear recycling technologies awarded by the DOE’s Advanced Research Projects Agency (“ARPA”) (the “cost-share projects”) where the Company elected to record the reimbursements on a net presentation basis in the consolidated financial statements. During the three months ended March 31, 2024 and 2023, the Company offset certain R&D expenses related to the cost-share projects totaling $143,768 and $19,173, respectively, based on the period in which the expense was incurred and reimbursable under the guidelines of the cost-share project on the consolidated statements of operations and comprehensive loss. In addition, the Company purchased $36,238 of property and equipment under the guidelines of the cost-share projects during the three months ended March 31, 2024 and reflected $36,238 of the cost-share reimbursement as an offset to the cost basis of the property and equipment, resulting in no carrying value for the property and equipment on the consolidated balance sheets and no reported cash flows. In the event the property and equipment is sold upon completion of the cost-share projects, the Company may be obligated to reimburse the DOE in the event the proceeds are in excess of $5,000 per asset, which at such time, if applicable, will be reported on a net presentation basis with no gain recognized and no cash flows.
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Stock-Based Compensation
The Company accounts for stock-based compensation by measuring and recognizing expense for all stock-based payments made to employees and non-employees based on the estimated grant-date fair values for all stock-based compensation arrangements. The Company recognizes compensation over each recipient’s requisite service period, which is generally the vesting period. The Company has elected to recognize actual forfeitures by reducing the stock-based compensation in the same period as the forfeitures occur. The Company estimates the fair value of stock options granted to employees and non-employees using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires the input of subjective assumptions, including the Company's common stock fair value, expected volatility, expected dividend yield, risk-free rate of return, and the expected term. The Company classifies stock-based compensation expense in the same manner in which the award recipient’s cash compensation cost is classified on the consolidated statements of operations and comprehensive loss.
Income Taxes
Because the Company has not generated revenue and is anticipated to remain as such for the next several years, income taxes have been minimal to date. The Company follows the asset and liability method of accounting for income taxes under ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2024 and 2023. The Company is currently not aware of any issues under review that could result in significant payments, accruals, or material deviation from its position.
Recent Accounting Pronouncements
In March 2024, the FASB issued Accounting Standards Update (“ASU”) ASU 2024-02, Codification Improvements - Amendments to Remove Reference to Concept Statements, which amends the Codification to remove references to various concepts statements and impacts a variety of topics in the Codification. ASU 2024-02 applies to all reporting entities within the scope of the affected accounting guidance, but in most instances the references removed are extraneous and not required to understand or apply the guidance. Generally, the amendments in ASU 2024-02 are not intended to result in significant accounting changes for most entities. ASU 2024-02 is effective January 1, 2025 and is not expected to have a significant impact on the Company's consolidated financial statements.
| 3. | Balance Sheet Components |
Prepaid and Other Current Assets
Prepaid and other current assets are summarized as follows:
| As of | ||||||||
March 31, 2024 (unaudited) | December 31, 2023 | |||||||
| Prepaid expenses | $ | 565,775 | $ | 369,881 | ||||
| Deferred issuance costs | 4,849,859 | 3,709,542 | ||||||
| Cost-share receivables | 196,846 | 126,042 | ||||||
| Refundable deposit | 125,000 | 125,000 | ||||||
| Other | 25,361 | - | ||||||
| Total prepaid and other current assets | $ | 5,762,841 | $ | 4,330,465 | ||||
Prepaid expenses include prepaid consulting fees, insurance premiums, rent and other charges. The deferred issuance costs are specific incremental costs of the public company business combination. Cost-share receivables refer to the monetary assets obtained by the Company through several R&D cost-share projects related to nuclear recycling technologies awarded by the DOE’s ARPA. Refundable deposit represents an advance payment for the grant of a right to purchase certain land, subject to certain conditions, located at the DOE facility in Pike County, Ohio.
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Prepaid expenses are amortized over the straight-line method over the contract term. The deferred issuance costs will be charged against the proceeds of the public company business combination unless it is aborted requiring them to be expensed. Cost-share receivables are recorded as eligible costs are incurred. The refundable deposit will either be applied to the final purchase price of the land or refunded no later than December 31, 2024.
Property and Equipment, Net
Property and equipment are summarized as follows:
| As of | ||||||||
March 31, 2024 (unaudited) | December 31, 2023 | |||||||
| Computers | $ | 281,126 | $ | 196,882 | ||||
| Furniture and fixtures | 64,912 | 64,912 | ||||||
| Software | 404,954 | 392,465 | ||||||
| Leasehold improvements | 30,762 | 30,762 | ||||||
| Total property and equipment, gross | 781,754 | 685,021 | ||||||
| Less accumulated depreciation and amortization | (156,191 | ) | (107,350 | ) | ||||
| Total property and equipment, net | $ | 625,563 | $ | 577,671 | ||||
Depreciation and amortization expense for the three months ended March 31, 2024 and 2023 totaled $48,841 and $10,996, respectively.
Accrued Expenses and Other
Accrued expenses and other are summarized as follows:
| As of | ||||||||
March 31, 2024 (unaudited) | December 31, 2023 | |||||||
| Accrued expenses | $ | 719,365 | $ | 482,984 | ||||
| Accrued payroll and bonus | 318,490 | 196,900 | ||||||
| Credit card liabilities | 74,580 | 155,407 | ||||||
| Other | 250 | 250 | ||||||
| Total accrued expenses and other | $ | 1,112,685 | $ | 835,541 | ||||
| 4. | Leases |
On September 10, 2021, the Company entered into a commercial real estate sub-lease agreement for 7,350 square feet of office space in Santa Clara, California, with an initial term of 2.75 years.
The table below presents supplemental information related to operating leases:
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Operating lease costs during the period | $ | 90,347 | $ | 80,366 | ||||
| Cash payments included in the measurement of operating lease liabilities during the period | $ | 57,330 | $ | 55,566 | ||||
| Weighted-average remaining lease term (in years) as of period-end | 0.17 | 1.17 | ||||||
| Weighted-average discount rate during the period | 6.85 | % | 6.85 | % | ||||
The Company generally utilizes its incremental borrowing rate based on information available at the commencement of the lease in determining the present value of future payments since the implicit rate for the Company’s leases is not readily determinable.
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Variable lease expense includes rental increases that are not fixed, such as those based on amounts paid to the lessor based on cost or consumption, such as maintenance and utilities.
The components of operating lease costs were as follows:
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Research and development | $ | 66,857 | $ | 52,416 | ||||
| General and administrative | 23,490 | 27,950 | ||||||
| Total operating lease costs (1) | $ | 90,347 | $ | 80,366 | ||||
| (1) | Month-to-month lease arrangements for the three months ended March 31, 2024 and 2023 of $39,772 and $38,064, respectively, are included in operating lease costs. |
The minimum lease payments above do not include common area maintenance charges, which are contractual obligations under the Company’s lease, but are not fixed and can fluctuate from year to year and are expensed as incurred. Common area maintenance charges for the three months ended March 31, 2024 and 2023 of $20,490 and $19,454, respectively, are included in operating expenses on the consolidated statements of operations and comprehensive loss.
Maturities of the operating lease liability as of March 31, 2024 are summarized as follows:
| Year Ending December 31, | ||||
| 2024 (remaining months of the year) | $ | 38,220 | ||
| Minimum lease payments | 38,220 | |||
| Less imputed interest | (325 | ) | ||
| Present value of operating lease liability, representing current portion of operating lease liability | $ | 37,895 | ||
| Current portion of operating lease liability | $ | 37,895 | ||
| 5. | Simple Agreement for Future Equity |
The Company issued simple agreements for future equity (“SAFEs”) to investors (the “SAFE Notes”). The SAFE Notes allow investors to purchase equity at a negotiated price now with the investor receiving equity in the future with no set time for conversion. The SAFE Notes will convert on an equity financing, as further described below, if such equity financing is consummated. The SAFE Notes generally focus on equity rounds, however, there are terms included for a liquidity event (as further described below) or dissolution event, which allow for conversion into equity or cash at the option of the holder under certain circumstances. The Company determined that the SAFE Notes are not legal form of an outstanding share or legal form debt (i.e., no creditors’ rights), therefore, the Company evaluated the SAFE Notes to determine whether they must be classified as a liability under ASC 480, Distinguishing Liabilities from Equity.
During the three months ended March 31, 2024 and 2023, the Company issued SAFE Notes in exchange for aggregate proceeds of $10,232,000 and $0, respectively. For the three months ended March 31, 2024, the Company received cash proceeds of $10,232,000 from the issuance of SAFE Notes during the period. For the three months ended March 31, 2023, the Company received cash proceeds of $340,000 from the subscription of a SAFE.
Upon a future equity financing involving preferred shares, SAFE Notes settle into a number of preferred shares equal to the greater of (i) the number of shares of standard preferred stock equal to the amount invested under the SAFE Note divided by the lowest price per share of the standard preferred stock, or (ii) the invested amount of the SAFE Note divided by a discounted price to the price investors pay to purchase the standard preferred shares in the financing (with such discounted price calculated by reference to a valuation cap). Alternatively, upon the occurrence of a change of control, a direct listing or an initial public offering (described as a “liquidity event”) (other than a qualified financing), the investors shall have the option to receive either (i) cash payment equal to the invested amount under such SAFE Note, or (ii) a number of shares of common stock equal to the invested amount divided by the liquidity price set forth in the applicable SAFE Note. Given the SAFE Notes include a provision allowing for the investors to receive a portion of the proceeds upon a change of control equal to the greater of their investment amount or the amount payable based upon a number of shares of common stock equal to the investment amount divided by the liquidity price, the occurrence of which is outside the control of the Company, this provision requires the SAFE Notes to be classified as a liability pursuant to ASC 480 because a change in control is an event that is considered not under the sole control of the Company (see Note 7).
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If a dissolution event occurs prior to the termination of the SAFE Notes, the investor will be entitled to receive a portion of the related proceeds equal to the purchase amount (or the amount received for the SAFE Note). In connection with the Business Combination, the Company and the SAFE investors amended the SAFE Notes to convert in connection with the closing of the Business Combination with AltC.
The outstanding principal balance as of March 31, 2024 and December 31, 2023, for the SAFE Notes were $42,557,000 and $32,325,000, respectively. As of March 31, 2024, $13,994,800 and $28,562,200 have a valuation cap of $300,000,000 and $500,000,000, respectively. As of December 31, 2023, $12,130,000 and $20,195,000 have a valuation cap of $300,000,000 and $500,000,000, respectively. No SAFE Notes converted into shares of the Company’s preferred stock during the three months ended March 31, 2024 and 2023.
| 6. | Right of First Refusal Liability |
On February 16, 2024, the Company entered into a letter of intent (the “LOI”) with an unrelated third party (the “third party”) for the purchase of power from the Company’s planned powerhouses to serve certain data centers in the U.S. on a 20-year timeline, and at a rate to be formally specified in one or more future Power Purchase Agreement(s) (each a “PPA”) (subject to the requirement that the price meets the market rate, discount and most favored nation terms contained in the agreement). In addition, the third party will have the right to renew and extend PPAs for additional 20-year terms.
