Concentration of ownership of our ordinary shares among our existing executive officers, directors and principal stockholder may prevent new investors from influencing significant corporate decisions.
Based upon our shares of common stock outstanding as of November 3, 2023, upon the closing of this offering, our executive officers, directors and stockholders who owned more than 5% of our outstanding share capital before this offering will, in the aggregate, beneficially own approximately 34.1% of our outstanding shares of common stock, after giving effect to the sale of shares in this offering. These stockholders, acting together, will be able to significantly influence all matters requiring stockholder approval, including the election and removal of directors and approval of any merger, consolidation or sale of all or substantially all of our assets.
In addition, we and certain of our stockholders are party to that certain Investors Rights Agreement pursuant to which certain of our stockholders have agreed to support each other’s director nominees. For so long as such agreement remains, the remaining stockholders may be prevented from having an influence on the board.
Some of these persons or entities may have interests different than yours. For example, because many of these stockholders purchased their shares at prices substantially below the price at which shares are being sold in this offering and have held their shares for a longer period, they may be more interested in selling our company to an acquirer than other investors, or they may want us to pursue strategies that deviate from the interests of other stockholders.
The market price of our common stock could be negatively affected by sales of substantial amounts of our common stock in the public markets, or the perception in the public markets that these sales may occur.
Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.
After this offering, we will have 56,802,805 shares of common stock outstanding. Of our issued and outstanding shares, all of the shares of common stock sold in our initial public offering are, and all of the shares of common stock to be sold in this offering will be, freely transferable, except for any shares held by our “affiliates,” as that term is defined in Rule 144 under the Securities Act.
Following the consummation of this offering, we, our executive officers and directors, and the selling stockholder will be subject to a 60-day lock-up period provided under lock-up agreements executed in connection with this offering. See “Underwriting.” All of these shares will, however, be able to be resold after the expiration of the lock-up period, as well as pursuant to customary exceptions thereto or upon the waiver of the lock-up agreement by the underwriter.
Sales of significant amounts of stock in the public market or the perception that such sales may occur, could adversely affect prevailing market prices of our common stock or make it more difficult for you to sell your shares of common stock at a time and price that you deem appropriate. The market price of our common stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.
Our directors have a fiduciary duty to consider not only our stockholders’ interests, but also our specific public benefit and the interests of other stakeholders affected by our actions. If a conflict between such interests arises, there is no guarantee that such a conflict would be resolved in favor of our stockholders.
While directors of a traditional corporation are required to make decisions that they believe to be in the best interests of their stockholders, directors of a public benefit corporation have a fiduciary duty to consider not only the stockholders’ interests, but also how its stakeholders are affected by the company’s actions. Under Delaware law, directors are shielded from liability for breach of these obligations if they make informed and disinterested
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