Relative Increase in Number of Authorized Shares of Common Stock for Issuance
The Reverse Stock Split will not affect the number of authorized shares or the par value of our capital stock, which will remain at 3,000,000,000 shares of Common Stock, par value $0.0001 per share, and 100,000,000 shares of preferred stock, par value $0.0001 per share (“Preferred Stock,” and together with our Common Stock, our “Capital Stock”).
Although the number of authorized shares of our Capital Stock will not change as a result of the Reverse Stock Split, the number of shares of our Common Stock issued and outstanding will be reduced in proportion to the ratio selected by the Board. Thus, the Reverse Stock Split will effectively increase the number of authorized and unissued shares of our Common Stock available for future issuance by the amount of the reduction effected by the Reverse Stock Split.
If the proposed Reverse Stock Split amendments are approved, all or any of the authorized and unissued shares of our Common Stock may be issued in the future for such corporate purposes and such consideration as the Board deems advisable from time to time, without further action by the stockholders of our Company and without first offering such shares to our stockholders. When and if additional shares of our Common Stock are issued, these new shares would have the same voting and other rights and privileges as the currently issued and outstanding shares of Common Stock, including the right to cast one vote per share.
Because our stockholders have no preemptive rights to purchase or subscribe for any of our unissued shares of Common Stock, the future issuance of additional shares of Common Stock will reduce our current stockholders’ percentage ownership interest in the total outstanding shares of Common Stock. In the absence of a proportionate increase in our future earnings and book value, an increase in the number of our outstanding shares of Common Stock would dilute our projected future earnings per share, if any, and book value per share of all our outstanding shares of Common Stock. If these factors were reflected in the price per share of our Common Stock, the potential realizable value of a stockholder’s investment could be adversely affected. An issuance of additional shares could therefore have an adverse effect on the potential realizable value of a stockholder’s investment.
Effect on Outstanding Equity Incentive Plans, Convertible Notes and Warrants
The Company maintains the Opendoor Labs Inc. 2014 Stock Plan, the Opendoor Technologies Inc. 2020 Incentive Award Plan (the “2020 Plan”), the Opendoor Technologies Inc. Amended and Restated 2020 Employee Stock Purchase Plan (“2020 ESPP”), and the Opendoor Technologies Inc. 2022 Inducement Award Plan (collectively, the “Plans”), which are designed primarily to provide stock-based incentives to employees and directors of the Company. As of June 2, 2025, options to purchase 6,984,119 shares of our Common Stock (which does not include outstanding purchase rights under our 2020 ESPP) and 52,064,842 restricted stock units were outstanding under the Plans (with performance-based restricted stock units counted based on “target” levels of performance). In the event of a Reverse Stock Split, our Board generally has the discretion to determine the appropriate adjustment to the number of shares available for future issuance, awards granted and share-based award or purchase limits under the Plans. Accordingly, if the Reverse Stock Split is approved by our stockholders and our Board decides to implement the Reverse Stock Split, as of the Effective Time (as defined below) the number of shares of Common Stock issuable upon exercise, vesting or settlement of outstanding awards, the exercise price of all outstanding options and any stock price vesting goals with respect to any outstanding awards under the Plans will be proportionately adjusted (and rounded down to the nearest whole share in the case of shares and up to the nearest whole cent in the case of exercise prices, as applicable) based on the Reverse Stock Split ratio selected by our Board, subject to the terms of such Plans, options, and restricted stock units, as applicable. In addition, the number of shares available for future issuance and any share-based award or purchase limits, as applicable, under the Plans will be proportionately reduced based on the Reverse Stock Split ratio selected by our Board.
In addition, we have issued to third parties warrants to purchase shares of our Common Stock and Convertible Notes which may convert into shares of our Common Stock. As of June 2, 2025, we had issued and outstanding warrants to purchase up to 6,000,000 shares of our Common Stock and Convertible Notes that may be converted into 363,225,666 shares of our Common Stock. If the Reverse Stock Split is approved by our stockholders and our Board decides to implement the Reverse Stock Split, as of the Effective Time, (a) the number of shares issuable upon exercise of the warrants will be reduced proportionally and the exercise price of the Company’s outstanding warrants will be increased proportionately based on the Reverse Stock Split ratio selected by our Board and (b) the conversion rates of the Convertible Notes will be proportionately adjusted in accordance with the applicable indenture governing the Convertible Notes to reflect the Reverse Stock Split.
Our Board has also authorized the Company to effect any other changes necessary, desirable or appropriate to give effect to the Reverse Stock Split, including any applicable technical, conforming changes.