The LOI, provides for the third party to have a continuing right of first refusal for a period of thirty-six (36) months following its execution to purchase energy output produced by certain powerhouses developed by the Company in the U.S., subject to certain provisions and excluded powerhouses, for power capacity of no less than 100 MWe of energy output and up to cumulative maximum of 500 MWe of total energy output (the “ROFR”). In exchange for the ROFR and other rights contained in the LOI, in March 2024, the third party paid the Company $25,000,000 (the “Payment”). In connection with the Payment, the Company agreed to supply power at a discount to the most favored nation pricing to the third party in a future PPA (location to be determined); provided that pricing set out in a PPA will include an additional discount if needed such that the total savings against most favored nation pricing over the course of the PPA is equivalent to the Payment. The third party can assign its rights under the LOI, in whole or in part, at any time. As of March 31, 2024, the outstanding balance under the right of first refusal liability was $25,000,000, as reflected on the consolidated balance sheets.
| 7. | Fair Value Measurements |
The Company’s SAFE Notes are recorded at fair value on the consolidated balance sheets. The fair value of the Company’s SAFE Notes is based on significant inputs not observable in the market which cause the instrument to be classified as a Level 3 measurement with the fair value hierarchy. The valuation uses probabilities considering pay-offs under various scenarios as follows: (i) an equity financing where the SAFE Notes will convert into certain preferred stock; (ii) a liquidity event (change of control, and initial public offering) where the SAFE noteholders will have an option to receive either a cash payment equal to the invested amount under such SAFE Note, or a number of shares of common stock equal to the invested amount divided by the liquidity price; and (iii) dissolution event where the SAFE noteholders will be entitled to receive a portion of the related proceeds equal to the purchase amount. The Company determined the fair value of the SAFE Notes under the Monte Carlo simulation method which was used to estimate the future market value of invested capital (“MVIC”) of the Company at a liquidity event and the expected payment to the SAFE holders at each simulated MVIC value. The Company believes these assumptions would be made by a market participant in estimating the valuation of the SAFE Notes. The Company assesses these assumptions and estimates on an on-going basis as additional data impacting the assumptions and estimates are obtained. Changes in the fair value of the SAFE Notes are recognized on the consolidated statements of operations and comprehensive loss.
The key assumptions used in the Monte Carlo simulation are presented in the table below:
| As of March 31, | ||||||||
| 2024 | 2023 | |||||||
| Asset volatility (1) | 84.4 | % | 90.8 | % | ||||
| Risk-free rate (2) | 4.2 | % | 3.6 | % | ||||
| Expected term (3) | 60 Months | 60 months | ||||||
| (1) | Asset volatility measures the uncertainty about the realization of expected future returns that was estimated based on the methodologies assuming default risk based on the implied and historical volatility of the share price of peer companies. |
| (2) | Risk-free rate based on the U.S. Treasury yield in effect at the time of SAFE Notes consistent with the expected term. |
| (3) | The simulation considers total 5-year term. If there are no events occurring within 5-years then the SAFE noteholders are expected to receive their principal amount. |
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The following table presents a reconciliation of the liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Beginning balance | $ | 46,042,000 | $ | 13,340,000 | ||||
| SAFE Notes issued during the period | 10,232,000 | - | ||||||
| Change in fair value during the period | 16,793,000 | 1,373,000 | ||||||
| Ending balance | $ | 73,067,000 | $ | 14,713,000 | ||||
As of March 31, 2024 and December 31, 2023, the estimated fair value of the SAFE Notes totaled $73,067,000 and $46,042,000, respectively. The change in fair value during the period, as reflected in the above table, is included in other income (loss) on the consolidated statements of operations and comprehensive loss.
| 8. | Redeemable Convertible Preferred Stock |
The Company’s Amended and Restated Certificate of Incorporation dated November 5, 2018, as amended on March 24, 2020, pursuant to the Certificate of Amendment, both filed with the Secretary of the State of Delaware, authorized the issuance of 7,000,000 shares of preferred stock, par value of $0.0001 per share.
| Preferred Stock Series | Shares Issued Outstanding | Original Issue Price Per Share | Carrying Value (1) | Liquidation Amount | ||||||||||||
| Series A-1 | 4,526,703 | $ | 4.6557 | $ | 20,983,596 | $ | 21,074,971 | |||||||||
| Series A-2 | 55,135 | 3.6274 | 192,134 | 199,997 | ||||||||||||
| Series A-3 | 2,004,043 | 1.9236 | 3,854,790 | 3,854,977 | ||||||||||||
| Totals | 6,585,881 | $ | 25,030,520 | $ | 25,129,945 | |||||||||||
| (1) | Amounts are net of issuance costs $86,667 for Series A-1, $12,758 for Series A-2 and $0 for Series A-3. |
The terms and conditions of the Series A-1 Preferred Stock, Series A-2 Preferred Stock, and Series A-3 Preferred Stock (collectively, the “Preferred Stock”) are as follows:
Conversion
At the option of the holder, shares of Preferred Stock are convertible into the number of shares of common stock that is determined by dividing the original issue price per share of Preferred Stock by the conversion price per share (at issuance the conversion price was the same as the original issue price) applicable to each share of Preferred Stock in effect at the date of conversion. The conversion price is subject in each case to certain adjustments to reflect the issuance of common stock, options, warrants, or other rights to subscribe for or to purchase shares of the Company’s common stock for a consideration per share less than the conversion price then in effect. Each share of Preferred Stock will mandatorily convert into shares of common stock at the then-effective conversion rate upon the earlier of (a) the closing of a firm commitment underwritten public offering of common stock at a price of at least $13.9671 per share resulting in gross proceeds to the Company of at least $50 million and a post-money fully diluted valuation of $250 million following with the common stock is listed for trading on the Nasdaq Stock Market's National Market, the New York Stock Exchange or another exchange or marketplace approved the Board of Directors (the “Board”) or (b) the date and time, or the occurrence of an event, specified by vote or written consent of holders of at least 60% of the Preferred Stock.
Redemption
The Preferred Stock is not redeemable at the option of the holder. However, the shares of the Preferred Stock are redeemable upon the occurrence of certain Deemed Liquidation Events, as described below, outside the Company’s control following the election of the holders of Preferred Stock. Mergers or consolidations involving the Company, or liquidations of it, subject to certain provisions, are considered Deemed Liquidation Events unless holders of at least 60% of outstanding Preferred Stock elect otherwise by written notice sent to the Company at least five days prior to the effective date of any such event. To date, no such Deemed Liquidation Events have occurred.
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Liquidation Amount
In the event of a liquidation, dissolution or winding-up of the Company, prior to any distribution to holders of common stock, holders of Preferred Stock are entitled to payment of an amount per share equal to the greater of (a) the original issue price, plus any dividends declared but unpaid thereon or (b) the amount that would be due if all shares of Preferred Stock had been converted to common stock immediately prior to the liquidation, dissolution or winding-up (the “Liquidation Amount”). If upon any such liquidation, dissolution or winding up of the Company, the assets of the Company available for distribution to its stockholders shall be insufficient to pay the holders of shares of Preferred Stock the full amount of the Liquidation Amount to which they shall be entitled, the holders of shares of Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.
After payment in full of the Liquidation Amount, the holders of Common Stock are entitled to receive the remaining assets of the Company available for distribution to its stockholders’ pro rata based on the number of shares of common stock held by each holder.
Dividends
Dividends of $0.3725 per share of Series A-1 Preferred Stock, $0.2902 per share of Series A-2 Preferred Stock, and $0.1539 per share of Series A-3 Preferred Stock are payable only when, as, and if, declared by the Board of the Company. The Company is under no obligation to declare such dividends.
Voting Rights
The holders of the Preferred Stock are entitled to the number of votes equal to the number of shares of common stock into which the shares of the Preferred Stock held by each holder are then convertible. The holders of Preferred Stock are entitled to vote together with the holders of the Company’s common stock, as a single class, on all matters submitted to a vote of stockholders. The holders of Preferred Stock are entitled to elect two (2) directors, exclusively and as a separate class, out of five (5) directors.
| 9. | Common Stock |
The Company’s Amended and Restated Certificate of Incorporation dated November 5, 2018, as amended on March 24, 2020, pursuant to the Certificate of Amendment, both filed with the Secretary of the State of Delaware, authorized the issuance of 14,000,000 shares of common stock, par value of $0.0001 per share. The holders of common stock are entitled to elect three (3) directors, exclusively and as a separate class, out of five (5) directors.
The Company reserved shares of its common stock for the potential future issuances of 6,585,881 Preferred Stock and for potential future issuances of stock option awards outstanding and available for future grants (see Note 10).
During the three months ended March 31, 2024, the Company issued 221,977 shares of its common stock upon the exercise of stock options with an exercise price of $439,922.
| 10. | Stock-Based Compensation |
In 2016, the Board and the stockholders of the Company approved the 2016 Stock Incentive Plan of Oklo Inc. (the “Plan”). The Plan provides for the issuance of common stock options, appreciation rights, restricted stock units and other stock-based awards to employees, officers, directors, and consultants. Since the Plan’s inception, only stock options have been awarded under it. Options with a time-based vesting schedule vest at the rate of 20% per year over a period of 5 years, beginning one year following the related grant date, and expire ten years from the date of the grant. Options with milestone-based vesting vest upon completion of milestones specific to each grant. The Plan initially had 1,000,000 shares reserved for issuance under the Plan at its inception. In December 2021, the Company’s Board increased the number of shares of common stock reserved for issuance under the Plan to 1,938,894. In December 2023, the Company’s Board increased the number of shares of common stock reserved for issuance under the Plan to 2,539,514.
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Compensation expense for the three months ended March 31, 2024 and 2023 includes the portion of awards vested in the periods for all stock-based awards granted, based on the grant date fair value estimated using a Black-Scholes option valuation model, consistent with authoritative guidance utilizing the following assumptions:
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Expected volatility | 79.67 | % | - | |||||
| Expected dividend yield | 0.00 | % | - | |||||
| Risk-free interest rate | 4.08 | % | - | |||||
| Expected term | 6.3 years | - | ||||||
Expected Volatility – The Company determines volatility based on the historical volatilities of comparable publicly traded companies over a period equal to the expected term because it has no trading history for its common stock price. The comparable companies were chosen based on the similar size, stage in the life cycle, or area of specialty. The Company will continue to apply this process until a sufficient amount of historical information regarding volatility on its own stock becomes available.
Expected Dividend Yield – The Company has not, and does not, intend to pay dividends.
Risk-free Interest Rate – The Company applies the risk-free interest rate based on the U.S. Treasury yield in effect at the time of the grant consistent with the expected term of the award.
Expected Term – The Company calculated the expected term using the simplified method. This method uses the average of the contractual term of the option and the weighted-average vesting period in accordance with authoritative guidance.
Fair Value of Common Stock – The grant date fair market value of the shares of common stock underlying stock options has historically been determined by the Company’s Board. Because there has been no public market for the Company’s common stock, the Board exercises reasonable judgment and considers a number of objective and subjective factors to determine the best estimate of the fair market value, which include contemporaneous valuations performed by an independent third-party, important developments in the Company’s operations, sales of redeemable convertible preferred stock, the rights, preferences and privileges of the Company’s redeemable convertible preferred stock relative to those of its common stock, lack of marketability of its common stock, actual operating results, financial performance, the likelihood of achieving a liquidity event for the Company’s security holders, the trends, the economy in general, the stock price performance and volatility of comparable public companies.
A summary of the stock option award activity during the three months ended March 31, 2024 is as follows:
| Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (in years) | ||||||||||
| Stock option awards outstanding at January 1, 2024 | 1,884,965 | $ | 9.62 | 8.47 | ||||||||
| Exercised | (221,977 | ) | 1.98 | |||||||||
| Granted | 58,020 | 26.47 | ||||||||||
| Stock option awards outstanding at March 31, 2024 | 1,721,008 | 11.17 | 8.54 | |||||||||
| Stock option awards exercisable at March 31, 2024 | 358,695 | 2.46 | 6.64 | |||||||||
| Stock option awards not vested at March 31, 2024 | 1,362,313 | |||||||||||
| Stock option awards available for future grants at March 31, 2024 | 12,557 | |||||||||||
The aggregate grant date fair value of stock options granted during the three months ended March 31, 2024 and 2023 was $1,109,656 and $0 respectively. The weighted-average grant-date fair value of stock options granted during the three months ended March 31, 2024 and 2023 was $19.13 and $0 per share, respectively.
The total fair value of stock options vested during the three months ended March 31, 2024 and 2023 was $191,907 and $55,693, respectively.
The intrinsic value for stock options exercised represents the difference between the estimate of fair value based on the valuation of the shares of common stock as of the reporting date and the exercise price of the stock option. During the three months ended March 31, 2024 and 2023, the intrinsic value of the Company’s stock option exercises was $4,204,255 and $0, respectively.
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The exercise prices of the stock option awards outstanding and exercisable are summarized as follows as of March 31, 2024:
| Exercise | Outstanding Awards | Vested Awards |
||||||||
| Price | (Shares) | (Shares) | ||||||||
| $ | 0.44 | 4,729 | 4,729 | |||||||
| $ | 1.75 | 445,759 | 273,643 | |||||||
| $ | 2.48 | 212,480 | 16,255 | |||||||
| $ | 2.87 | 176,880 | 53,958 | |||||||
| $ | 19.28 | 823,140 | 8,360 | |||||||
| $ | 26.47 | 58,020 | 1,750 | |||||||
| 1,721,008 | 358,695 | |||||||||
Stock-based compensation expense charged to operations is summarized as follows:
| Three Month Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Research and development | $ | 394,748 | $ | 33,315 | ||||
| General and administration | 272,726 | 14,926 | ||||||
| Total costs charged to operations | $ | 667,474 | $ | 48,241 | ||||
As of March 31, 2024, there was approximately $11,742,000 of total unrecognized compensation expense related to outstanding unvested share-based compensation arrangements granted under the Plan. The cost is expected to be recognized over a weighted-average period of 4.46 years.
| 11. | Income Taxes |
The provision for income taxes in interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of its annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The quarterly provision for income taxes, and estimate of the Company’s annual effective tax rate, are subject to variation due to several factors, including variability in pre-tax income (or loss), the mix of jurisdictions to which such income relates, changes in how the Company conducts business, and tax law developments.
The income tax provision effective tax rate for the three months ended March 31, 2024 and 2023 was 0.0%.
The realization of deferred tax assets is dependent upon a variety of factors, including the generation of future taxable income, the reversal of deferred tax liabilities, and tax planning strategies. Based upon the Company’s historical operating losses and the uncertainty of future taxable income, the Company has provided a valuation allowance against most of the deferred tax assets as of March 31, 2024 and 2023.
As of March 31, 2024 and 2023, the Company has no uncertain tax positions or interest and penalties accrued.
| 12. | Pension Plan |
The Company has a qualified 401(k) defined contribution plan that allows eligible employees of the Company to participate in the plan, subject to limitations. The plan allows for discretionary matching contributions by the Company, up to 4% of eligible annual compensation made by participants of the plan. The Company contributions to the plan were $96,549 and $81,271 for the three months ended March 31, 2024 and 2023, respectively.
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| 13. | Commitments and Contingencies |
Contract commitments
The Company enters into contracts in the normal course of business with third-party contract research organizations, contract development and manufacturing organizations and other service providers and vendors. These contracts generally provide for termination on notice and, therefore, are cancellable contracts and not considered contractual obligations and commitments.
Contingencies
From time to time, the Company may become involved in litigation matters arising in the ordinary course of business. The Company is not a party to any legal proceedings, nor is it aware of any material pending or threatened litigation. There were no contingent liabilities as of March 31, 2024.
| 14. | Related Party Transactions |
The Company entered into a demand note on January 30, 2017 with the Chief Operating Officer, bearing interest at the rate of 0.66% based on Applicable Federal Rate as published by the Internal Revenue Service for January 2017. During the three months ended March 31, 2023, the Company received interest income of $13. The note was repaid in full on April 18, 2023.
| 15. | Subsequent Events |
The Company has evaluated subsequent events through the date these financial statements were available to be issued, and determined that except for the transactions described below, there have been no events that occurred that would require adjustments to the Company’s disclosures.
Business Combination
On May 9, 2024, in connection with the Business Combination, the Company’s equityholders, including the Company’s stockholders and holders of SAFE Notes (following the Closing, “Oklo equityholders”), received 78,996,459 shares of newly issued Class A common stock, par value $0.0001 per share (following the Closing, “Oklo Class A common stock”), as well as the contingent right to receive up to an aggregate of 15,000,000 shares of Oklo Class A common stock, which will be issued to eligible holders of pre-Closing securities of the Company during the five-year period following the Closing, in three separate tranches (i) upon the satisfaction of certain price targets or (ii) if the Company undergoes a change in control (a “Change in Control” as defined in the Merger Agreement), the price per share received by stockholders of the Company in such Change in Control transaction, among other certain conditions and other provisions. In addition, certain AltC founders received 12,500,000 shares of Oklo Class A common stock subject to vesting during the five-year period following the Closing in four separate tranches upon the satisfaction of certain price targets or in the event of a sale of the Company, among other conditions.
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Exhibit 99.2
OKLO MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the financial condition and results of operations of Oklo Inc. (“Legacy Oklo”) should be read together with our audited financial statements, unaudited consolidated financial statements and related notes included elsewhere on this Current Report on Form 8-K. The discussion and analysis should also be read together with our pro forma financial information as of and for the three months ended March 31, 2024. See “Unaudited Pro Forma Condensed Combined Financial Statements” included as Exhibit 99.3 to this Current Report on Form 8-K. In addition to historical information, the following discussion contains forward-looking statements. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause future results to differ materially from those projected in the forward-looking statements include, but are not limited to, those discussed in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in this Current Report on Form 8-K. References in this section to “Oklo,” “we,” “our,” “us” and the “Company” generally refer to Legacy Oklo and its consolidated subsidiary prior to the Business Combination (as defined herein).
Overview
We were founded in 2013 with the goal of revolutionizing the energy landscape by developing clean, reliable, affordable energy solutions at scale. Global demand for reliable, clean energy is growing rapidly, with 63% of Fortune Global companies publicly committing to emissions reductions by 2050 and an expected $2 trillion annual spend on new clean power generation globally by 2030. We are pursuing two complementary tracks to address this demand: providing reliable, commercial-scale energy to customers and selling used nuclear fuel recycling services to the U.S. market.
We are developing next-generation fast fission power plants called “powerhouses.” In our differentiated build, own, and operate business model, we plan to sell power in the forms of electricity and heat directly to customers, which we believe can allow for fast-tracked customer adoption. In addition, we are a leader in the nuclear industry in the development of fuel recycling, which can unlock the energy content of used fuel; we also believe this business unit can complement our market position by vertically integrating and securing our fuel supply chain.
The fast fission technology we are working to commercialize was demonstrated by the Experimental Breeder Reactor-II (“EBR-II”), a fast fission plant that was operated by the U.S. government for 30 years. Our powerhouse product line, called the “Aurora,” builds on this legacy of proven and demonstrated technology. Our Aurora powerhouse product line is designed to be inherently safe, to be able to run on fresh or recycled fuel, and to produce 15-50 megawatts electric (“MWe”). Because the Aurora powerhouses are designed to operate by harnessing the power of high-energy, or “fast,” neutrons, they will be able to tap into the vast energy reserves remaining in existing used nuclear fuel from conventional nuclear power plants, which is currently considered nuclear waste. We estimate there is enough energy in the form of nuclear waste globally to meet the projected U.S. demand for electricity for 100 years with fast fission power plants.
We have achieved several significant deployment and regulatory milestones, including securing a site use permit from the U.S. Department of Energy (“DOE”) for the Idaho National Laboratory (“INL”) site and a fuel award from INL for a commercial-scale Aurora powerhouse in Idaho. We have announced plans fortwo additional Aurora powerhouses in southern Ohio and have been tentatively selected to provide power and heat to Eielson Air Force Base. Furthermore, we have a robust pipeline of potential customer engagements across a number of industries, having signed non-binding letters of intent that we believe could result in the deployment of Aurora powerhouses totaling over 700 MWe in capacity. The early market interest in our solutions exemplifies the potential demand for our size range of powerhouses and differentiated business model. Our first powerhouse is targeted for deployment in 2027.
Our Business Model
Our primary product will be the energy produced from our Aurora powerhouses once operational. Our planned business model is to sell the energy to customers via power purchase agreements (“PPAs”), as opposed to selling our powerhouse designs. This business model allows for recurring revenue, the opportunity to capture profitability upon improved operational efficiency, and enables novel project financing structures. This business model sets us apart from the traditional nuclear power industry, other companies in the advanced fission industry, and other larger scale energy types such as natural gas. Selling power via PPAs is a common practice within the renewable energy sector and indicates that this business model could be feasible for power plants within the size range targeted by our Aurora product line (i.e., starting with 15 MWe and ranging upward to anticipated sizes of 50 MWe).
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The traditional nuclear power industry comprises developers of large (ranging from approximately 600MWe to over 1,000 MWe) light water reactors who sell or license their reactor designs to large utilities who then construct and operate the nuclear power plant. The developer’s focus on regulatory approval of the design may lock in certain lifecycle regulatory costs that are realized by the owner-operator during construction and operations. As a result, lifecycle cost implications are generally not addressed cohesively between the developer and the owner-operator, and the regulatory strategy does not holistically implement the lifecycle benefits of the technology’s inherent safety characteristics. To date, the advanced fission industry is largely following the historical blueprint of developers seeking design certifications or approvals, and utilities bearing the future burden of licensing. While there are a number of advanced reactor designers developing smaller sized reactors than those traditionally used in the nuclear power industry, most of these developers are generally pursuing regulatory approval of groupings of these smaller reactors as part of singular larger plants, sizes of 200 MWe and up to 1,000 MWe.
In contrast, we plan to be the designer, builder, owner, and operator of our powerhouses and plan to focus on small-scale powerhouses (15 MWe to 50 MWe). As a result, we have an incentive to relentlessly focus on the full lifecycle of a safe, well-maintained, cost-effective powerhouse and holistically implement the benefits of an inherently safe, simple design. We expect this approach to enable us to reduce and manage lifecycle regulatory and operating costs in an integrated fashion, as opposed to the historical model used in the nuclear power industry that divides the incentives and responsibilities between the developer and the utility.
Selling electricity under PPAs follows an established revenue model in global power markets. While this model is more typically used for renewable energy solutions, we believe it is a compelling model for us because of the relatively small size and the lower expected capital costs of our powerhouses, when compared with other nuclear power plants. In addition, our model is designed to generate recurring revenue in a way that the traditional licensing model does not. For example, in the traditional technology licensing model, after the sale of the design, recurring revenue is dependent upon the sale of service contracts, including fuel services, which may result in prices being undercut by intermediaries. We expect our powerhouses to be profitable from the first year of operation due to our anticipated favorable unit economics. We also believe this approach will drive unit growth and allow us to ultimately launch higher output versions of our powerhouses.
We believe that our potential customers want to buy power, rather than own or operate power plants, and will prefer affordable solutions that meet their environmental and operational goals. We plan to further accelerate customer adoption by offering minimal to potentially zero upfront costs and quick delivery times. With non-binding letters of intent from potential customers for over 700 MWe, we believe our powerhouses are an ideal fit for target markets in decentralized use cases such as data centers, national defense, factories, industrial customers, off-grid and rural customers and utilities.
In addition to selling power under PPAs, we believe we have an embedded opportunity to enhance our mission with our advanced nuclear fuel recycling technology. We are actively developing nuclear fuel recycling capabilities with the goal of deploying a commercial-scale fuel recycling facility in the United States by the 2030s. Used nuclear fuel waste still contains more than 90% of its energy content, and we believe there is enough energy in the form of used nuclear fuel globally to power the expected electrical needs in the United States for 100 years with fast fission power plants. More than 90,000 metric tons of used nuclear fuel waste have been generated since 1950, and an additional 2,000 metric tons are generated every year. Currently, other countries recycle used nuclear fuel waste, but the United States does not, and there is an enormous opportunity to do so. Our reactors are specifically designed to run on either fresh or recycled nuclear fuel, and nuclear fuel recycling could provide future margin uplift for our power sales business, as well as the potential for new revenue streams.
Recent Developments
Business Combination
AltC Acquisition Corp. (“AltC”), previously entered into an Agreement and Plan of Merger and Reorganization, dated as of July 11, 2023 (as amended, modified, supplemented or waived, the “Merger Agreement”), by and among AltC Merger Sub, Inc., a Delaware corporation and a direct and wholly owned subsidiary of AltC (“Merger Sub”), and Legacy Oklo. On May 9, 2024, pursuant to the Merger Agreement, Merger Sub was merged with and into Legacy Oklo, with Legacy Oklo surviving such merger as a wholly owned subsidiary of AltC (the “Merger,” and together with the other transactions contemplated by the Merger Agreement, the “Business Combination”). In connection with the closing of the Business Combination (the “Closing”), AltC changed its name to “Oklo Inc.” The Company is herein referred to as “Oklo” following the Closing, and as “Legacy Oklo” prior to the Closing, as described below.
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As a result of the Business Combination, and after giving effect to the conversion of all outstanding Legacy Oklo common stock and shares of Legacy Oklo common stock issued upon conversion of Legacy Oklo preferred stock and Legacy Oklo SAFE Notes, which occurred immediately prior to the effective time of the Merger (i) each issued and outstanding Legacy Oklo common stock converted into the right to receive approximately 6.062 shares of newly issued shares of Class A common stock, par value $0.01 per share (“Oklo Class A common stock”), and (ii) each stock option to purchase Legacy Oklo common stock (each, a “Legacy Oklo stock option”) converted into the right to receive an option to purchase Oklo Class A common stock (an “Oklo Option”) having substantially similar terms to the corresponding Legacy Oklo stock option, including with respect to vesting and termination-related provisions, except that each such Oklo Option represented the right to receive the number of shares of Oklo Class A common stock equal to the product of (a) the number shares of Legacy Oklo common stock subject to the corresponding Legacy Oklo stock option immediately prior to the effective time of the Merger and (b) approximately 6.062.
In addition, in connection with the Business Combination, the contingent right to receive up to an aggregate of 15,000,000 shares of Oklo Class A common stock, which will be issued to eligible holders of pre-Closing securities of the Company during the five-year period following the Closing, in three separate tranches (i) upon the satisfaction of certain price targets or (ii) if the Company undergoes a change in control (a “Change in Control” as defined in the Merger Agreement), the price per share received by stockholders of Oklo in such Change in Control transaction, among other certain conditions and other provisions. In addition, certain AltC founders received 12,500,000 shares of Oklo Class A common stock subject to vesting during the five-year period following the Closing in four separate tranches upon the satisfaction of certain price targets or in the event of a sale of the Company, among other conditions.
After giving effect to the Business Combination and the redemption of AltC Class A common stock in connection with the special meeting of stockholders on May 7, 2024, there were 122,096,270 shares of Oklo Class A common stock issued and outstanding. Of those shares, 78,996,459 were issued to holders of Legacy Oklo equity securities in respect of such Legacy Oklo equity securities, representing approximately 64.7% of Oklo’s Class A common stock voting power.
Oklo’s Class A common stock commenced trading on the New York Stock Exchange (“NYSE”) under the symbols “OKLO”, on May 10, 2024.
Key Factors Affecting Our Performance
We believe that our future success and financial performance depend on a number of factors that present significant opportunities for our business, but also pose risks and challenges, including those discussed in the section titled “Risk Factors” in this Current Report on Form 8-K.
Product Development Plan
We plan to leverage the next-generation fast fission powerhouses that we are developing in order to sell power to a variety of potential customers, including data centers, national defense, factories, industrial customers, off-grid and rural customers and utilities.
Commercial deployment of any advanced fission power plant requires obtaining regulatory approvals for design, construction, and operation. Our regulatory strategy has been focused on a custom combined license application. We submitted an initial custom combined license application with the NRC in March 2020, which was denied without prejudice in 2022, and we are working toward submitting an updated custom combined license application for review. In March 2020, we became the first advanced fission company to submit a custom combined license application, and we remain the only such company to do so. It is uncertain when, if at all, we will obtain regulatory approvals for the design, construction and operation of any of our powerhouses. Our financial condition and results of operation are likely to be materially and adversely affected if we do not obtain such approvals and to the extent this process takes longer or costs more than we expect.
Additionally, we plan to be the designer, builder, owner, and operator of our powerhouses and plan to focus on small-scale powerhouses (15 MWe to 50 MWe). As a result, we have an incentive to relentlessly focus on the full lifecycle of a safe, well-maintained, cost-effective powerhouse and holistically implement the benefits of an inherently safe, simple design. We expect this approach to enable us to reduce and manage lifecycle regulatory and operating costs in an integrated fashion, as opposed to the historical model used in the nuclear power industry that divides the incentives and responsibilities between the developer and the utility. However, this model exposes us directly to the costs of building, owning and operating our powerhouses. Our cost projections are heavily dependent upon fuel and raw materials (such as steel), equipment and technical and construction service providers (such as engineering, procurement, construction firms). The global supply chain, on which we will rely, has been significantly impacted in recent years by inflation, instability in the banking sector, war and other hostilities, the COVID-19 pandemic, and other economic uncertainties, resulting in potential significant delays and cost fluctuations. Similar developments in the future may impact our performance from both a deployment and cost perspective.
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Plan of Operations
To further our target of deploying our first powerhouse in 2026 or 2027, during 2024 we plan to be engaged in the following key initiatives:
| · | Progress regulatory approval with the Nuclear Regulatory Commission (“NRC”) including a Pre-Application Readiness Assessment for our next Combined Operating Licensing Agreement (“COLA”), expected to begin in the first half of 2024. |
| · | Initiate regulatory pre-application related activities with the NRC for licensing of commercial fuel fabrication. |
| · | Continue work related to fuel recycling such as pre-application regulatory alignment efforts with the NRC, research and development both independently and in conjunction with the DOE focused on facility and process design. |
| · | Work with INL on fuel manufacturing, including preparation of documentation for regulatory review and finalization of the facility design. |
| · | Advance partnerships related to fuel enrichment, fuel fabrication, and other key supply chain elements, as well as other procurement activities to expand our fuel sourcing supply chain. |
| · | Execute on key non-fuel elements of our supply chain including, steam turbine generator sourcing, steel, and other construction inputs. |
| · | Progress engineering procurement and construction negotiations for construction of Aurora powerhouses. |
| · | Initiating site preparation for announced facilities at the INL, and Piketon, Ohio as well as progressing similar plans at the Eielson Air Force Base in Alaska. |
| · | Negotiate and execute additional letters of intent to purchase power through power purchase agreements with potential multiple customers. |
| · | Continue to hire additional personnel and implement processes, and systems necessary to deliver our business strategy. |
For the three months ended March 31, 2024, our total operating expenses were $7,370,388. We expect our total operating expenses for 2024 to be in the range of $40,000,0000 to $50,000,000.
Nuclear Energy Industry
The nuclear energy industry operates in a politically sensitive environment, and the successful execution of our business model is dependent upon public support for nuclear power, in general, in the U.S. and other countries. Recently, the U.S. government has indicated through bipartisan action that it recognizes the importance of nuclear power in meeting the United States’ growing energy needs. However, the current political environment in the U.S. could change at any time, including in response to events and circumstances over which we exercise no control and the perception of such events and circumstances. Additionally, opposition by third parties could delay the licensing that our business model requires. As a result, our performance will depend in part on factors generally affecting the views and policies regulating nuclear energy industry, which we cannot predict over the long term.
Key Components of Results of Operations
Operating Expenses
Oklo’s operating expenses consist of research and development and general and administrative expenses.
Research and Development
Research and development (“R&D”) expenses represent costs incurred to develop our technology. These costs consist of personnel costs, including salaries, employee benefit costs, bonuses and stock-based compensation expenses, software costs, computing costs, hardware and experimental supplies, and expenses for outside engineering contractors for analytical work and consulting costs. We expense all R&D costs in the periods in which they are incurred, however, occasionally the reimbursement would be received in the following period.
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Oklo has several recycling technology projects awarded as R&D cost-share projects through the Department of Energy’s Advanced Research Projects Agency — Energy (“ARPA-E”) and the DOE Technology Commercialization Fund (“TCF”). The TCF project does not involve any funds being reimbursed to Oklo. A budget was initially approved for each of these cost-share projects, and as certain expenses and capital expenditures for equipment, are incurred, such expenses or capital expenditures are reported to ARPA-E and then a pre-determined percentage of such expenses or capital expenditures are reimbursed by ARPA-E back to Oklo. The expenses are categorized as R&D expenses which are then partially reimbursed.
General and Administrative
Our general, and administrative (“G&A”) expenses primarily comprise various components not related to R&D, such as personnel costs, regulatory fees, promotion expenses, costs associated with maintaining and filing intellectual property, meals and entertainment expenses, travel expenses, and other expenditures related to external professional services including legal, engineering, marketing, human resources, audit, and accounting services. Personnel costs include salaries, benefits, and stock-based compensation expenses. As we continue to grow and expand our workforce and operations, and in light of the increased costs associated with operating as a public company, we anticipate that our G&A expenses will rise for the foreseeable future.
Other Income (Loss)
Other income (loss) consists of interest income and the remeasurement gains and losses related to simple agreements for future equity (“SAFEs”).
Income Taxes
Income taxes primarily consists of income taxes in certain jurisdictions in which we conduct business. We have a full valuation allowance for deferred tax assets, including net operating loss carryforwards and tax credits related primarily to research and development. To date, because we are pre-revenue, income taxes have been minimal.
Results of Operations
The following tables set forth our results of operations for the periods presented. The period-to-period comparison of financial results is not necessarily indicative of future results.
Comparison of the Three Months Ended March 31, 2024 and 2023
The following tables set forth our historical results for the periods indicated, and the changes between periods:
| Three Months Ended March 31, | 2024 versus 2023 | |||||||||||||||
| 2024 | 2023 | $ Change | % Change | |||||||||||||
| Operating expenses | ||||||||||||||||
| Research and development | $ | 3,660,642 | $ | 1,916,450 | $ | 1,744,192 | 91.0 | % | ||||||||
| General and administrative | 3,709,746 | 1,419,848 | 2,289,898 | 161.3 | % | |||||||||||
| Total operating expenses | 7,370,388 | 3,336,298 | 4,034,090 | 120.9 | % | |||||||||||
| Loss from operations | (7,370,388 | ) | (3,336,298 | ) | (4,034,090 | ) | 120.9 | % | ||||||||
| Other income (loss) | ||||||||||||||||
| Change in fair value of simple agreement for future equity | (16,793,000 | ) | (1,373,000 | ) | (15,420,000 | ) | 1123.1 | % | ||||||||
| Interest income | 141,303 | 325 | 140,978 | NM | ||||||||||||
| Total other loss | (16,651,697 | ) | (1,372,675 | ) | (15,279,022 | ) | 1113.1 | % | ||||||||
| Loss before income taxes | (24,022,085 | ) | (4,708,973 | ) | (19,313,112 | ) | 410.1 | % | ||||||||
| Income taxes | - | - | - | NM | ||||||||||||
| Net loss | $ | (24,022,085 | ) | $ | (4,708,973 | ) | $ | (19,313,112 | ) | 410.1 | % | |||||
Percentage changes that are considered not meaningful are denoted with NM.
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Research and Development
The following table sets forth R&D expenses by category:
| Three Months Ended March 31, | 2024 versus 2023 | |||||||||||||||
| 2024 | 2023 | $ Change | % Change | |||||||||||||
| Payroll and employee benefits of research and development personnel | $ | 2,377,413 | $ | 1,343,037 | $ | 1,034,376 | 77.0 | % | ||||||||
| Stock-based compensation | 394,748 | 33,315 | 361,433 | 1084.9 | % | |||||||||||
| Subscription and professional fees | 534,350 | 81,056 | 453,294 | 559.2 | % | |||||||||||
| Travel, entertainment and other related expenses | 127,656 | 151,992 | (24,336 | ) | -16.0 | % | ||||||||||
| Other expenses | 226,475 | 307,050 | (80,575 | ) | -24.2 | % | ||||||||||
| Total research and development expenses | $ | 3,660,642 | $ | 1,916,450 | $ | 1,744,192 | 91.0 | % | ||||||||
R&D expenses increased by $1,744,192 or 91.0%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The increase was primarily due to an increase of $1,034,376 in total payroll and employee benefits of research and development personnel attributable to an increase in the weighted-average headcount of approximately 70% and an increase in salary over the prior period, an increase of $361,433 in stock-based compensation expenses, and an increase of $453,294 in subscription and professional fees; partially offset by a decrease of $80,575 in other expenses.
General and Administrative
The following table sets forth G&A expenses by category:
| Three Months Ended March 31, | 2024 versus 2023 | |||||||||||||||
| 2024 | 2023 | $ Change | % Change | |||||||||||||
| Payroll and employee benefits of general corporate functions and finance personnel | $ | 1,192,777 | $ | 647,992 | $ | 544,785 | 84.1 | % | ||||||||
| Stock-based compensation | 272,726 | 14,926 | 257,800 | 1727.2 | % | |||||||||||
| Regulatory fees | 95,307 | 218,154 | (122,847 | ) | -56.3 | % | ||||||||||
| Professional services | 1,681,903 | 344,658 | 1,337,245 | 388.0 | % | |||||||||||
| Travel, entertainment and other expenses | 467,033 | 194,118 | 272,915 | 140.6 | % | |||||||||||
| Total general and administrative expenses | $ | 3,709,746 | $ | 1,419,848 | $ | 2,289,898 | 161.3 | % | ||||||||
G&A expenses increased by $2,289,898, or 161.3% for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The increase was primarily due to an increase of $1,337,245 in professional services primarily due to an increase in accounting and tax service fees, an increase of $544,785 in payroll and employee benefits of general corporate functions and finance personnel attributable to an increase in the weighted-average headcount of approximately 44% and average salary over the prior period, and an increase of $272,915 related to travel, entertainment, and other expenses; partially offset by a decrease of $122,847 in regulatory fees.
Other Loss
The following table sets forth other loss:
| Three Months Ended March 31, | 2024 versus 2023 | |||||||||||||||
| 2024 | 2023 | $ Change | % Change | |||||||||||||
| Change in fair value of simple agreement for future equity | $ | (16,793,000 | ) | $ | (1,373,000 | ) | $ | (15,420,000 | ) | 1123.1 | % | |||||
| Interest income | 141,303 | 325 | 140,978 | NM | ||||||||||||
| Total other loss | $ | (16,651,697 | ) | (1,372,675 | ) | $ | (15,279,022 | ) | 1113.1 | % | ||||||
The loss for change in fair value of SAFEs of $16,793,000 for the three months ended March 31, 2024 represents the remeasurement loss in the fair value related to the simple agreement for future equity as compared to the fair value as of December 31, 2023. The loss for change in fair value of SAFEs of $1,373,000 for the three months ended March 31, 2023 represents the remeasurement loss in the fair value related to the simple agreement for future equity as compared to the fair value as of December 31, 2022.
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Interest income increased by $140,978, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The increase was primarily due to an increase in interest income related to an increase in our cash balances from the prior period.
Liquidity and Capital Resources
Since inception, we have financed our operations primarily through the issuance and sale of equity, equity-linked instruments, such as SAFEs, alternative arrangements and preferred stock. We have not generated any cash from our operations to date.
In addition to our current cash resources, we entered into the Merger Agreement in July 2023, which closed on May 9, 2024. Our consolidated financial statements do not reflect the transactions contemplated by the Business Combination. Management believes the pro forma cash and cash equivalents of approximately $301.7 million after the Business Combination will be adequate to fund our planned operations for at least the next twelve months.
As of March 31, 2024, our cash and cash equivalents were $38,018,782. We continue to incur significant operating losses. For the three months ended March 31, 2024 and 2023, we had a net loss of $24,022,085 and $4,708,973 respectively, and used cash in operating activities of $7,287,377 and $3,262,366, respectively. As of March 31, 2024 and 2023, we had accumulated deficits of $85,515,529 and $61,493,444, respectively. Management expects that significant on-going operating expenditures will be necessary to successfully implement our business plan and develop and market its products. These circumstances raised substantial doubt about our ability to continue as a going concern for at least the next twelve months.
Immediately following the closing of the Business Combination, we had additional cash of approximately $263.3 million, after giving effect to the payment of transaction expenses, which will be utilized to fund our powerhouses, operations and growth plans. We believe that as a result of the Business Combination our existing cash and cash equivalents, as well as cash received from the Business Combination, will be sufficient to fund our operations for the next twelve months from the date the financial statements were issued as of and for the three months ended March 31, 2024.
Our future capital requirements will depend on many factors, including the timing and extent of our spending to support the completion of our powerhouses and research and development efforts, and the cost associated with our operations and its growth. While we believe that the cash received from the Business Combination will be sufficient to meet our current contemplated business plan, there can be no assurance this will be the case. In order to finance our plan for our powerhouses and associated costs, it is possible that we will need to raise additional financing. If additional financing is required by us from outside sources, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital on acceptable terms when needed, we could be required to delay and scale back some of our business plan and development of our powerhouses and other operations, which could materially harm our business, prospects, financial condition, and operating results. Our accompanying consolidated financial statements contained elsewhere in Exhibit 99.1 to this Current Report on Form 8-K have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
Cash Flows Comparison
The following table sets forth our cash flows for the period indicated.
Cash Flows Comparison for the Three Months Ended March 31, 2024 and 2023
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Net cash used in operating activities | $ | (7,287,377 | ) | $ | (3,262,366 | ) | ||
| Net cash used in investing activities | (96,733 | ) | - | |||||
| Net cash provided by financing activities | 35,535,304 | 340,000 | ||||||
| Net increase (decrease) in cash and cash equivalents | $ | 28,151,194 | $ | (2,922,366 | ) | |||
| Cash and cash equivalents, end of period | $ | 38,018,782 | $ | 6,731,162 | ||||
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Operating Activities
Net cash used in operating activities of $7,287,377 during the three months ended March 31, 2024, was primarily attributable to our net loss of $24,022,085, offset by $17,509,315 in noncash adjustments and $774,607 increase in our working capital. Noncash adjustments consisted of $48,841 in depreciation and amortization, $16,793,000 in loss upon change in fair value of SAFEs, and $667,474 in share-based compensation. The $774,607 increase in working capital is primarily due to a $292,060 use of cash for prepaid and other current assets, a $574,395 use of cash for accounts payable and a $6,755 use of cash for the operating lease liability; offset by a $25,361 decrease in other assets and a $73,242 increase for other accrued expenses.
Net cash used in operating activities of $3,262,366 during the three months ended March 31, 2023 was primarily attributable to our net loss of $4,708,973, offset by $1,432,237 in noncash adjustments and a $14,370 decrease in our working capital. Noncash adjustments consisted of $10,996 in depreciation and amortization, $1,373,000 in loss upon change in fair value of SAFEs, and $48,241 in share-based compensation. The $14,370 decrease in working capital is primarily due to a $255,208 use of cash for prepaid and other assets, a $420,901 use of cash for accounts payable and a $4,991 use of cash for the operating lease liability; offset by a $5,377 decrease in other assets and a $690,093 increase for other accrued expenses.
Investing Activities
Net cash used in investing activities for the three months ended March 31, 2024 and 2023 was due to the purchase of property and equipment of $96,733 and $0, respectively.
Financing Activities
Net cash provided by financing activities for the three months ended March 31, 2024 was from the proceeds from the issuance of SAFEs of $10,232,000 and proceeds from the exercise of stock options of $439,922; offset by payment of deferred issuance costs of $136,618. Net cash provided by financing activities for the three months ended March 31, 2023 was from the proceeds from the issuance of SAFEs of $340,000.
Commitments and Contractual Obligations
We do not have any material commitments or contractual obligations other than with respect to the leases under which we lease real estate for office space. These leases are classified as operating leases with various expiration dates through 2024. See Note 13 in our accompanying consolidated financial statements contained elsewhere in Exhibit 99.1 to this Current Report on Form 8-K for more information regarding our commitments and contractual obligations.
Off-Balance Sheet Arrangements
As of the date of this Current Report on Form 8-K, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Critical Accounting and Estimates
Our consolidated financial statements and the related notes thereto included elsewhere in this Current Report on Form 8-K are prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts and related disclosures in our financial statements and accompanying notes. We base our estimates on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions due to the inherent uncertainty involved in making those estimates and any such differences may be material.
We believe that the following accounting policies involve a high degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of our operations. See Note 2 in our accompanying consolidated financial statements contained elsewhere in Exhibit 99.1 to this Current Report on Form 8-K for a description of our other significant accounting policies.
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Stock-based Compensation
We account for stock-based compensation by measuring and recognizing expense for all stock-based payments made to employees and non-employees based on the estimated grant-date fair values for all stock-based compensation arrangements. We recognize compensation over each recipient’s requisite service period, which is generally the vesting period. We have elected to recognize actual forfeitures by reducing the stock-based compensation in the same period as the forfeitures occur. We estimate the fair value of stock options granted to employees and non-employees using the Black-Scholes option pricing model. The determination of fair value requires significant judgment and the use of estimates, particularly with regard to Black-Scholes assumptions such as our common stock fair value, stock price volatility, and expected option lives to value equity-based compensation.
We measure the fair value of each stock option at the date of grant using a Black-Scholes option pricing model. Volatility is determined by reference to the actual volatility of several publicly traded companies that are similar to us in our industry sector. We do not anticipate paying any cash dividends in the foreseeable future and therefore use an expected dividend yield of zero in the option valuation model. We use the treasury yield curve rates for the risk-free interest rate in the option valuation model with maturities similar to the expected term of the options. We estimate the calculated the expected term using the simplified method that uses the average of the contractual term of the option and the weighted-average vesting period.
Simple Agreement for Future Equity
We record our SAFEs at fair value that requires significant inputs not observable in the market which cause the instrument to be classified as a Level 3 measurement with the fair value hierarchy. The valuation uses probabilities considering pay-offs under various scenarios as follows: (i) an equity financing where the SAFEs will convert into certain preferred stock; (ii) a liquidity event where the SAFE noteholders will have an option to receive either a cash payment equal to the invested amount under such SAFE Note, or a number of shares of common stock equal to the invested amount divided by the liquidity price; and (iii) dissolution event where the SAFE noteholders will be entitled to receive a portion of the related proceeds equal to the purchase amount. We utilized an independent third-party to determine the fair value of the SAFEs under the Monte Carlo simulation method which was used to estimate the future market value of our invested capital (“MVIC”) at a liquidity event and the expected payment to the SAFE holders at each simulated MVIC value. We believe these assumptions would be made by a market participant in estimating the valuation of the SAFEs. We assess these assumptions and estimates on an on-going basis as additional data impacting the assumptions and estimates are obtained.
There is substantial judgment in selecting the assumptions which we use to determine the fair value of the SAFEs and other companies could use similar market inputs and experience and arrive at different conclusions with respect to those used to calculate fair value. Using alternative assumptions could cause there to be differences in the resulting fair value. If the fair value were to increase, the amount of loss that would result would also increase. Conversely, if the fair value were to decrease, the amount of expense would decrease.
Emerging Growth Company Accounting Election
Upon completion of the transaction, we expect to operate with Emerging Growth Company (EGC) status within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs. We could retain EGC status until December 31, 2026, although circumstances could cause us to lose that status earlier, including if the market value of common stock held by non-affiliates exceeds $700,000,000 as of any June 30 before that time, in which case we would no longer qualify for EGC status as of the following December 31.
Further, Section 102(b)(1) of the JOBS Act exempts EGCs from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-EGCs but any such election to opt out is irrevocable. We intend to take advantage of the benefits of this extended transition period.
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Recent Accounting Pronouncements
A discussion of recently issued accounting standards applicable to Legacy Oklo is described in Note 2, Summary of Significant Accounting Policies, in the notes to the consolidated financial statements contained elsewhere in Exhibit 99.1 to this Current Report on Form 8-K.
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Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Defined terms included below but not defined in this Exhibit 99.3 have the same meaning as terms defined and included elsewhere in this Current Report on Form 8-K (this “Report”) filed with the Securities and Exchange Commission (the “SEC”). Unless the context otherwise requires, “we,” “us,” “our, “Oklo” and the “Company,” refers to Oklo Inc. (f/k/a AltC Acquisition Corp.) and its subsidiaries after giving effect to the Closing, “Legacy Oklo” refers to Oklo Inc. prior to the Closing, and “AltC” refers to AltC Acquisition Corp. prior to the Closing.
Introduction
The following unaudited pro forma condensed combined financial information presents the combination of financial information of AltC and Legacy Oklo, adjusted to give effect to the Business Combination and related transactions. The following unaudited pro forma condensed combined financial information presents the combination of the financial information of AltC and Legacy Oklo adjusted to give effect to the Business Combination and related transactions. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.”
The historical financial information of AltC was derived from the unaudited condensed financial statements of AltC as of and for the three months ended March 31, 2024 and 2023 and the audited financial statements as of and for the years ended December 31, 2023 and 2022, which are incorporated by reference. The historical financial information of Legacy Oklo was derived from the unaudited financial statements of Legacy Oklo as of and for the three months ended March 31, 2024 and 2023, included as an exhibit to this Report and incorporated by reference, and the audited financial statements as of and for the year ended December 31, 2023 and 2022, which are incorporated by reference. This information should be read together with AltC’s and Legacy Oklo unaudited financial statements, and related notes, the sections titled “AltC Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Legacy Oklo Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information incorporated by reference or included as an exhibit to this Report.
The following unaudited pro forma condensed combined balance sheet as of March 31, 2024, assumes that the Business Combination occurred on March 31, 2024. The unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2024 and for the year ended December 31, 2023, assume that the Business Combination occurred on January 1, 2023.
The unaudited pro forma condensed combined financial statements have been presented for illustrative purposes only and do not necessarily reflect what the combined company’s (following the Business Combination referred to as the “combined company”) financial condition or results of operations would have been had the Business Combination occurred on the dates indicated. Further, the unaudited pro forma condensed combined financial information also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations of the combined company may differ significantly from the pro forma amounts reflected herein due to a variety of factors.
Business Combination and Related Transactions
On May 9, 2024, pursuant to the Merger Agreement, Merger Sub merged with and into Legacy Oklo, with Legacy Oklo surviving the Merger as a wholly owned subsidiary of AltC.
The aggregate consideration for the Business Combination of $875,000,000, or the Equity Value, was paid in the form of shares of AltC Class A common stock (following the Business Combination referred to as Oklo Class A common stock) valued at $10.00 per share (the Closing Merger Consideration), to Legacy Oklo equityholders, including Legacy Oklo stockholders and holders of Legacy Oklo SAFEs, as well as contingent consideration issued to eligible holders of pre-Closing securities of Legacy Oklo over a five-year period following the Closing, or the Earnout Period, of up to 15,000,000 additional shares of Oklo Class A common stock, or the Earnout Shares, in the aggregate in three separate tranches upon the occurrence of each Earnout Triggering Event as follows:
| · | Earnout Triggering Event I requires the issuance of 7,500,000 Oklo Class A common stock to Eligible Legacy Oklo equityholders when the stock trading price is equal to or greater than $12.00 per share for 20 trading days within a 60 consecutive trading day period or a Change in Control of Oklo pursuant to which holders of Oklo Class A common stock have the right to receive consideration implying a value per share greater than or equal to $12.00; |
1
| · | Earnout Triggering Event II requires the issuance of 5,000,000 Oklo Class A common stock to Eligible Legacy Oklo equityholders when the stock trading price is equal to or greater than $14.00 per share for 20 trading days within a 60 consecutive trading day period or a Change in Control of Oklo pursuant to which holders of Oklo Class A common stock have the right to receive consideration implying a value per share greater than or equal to $14.00; and |
| · | Earnout Triggering Event III requires the issuance of 2,500,000 Oklo Class A common stock to Eligible Legacy Oklo equityholders when the stock trading price is equal to or greater than $16.00 per share for 20 trading days within a 60 consecutive trading day period or a Change in Control of Oklo pursuant to which holders of Oklo Class A common stock have the right to receive consideration implying a value per share greater than or equal to $16.00. |
Each Earnout Triggering Event is subject to certain conditions and other provisions. The stock trading price, as described above, is based upon (A) the closing sale price being equal or greater that the stock trading price of one share of Oklo Class A common stock as quoted on the NYSE for any twenty trading days within any sixty consecutive trading day period within the Earnout Period (the “stock trading price”). If any of the Earnout Triggering Events, as described in the foregoing, are not achieved within the Earnout Period, the Earnout Shares that could have been issued upon the occurrence of the applicable Earnout Triggering Event will be forfeited.
At the Closing, the AltC founder shares unvested and will revest over a five-year period following the Closing, or the Vesting Period, of up to 12,500,000 additional shares of Oklo Class A common stock, or the Founder Shares, in the aggregate in four tranches upon the occurrence of the Vesting Triggering Events as follows:
| · | Vesting Trigger Event I requires the vesting of 6,250,000 of the Founder Shares when the stock trading price equals or exceeds $10.00 per share for 20 trading days within a 60 consecutive trading day period or in the event of a Sale of Oklo pursuant to which holders of Oklo Class A common stock paid or implied in such Sale equals or exceeds $10.00 per share; |
| · | Vesting Trigger Event II requires the vesting of 3,125,000 of the Founder Shares when the stock trading price equals or exceeds $12.00 per share for 20 trading days within a 60 consecutive trading day period or in the event of a Sale of Oklo pursuant to which holders of Oklo Class A common stock paid or implied in such Sale equals or exceeds $12.00 per share; |
| · | Vesting Trigger Event III requires the vesting of 1,562,500 of the Founder Shares when the stock trading price equals or exceeds $14.00 per share for 20 trading days within a 60 consecutive trading day period or in the event of a Sale of Oklo pursuant to which holders of Oklo Class A common stock paid or implied in such Sale equals or exceeds $14.00 per share; and |
| · | Vesting Trigger Event IV requires the vesting of 1,562,500 of the Founder Shares when the stock trading price equals or exceeds $16.00 per share for 20 trading days within a 60 consecutive trading day period or in the event of a Sale of Oklo pursuant to which holders of Oklo Class A common stock paid or implied in such Sale equals or exceeds $16.00 per share. |
Each Vesting Triggering Event is subject to certain conditions. In each case, the price paid or implied in such Sale, as defined in the Sponsor Agreement, will be determined after (i) taking into account the dilutive effect of any Earnout Shares that have been or would be issued at Earnout Triggering Event I, Earnout Triggering Event II and Earnout Triggering Event III, as applicable, and (ii) excluding any Founder Shares that have been or would be forfeited pursuant to the Sponsor Agreement (i.e., the unvested Founder Shares that do not vest upon the occurrence of a Sale will be forfeited immediately prior to the closing of such Sale). If any of the Vesting Triggering Events, as described in the foregoing, are not achieved within the Vesting Period, the Founder Shares will be forfeited.
The Earnout Shares, exclusive of Earnout Shares attributable to the Legacy Oklo vested options at Closing as further described below, and Founder Shares will be recorded at fair value at Closing of the Business Combination and classified as stockholders’ equity. Because the Business Combination is accounted for as a reverse recapitalization, the issuance of the Earnout Shares and vesting of the Founder Shares will be treated as a deemed dividend and since Legacy Oklo does not have retained earnings, the issuance and vesting will be recorded within additional-paid-in-capital and have a net nil impact on additional paid-in capital. Legacy Oklo determined the fair value of the Earnout Shares and Founder Shares to be approximately $126,000,000 and $104,000,000, respectively, based on a valuation using a Monte Carlo simulation with key inputs and assumptions such as stock price, term, dividend yield, risk-free rate, and volatility. The fair value of the Earnout Shares and Founder Shares are subject to change as additional information becomes available and additional analyses are performed over the fair value upon the Closing of the Business Combination and such changes in fair value could be material. The unaudited pro forma condensed combined financial statements do not reflect pro forma adjustments related to the recognition of the Earnout Shares and Founder Shares because there is no net impact on stockholders’ equity on a pro forma combined basis.
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For the Earnout Shares attributable to the Legacy Oklo vested options, where each Legacy Oklo vested option holder will receive a pro rata share of the Earnout Shares as if their Legacy Oklo vested options were outstanding at the Closing of the Business Combination pursuant to the applicable Earnout Triggering Event, the unaudited pro condensed combined financial statement reflect a pro forma adjustment related to stock-based compensation costs of $3,480,000 representing the incremental costs of the modification of Legacy Oklo’s awards for the vested options holders’ contingent right to receive a pro rata share of the Earnout Shares recorded at the Business Combination.
As part of the Business Combination, in the case of holders of Legacy Oklo options, each outstanding Legacy Oklo option were converted into an option to purchase, based on the Exchange Ratio, upon the same terms and conditions as are in effect with respect to the corresponding Legacy Oklo option immediately prior to the Closing, including with respect to vesting and termination-related provisions, a number of shares of Oklo Class A common stock (rounded down to the nearest whole share) equal to the product of (x) the number of Legacy Oklo common stock underlying such option immediately prior to the Closing and (y) the number of shares of Oklo Class A common stock issued in respect of each Legacy Oklo common stock in the Business Combination pursuant to the Merger Agreement, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per Legacy Oklo common stock underlying such option immediately prior to the Closing divided by (B) the number of shares of Oklo Class A common stock issued in respect of each Legacy Oklo common stock in the Business Combination pursuant to the Merger Agreement.
Upon the terms and subject to the conditions set forth in the Merger Agreement, at the Closing, the pro forma adjustments giving effect to the Business Combination and related transactions are summarized below, and are discussed further in the footnote to these unaudited pro forma condensed combined financial statements:
| · | the Merger of Merger Sub, the wholly owned subsidiary of AltC, with and into Legacy Oklo, with Legacy Oklo as the surviving company; |
| · | each share of Legacy Oklo common stock, including shares of Legacy Oklo common stock issued upon the pre-Closing conversion of Legacy Oklo preferred stock and SAFEs, were automatically surrendered and no longer exist, and were exchanged, in the aggregate, for the Closing Merger Consideration; and |
| · | the exchange of all outstanding vested and unvested Legacy Oklo stock options into Oklo stock options exercisable for shares of Oklo Class A common stock with the same terms except for the number of shares exercisable and the exercise price, each of which was adjusted using the Exchange Ratio. |
The unaudited pro forma condensed combined financial information also reflects the redemption into cash of AltC’s Class A common stock by public stockholders of AltC who elected to exercise their redemption rights for a total of 710 shares and an aggregate payment of $7,458.
At the Closing, each share of Legacy Oklo common stock issued and outstanding immediately prior to the Closing was automatically surrendered and exchanged for 78,996,459 shares of AltC Class A common stock (as converted into Oklo Class A common stock after the Closing and the effectiveness of Oklo’s certificate of incorporation) and issued to Oklo stockholders in exchange for all outstanding shares of Legacy Oklo common stock (including shares of Legacy Oklo common stock resulting from the conversion of Legacy Oklo preferred stock and Legacy Oklo SAFEs immediately prior to the Closing) at the Exchange Ratio of 6.062. Further, 1,450,000 shares of Oklo Class A common stock were issued in exchange for AltC private placement shares held by the Sponsor pursuant to the Sponsor Agreement. A reserve was established for issuance up to: (i) 10,432,749 shares of Oklo Class A common stock in respect of the Legacy Oklo options assumed pursuant to the terms of the Merger Agreement; and (ii) 15,000,000 shares of Oklo Class A common stock for the potential future issuance of the Earnout Shares, as outlined above.
After giving effect to the Business Combination, the redemption of AltC Class A common stock in connection with the Special Meeting, there were 122,096,270 shares of Oklo’s Class A common stock issued and outstanding. Of those shares, 78,996,459 were issued to holders of Legacy Oklo equity securities in respect of such securities, representing approximately 64.7% of Oklo’s Class A common stock voting power at the Closing.
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Oklo’s Class A common stock commenced trading on the NYSE under the symbol “OKLO” on May 10, 2024.
The following summarizes the pro forma Oklo Class A common shares outstanding immediately following the Business Combination (1):
| Shares | % | |||||||
| Stockholders | ||||||||
| Legacy Oklo stockholders | 78,996,459 | 64.7 | % | |||||
| Sponsor (2) | 13,950,000 | 11.4 | % | |||||
| AltC public stockholders | 29,149,811 | 23.9 | % | |||||
| Total common stock | 122,096,270 | 100.0 | % | |||||
(1) The table does not include the 15,000,000 shares underlying the Legacy Oklo Earnout Shares and 10,432,749 shares underlying the Legacy Oklo options.
(2) 12,500,000 shares issued to the Sponsor representing the Founder Shares will vest and no longer be subject to forfeiture pursuant to the applicable Vesting Triggering Event.
Accounting Treatment
The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP because Legacy Oklo has been determined to be the accounting acquirer. Under this method of accounting, AltC, which is the legal acquirer, will be treated as the accounting acquiree for financial reporting purposes and Legacy Oklo, which is the legal acquiree, will be treated as the accounting acquirer. Accordingly, the consolidated assets, liabilities and results of operations of Legacy Oklo will become the historical financial statements of Oklo, and AltC’s assets, liabilities and results of operations will be consolidated with Legacy Oklo’s beginning on the acquisition date. For accounting purposes, the financial statements of Oklo will represent a continuation of the financial statements of Legacy Oklo with the Business Combination being treated as the equivalent of Legacy Oklo issuing stock for the net assets of AltC, accompanied by a recapitalization. The net assets of AltC will be stated at historical costs and no goodwill or other intangible assets will be recorded. Operations prior to the Business Combination will be presented as those of Legacy Oklo in future reports of Oklo.
Legacy Oklo was determined to be the accounting acquirer based on evaluation of the following facts and circumstances:
| · | Legacy Oklo stockholders comprise a relative majority of greater than 64% of the voting power of the combined company; |
| · | Legacy Oklo will have the ability to nominate a majority of the members of the board of directors of the combined company; |
| · | Legacy Oklo’s operations prior to the acquisition comprise the only ongoing operations of combined company; |
| · | Legacy Oklo’s senior management will comprise the senior management of combined company; |
| · | The combined company will assume the Legacy Oklo name; |
| · | The ongoing operations of Legacy Oklo will become the operations of the combined company; and |
| · | Legacy Oklo’s headquarters will become the combined company’s headquarters. |
The following unaudited pro forma condensed combined balance sheet as of March 31, 2024, and the unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2024 and for the year ended December 31, 2023, are based on historical financial statements of AltC and Legacy Oklo. The unaudited pro forma adjustments are based on information currently available, and assumptions and estimates underlying the unaudited pro forma adjustments are described in the accompanying notes. Actual results may differ materially from the assumptions used to present the accompanying unaudited pro forma condensed combined financial information and include immaterial rounding differences.
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Unaudited Pro Forma Condensed Combined Balance Sheet
As of March 31, 2024
| Transaction | ||||||||||||||||||||
| Accounting | ||||||||||||||||||||
| AltC | Legacy Oklo | Adjustments | Pro Forma | |||||||||||||||||
| (Historical) | (Historical) | (Note 4) | Combined | |||||||||||||||||
| Assets | ||||||||||||||||||||
| Current assets: | ||||||||||||||||||||
| Cash and cash equivalents | $ | 420,807 | $ | 38,018,782 | $ | 303,887,109 | A | $ | 301,693,711 | |||||||||||
| - | - | (7,000,000 | ) | C | - | |||||||||||||||
| - | - | (33,032,987 | ) | D | - | |||||||||||||||
| - | - | (600,000 | ) | E | - | |||||||||||||||
| Prepaid and other current assets | 280,860 | 5,737,480 | (4,849,859 | ) | D | 1,168,481 | ||||||||||||||
| Total current assets | 701,667 | 43,756,262 | 258,404,263 | 302,862,192 | ||||||||||||||||
| Property and equipment, net | - | 625,563 | - | 625,563 | ||||||||||||||||
| Right-of-use assets | - | 33,392 | - | 33,392 | ||||||||||||||||
| Marketable securities held in trust account | 307,512,876 | - | (7,458 | ) | B | - | ||||||||||||||
| - | - | (307,505,418 | ) | A | - | |||||||||||||||
| Other assets | - | 25,361 | - | 25,361 | ||||||||||||||||
| Total assets | $ | 308,214,543 | $ | 44,440,578 | $ | (49,108,613 | ) | $ | 303,546,508 | |||||||||||
| Liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) | ||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||
| Accounts payable | $ | - | $ | 2,499,224 | $ | (1,242,985 | ) | D | $ | 1,256,239 | ||||||||||
| Accrued expenses | 939,100 | 1,112,685 | (325,902 | ) | D | 1,125,883 | ||||||||||||||
| - | - | (600,000 | ) | E | - | |||||||||||||||
| Excise tax liability | 2,159,147 | - | (2,159,147 | ) | A | - | ||||||||||||||
| Income tax liability | 1,459,162 | - | (1,459,162 | ) | A | - | ||||||||||||||
| Operating lease lability | - | 37,895 | - | 37,895 | ||||||||||||||||
| Total current liabilities | 4,557,409 | 3,649,804 | (5,787,196 | ) | 2,420,017 | |||||||||||||||
| Simple agreement for future equity | - | 73,067,000 | (73,067,000 | ) | F | - | ||||||||||||||
| Right of first refusal liability | - | 25,000,000 | - | 25,000,000 | ||||||||||||||||
| Deferred legal fee | 92,441 | - | (92,441 | ) | D | - | ||||||||||||||
| Deferred underwriting fee payable | 7,000,000 | - | (7,000,000 | ) | C | - | ||||||||||||||
| Total liabilities | 11,649,850 | 101,716,804 | (85,946,637 | ) | 27,420,017 | |||||||||||||||
| Class A common stock subject to possible redemption | 304,911,595 | - | (304,911,595 | ) | H | - | ||||||||||||||
| Redeemable convertible preferred stock | - | 25,030,520 | (25,030,520 | ) | F | - | ||||||||||||||
| Stockholders’ equity (deficit): | ||||||||||||||||||||
| Common stock | - | 506 | (506 | ) | F | - | ||||||||||||||
| Class A common stock | 145 | - | - | B | 12,210 | |||||||||||||||
| - | - | 2,915 | H | - | ||||||||||||||||
| - | - | 1,250 | I | - | ||||||||||||||||
| - | - | 7,900 | F | - | ||||||||||||||||
| Class B common stock | 1,250 | - | (1,250 | ) | I | - | ||||||||||||||
| Additional paid-in capital | 6,443,978 | 3,208,277 | (7,458 | ) | B | 365,109,810 | ||||||||||||||
| - | - | (36,221,518 | ) | D | - | |||||||||||||||
| - | - | (14,792,275 | ) | G | - | |||||||||||||||
| - | - | 304,908,680 | H | - | ||||||||||||||||
| - | - | 3,480,000 | J | - | ||||||||||||||||
| - | - | 98,090,126 | F | - | ||||||||||||||||
| Accumulated deficit | (14,792,275 | ) | (85,515,529 | ) | - | (88,995,529 | ) | |||||||||||||
| - | - | 14,792,275 | G | - | ||||||||||||||||
| - | - | (3,480,000 | ) | J | - | |||||||||||||||
| Total stockholders' equity (deficit) | (8,346,902 | ) | (82,306,746 | ) | 366,780,139 | 276,126,491 | ||||||||||||||
| Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) | $ | 308,214,543 | $ | 44,440,578 | $ | (49,108,613 | ) | $ | 303,546,508 | |||||||||||
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Unaudited Pro Forma Condensed Combined Statement of Operations
For the Three Months Ended March 31, 2024
| Transaction | ||||||||||||||||||||
| Legacy | Accounting | |||||||||||||||||||
| AltC | Oklo | Adjustments | Pro Forma | |||||||||||||||||
| (Historical) | (Historical) | (Note 4) | Combined | |||||||||||||||||
| Operating expenses | ||||||||||||||||||||
| Research and development | $ | - | $ | 3,660,642 | $ | - | $ | 3,660,642 | ||||||||||||
| General and administrative | - | 3,709,746 | (390,000 | ) | AA | 3,319,746 | ||||||||||||||
| Formation and operational costs | 1,017,452 | - | - | 1,017,452 | ||||||||||||||||
| Total operating expenses | 1,017,452 | 7,370,388 | (390,000 | ) | 7,997,840 | |||||||||||||||
| Loss from operations | (1,017,452 | ) | (7,370,388 | ) | 390,000 | (7,997,840 | ) | |||||||||||||
| Other income (loss) | ||||||||||||||||||||
| Interest earned on marketable securities held in trust account | 3,952,338 | - | (3,952,338 | ) | BB | - | ||||||||||||||
| Change in fair value of simple agreement for future equity | - | (16,793,000 | ) | 16,793,000 | CC | - | ||||||||||||||
| Interest income, net | - | 141,303 | - | 141,303 | ||||||||||||||||
| Total other income (loss), net | 3,952,338 | (16,651,697 | ) | 12,840,662 | 141,303 | |||||||||||||||
| Income (loss) before provision for income taxes | 2,934,886 | (24,022,085 | ) | 13,230,662 | (7,856,537 | ) | ||||||||||||||
| Provision for income taxes | (1,406,517 | ) | - | 1,406,517 | DD | - | ||||||||||||||
| Net income (loss) | $ | 1,528,369 | $ | (24,022,085 | ) | $ | 14,637,179 | $ | (7,856,537 | ) | ||||||||||
| Weighted-average shares outstanding of Oklo Class A common stock - basic and diluted | EE | 122,096,270 | ||||||||||||||||||
| Basic and diluted net loss per share - Oklo Class A common stock | $ | (0.06 | ) | |||||||||||||||||
| Weighted average number of shares outstanding | 5,014,604 | |||||||||||||||||||
| Basic and diluted net loss per share | $ | (4.79 | ) | |||||||||||||||||
| Weighted-average shares outstanding - subject to redemption | 29,150,521 | |||||||||||||||||||
| Basic and diluted net income per share - subject to redemption | $ | 0.04 | ||||||||||||||||||
| Weighted-average shares outstanding - not subject to redemption | 13,950,000 | |||||||||||||||||||
| Basic and diluted net income per share - not subject to redemption | $ | 0.04 | ||||||||||||||||||
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Unaudited Pro Forma Condensed Combined Statement of Operations
For the Year Ended December 31, 2023
| Transaction | ||||||||||||||||||||
| Accounting | ||||||||||||||||||||
| AltC | Legacy Oklo | Adjustments | ||||||||||||||||||
| (Historical) | (Historical) | (Note 4) | Pro Forma Combined | |||||||||||||||||
| Operating expenses | ||||||||||||||||||||
| Research and development | $ | - | $ | 9,763,333 | $ | 2,740,000 | FF | $ | 12,503,333 | |||||||||||
| General and administrative | - | 8,872,684 | 740,000 | FF | 38,254,229 | |||||||||||||||
| - | - | 29,301,545 | GG | - | ||||||||||||||||
| - | - | (660,000 | ) | HH | - | |||||||||||||||
| Formation and operational costs | 4,270,713 | - | - | 4,270,713 | ||||||||||||||||
| Total operating expenses | 4,270,713 | 18,636,017 | 32,121,545 | 55,028,275 | ||||||||||||||||
| Loss from operations | (4,270,713 | ) | (18,636,017 | ) | (32,121,545 | ) | (55,028,275 | ) | ||||||||||||
| Other income (loss) | ||||||||||||||||||||
| Change in fair value of simple agreement for future equity | - | (13,717,000 | ) | 13,717,000 | II | - | ||||||||||||||
| Interest earned on marketable securities held in trust account | 22,231,067 | - | (22,231,067 | ) | JJ | - | ||||||||||||||
| Interest income, net | - | 180,360 | - | 180,360 | ||||||||||||||||
| Total other income (loss) | 22,231,067 | (13,536,640 | ) | (8,514,067 | ) | 180,360 | ||||||||||||||
| Income (loss) before provision for income taxes | 17,960,354 | (32,172,657 | ) | (40,635,612 | ) | (54,847,915 | ) | |||||||||||||
| Provision for income taxes | (6,092,149 | ) | - | 6,092,149 | KK | - | ||||||||||||||
| Net income (loss) | $ | 11,868,205 | $ | (32,172,657 | ) | $ | (34,543,463 | ) | $ | (54,847,915 | ) | |||||||||
| Weighted-average shares outstanding of Oklo Class A common stock - basic and diluted | LL | 122,096,270 | ||||||||||||||||||
| Basic and diluted net loss per share - Oklo Class A common stock | $ | (0.45 | ) | |||||||||||||||||
| Weighted-average number of shares outstanding | 4,778,685 | |||||||||||||||||||
| Basic and diluted net loss per share | $ | (6.73 | ) | |||||||||||||||||
| Weighted-average shares outstanding - subject to redemption | 45,417,697 | |||||||||||||||||||
| Basic and diluted net income per share - subject to redemption | $ | 0.20 | ||||||||||||||||||
| Weighted-average shares outstanding - not subject to redemption | 13,950,000 | |||||||||||||||||||
| Basic and diluted net income per share - not subject to redemption | $ | 0.20 | ||||||||||||||||||
7
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
| 1. | Basis of Presentation |
The Merger was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, AltC, who is the legal acquirer, will be treated as the accounting acquiree for financial reporting purposes and Legacy Oklo, which is the legal acquiree, will be treated as the accounting acquirer for financial reporting purposes.
The unaudited pro forma condensed combined balance sheet as of March 31, 2024, assumes that the Business Combination and related transactions occurred on March 31, 2024. The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2024 and for the year ended December 31, 2023, presents pro forma effect to the Business Combination as if it had been completed on January 1, 2023.
The unaudited pro forma condensed combined balance sheet as of March 31, 2024, has been prepared using, and should be read in conjunction with, the following:
| · | AltC’s unaudited condensed balance sheet as of March 31, 2024 and the related notes for the three months ended March 31, 2024 and 2023, incorporated by reference; and |
| · | Legacy Oklo’s unaudited consolidated balance sheet as of March 31, 2024 and the related notes for the three months ended March 31, 2024 and 2023, included as an exhibit to this Report and incorporated by reference. |
The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2024 and for the year ended December 31, 2023, has been prepared using, and should be read in conjunction with, the following:
| · | AltC’s unaudited condensed statement of operations for the three months ended March 31, 2024 and the audited statements of operations for the years ended December 31, 2023 and 2022, and the related notes, incorporated by reference; and |
| · | Legacy Oklo’s unaudited consolidated statement of operations for the three months ended March 31, 2024 and the audited consolidated statements of operations for the years ended December 31, 2023 and 2022, and the related notes, included as an exhibit to this Report and incorporated by reference. |
As the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented.
The unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings or cost savings that may be associated with the Business Combination.
The pro forma adjustments reflecting the consummation of the Business Combination and related transactions are based on currently available information and assumptions and methodologies that AltC believes are reasonable under the circumstances. The unaudited condensed pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments, and it is possible the difference may be material. AltC believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the business combination and related transactions based on information available to management at the current time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial information.
The unaudited pro forma condensed combined financial information is not necessarily indicative of what the actual results of operations and financial position would have been had the business combination and related transactions taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of the combined company. They should be read in conjunction with the historical financial statements and notes thereto of AltC and Legacy Oklo.
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| 2. | Accounting Policies |
Upon consummation of the Business Combination, management of the combined company performed a comprehensive review of the two entities’ accounting policies. As a result of the review, management of Oklo has not identified differences between the accounting policies of the two entities which have a material impact on the financial statements of Oklo. Based on its analysis, management of Oklo did not identify any differences that would have a material impact on the unaudited pro forma condensed combined financial information. As a result, the unaudited proforma condensed combined financial information does not assume any differences in accounting policies.
| 3. | Adjustments to Unaudited Pro Forma Condensed Combined Financial Information |
The unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the Business Combination and has been prepared for informational purposes only.
The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses” to depict the Transaction Accounting Adjustments and present the Management’s Adjustments. AltC has elected not to present Management’s Adjustments and is only presenting Transaction Accounting Adjustments in the unaudited proforma condensed combined financial information. The historical financial statements have been adjusted in the unaudited pro forma condensed combined financial information to include all necessary Transaction Accounting Adjustments pursuant to Article 11 of Regulation S-X, including those that are not expected to have a continuing impact.
The audited historical financial statements have been adjusted in the unaudited pro forma condensed combined financial information to give pro forma effect to Transaction Accounting Adjustments that reflect the accounting for the transaction under U.S. GAAP. Legacy Oklo and AltC have not had any historical relationship prior to the Business Combination. Accordingly, no proforma adjustments were required to eliminate activities between the companies.
The unaudited pro forma combined statement of operations does not reflect a provision for income taxes or any amounts that would have resulted had the combined company filed consolidated income tax returns during the period presented. The unaudited pro forma condensed combined balance sheet does not reflect the deferred taxes of the combined company as a result of the Business Combination. Since it is likely that the combined company will record a valuation allowance against the total U.S. and state deferred tax assets given the net operating losses as the recoverability of the tax assets is uncertain, the tax provision is zero.
| 4. | Transaction Accounting Adjustments |
Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 2024
| (A) Reflects the transfer of investments held in the trust account to cash and cash equivalents as of March 31, 2024 of $303,887,109 after considered the 1% excise tax of $2,159,147and income tax of $1,459,162, totaling $3,618,309. On the Closing date, the actual balance of cash in the trust account, including accumulated interest earned during the period prior to transfer, was $306,195,274. | |
| (B) Reflects the redemption of 710 shares of AltC Class A common stock at a redemption price of $10.50 per share upon the Business Combination, resulting in a redemption payment of $7,458 from the trust account to AltC public stockholders. | |
| (C) Reflects the settlement of the capital markets advisory fee of $6,125,000 to Citigroup Global Markets Inc. and others of $875,000, totaling $7,000,0000. |
9
|
(D) Represents transaction costs incurred by AltC and Legacy Oklo of approximately $14,012,414 and $29,301,545, respectively. These costs are accounted for a reduction in the combined cash account with a corresponding reduction in additional paid-in capital or accumulated deficit consistent with the treatment described in SEC Staff Accounting Bulletin Topic 5.A. These transaction costs will not recur in the combined company’s income beyond 12 months after the transaction.
For the AltC transaction costs, $92,441 has been accrued as of the pro forma balance sheet date. The remaining amount of $22,209,104 is reflected as an adjustment to accumulated losses. The AltC estimated transaction costs exclude the deferred underwriting commissions included in (C) above..
For the Legacy Oklo transaction costs, $3,280,972 has been recorded as prepayments, of which $1,568,887 were unpaid and recorded as of the pro forma balance sheet date. The remaining amount of $10,731,442 is included as an adjustment to additional paid-in capital, of which $8,500,000 represent financial advisory fees. | |
| (E) Represents transaction costs incurred by AltC of $600,000 and paid upon the consummation of the Business Combination. | |
| (F) Reflects the issuance of 78,996,459 shares of Oklo Class A common stock to existing Legacy Oklo equityholders (excluding Earnout Shares attributable to Legacy Oklo vested options of 2,111,507) consisting of Legacy Oklo common stock, redeemable convertible preferred stock and conversion of the SAFEs upon the Closing. | |
|
(G) Reflects the elimination of AltC’s historical accumulated deficit of $14,792,275.
Reflects the elimination of AltC’s historical accumulated deficit after recording the settlement of the capital markets advisory fee as described in (C) above, the transaction costs as described in (D) above. | |
| (H) Reflects the reclassification of 29,149,811 shares of AltC Class A common stock subject to possible redemption to permanent equity at the Business Combination. | |
| (I) Reflects the conversion of 6,250,000 shares of AltC Class B common stock into Oklo Class A common stock at the Business Combination. | |
| (J) Reflects the impact of the incremental costs of $3,480,000 for the modification of Oklo’s awards for the vested options holders’ contingent right to receive a pro rata share of the Earnout Shares recorded at the Business Combination. |
Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined Statement of Operations for the three months ended March 31, 2024
| (AA) Represents an adjustment to eliminate administrative service fees and master services fees that will no longer be paid following the Business Combination. These are non-recurring items. | |
| (BB) Reflects the elimination of interest earned on marketable securities held in the trust account after giving effect to the Business Combination as if it had occurred on January 1, 2023. | |
| (CC) Represents the elimination of change in fair value of simple agreement for future equity at the Business Combination. | |
| (DD) Reflects the reversal of income tax expense after giving effect to the Business Combination as if it had occurred on January 1, 2023. | |
| (EE) The calculation of weighted-average shares outstanding for basic and diluted net loss per share assumes that the Business Combination had occurred on January 1, 2023, and the calculation of weighted-average shares outstanding for basic and diluted net loss per share assumes that the shares have been outstanding for the entire period presented. |
Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 2023
| (FF) Reflects the incremental costs of $3,480,000 for the modification of Legacy Oklo’s awards for the vested options holders’ contingent right to receive a pro rata share of the Earnout Shares recorded at the Business Combination. | |
| (GG) Reflects the estimated transaction costs of $29,301,545 as if incurred on January 1, 2023, the date the Business Combination occurred for the purposes of the unaudited pro forma condensed combined statement of operations. This is a non-recurring item. |
10
| (HH) Represents an adjustment to eliminate administrative service fees and master services fees that will no longer be paid following the Business Combination. These are non-recurring items. | |
| (II) Represents the elimination of change in fair value of simple agreement for future equity at the Business Combination. | |
| (JJ) Reflects the elimination of interest earned on marketable securities held in the trust account after giving effect to the Business Combination as if it had occurred on January 1, 2023. | |
| (KK) Reflects the reversal of income tax expense after giving effect to the Business Combination as if it had occurred on January 1, 2023. | |
| (LL) The calculation of weighted-average shares outstanding for basic and diluted net loss per share assumes that the Business Combination had occurred on January 1, 2023, and the calculation of weighted-average shares outstanding for basic and diluted net loss per share assumes that the shares have been outstanding for the entire period presented. |
| 5. | Net Loss per Share |
Represents the net loss per share calculated using the historical weighted-average shares outstanding, and the issuance of additional shares in connection with the Business Combination, assuming the shares were outstanding since January 1, 2023. As the Business Combination and related transactions are being reflected as if they had occurred at the beginning of January 1, 2023, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares issuable relating to the Business Combination have been outstanding for the entire period presented.
The unaudited pro forma condensed combined financial information has been prepared with the actual redemptions by AltC’s Public Stockholders for the three months ended March 31, 2024:
| Pro forma net loss | $ | (7,856,537 | ) | |
| Weighted-average shares outstanding (1) | 122,096,270 | |||
| Pro forma net loss per common share, basic and diluted | $ | (0.06 | ) |
The unaudited pro forma condensed combined financial information has been prepared with the actual redemptions by AltC’s Public Stockholders for the year ended December 31, 2023:
| Pro forma net loss | $ | (54,847,915 | ) | |
| Weighted-average shares outstanding (1) | 122,096,270 | |||
| Pro forma net loss per common share, basic and diluted | $ | (0.45 | ) |
| (1) | For purposes of calculating diluted earnings per share for the three months ended March 31, 2024 and the year ended December 31, 2023, all outstanding Oklo Class A common stock equivalents, consisting of Legacy Oklo Earnout Shares and Legacy Oklo options, should have been assumed to have been exercised. However, since this results in anti-dilution, the effect of such exercise was not included in the calculation of diluted loss per share. |
11