Search Icon
Skip to Main Content

Form S-1 Interactive Drafting Guide

Certain Relationships And Related Person Transactions

Section summary: Related-person (or related-party) transactions are transactions between a company and its related parties, which include its directors, executive officers, their affiliates and greater than 5% securityholders of the company. In this section of the registration statement, companies are required to disclose information about related-person transactions within the last three years, as set forth in Item 404 of Regulation S-K. These related-person transactions include the following transactions where related persons participated in one form or another: preferred stock financings, employee stock repurchases, loans from the company to employees and directors,  material contractual relationships with affiliates of the company, consulting agreements or arrangements, etc. Discussion of items to be disclosed in this section will go hand in hand with the company’s determination of material contracts to file as exhibits to the registration statement.

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

Other than compensation arrangements for our directors and executive officers, which are described elsewhere in this prospectus, below we describe transactions since January 1, 2022 to which we were a party or will be a party, in which:

  • the amounts involved exceeded or will exceed $120,000; and
  • any of our directors, executive officers, or holders of more than 5% of our outstanding capital stock, or any member of the immediate family of the foregoing persons, which we refer to as our related parties, had or will have a direct or indirect material interest.

Investor Rights Agreement

We have entered into an amended and restated investors’ rights agreement (IRA) with certain holders of our redeemable convertible preferred stock, including certain beneficial holders of more than 5% of our capital stock and entities with which certain of our directors are affiliated. This agreement provides that the holders of common stock issuable upon conversion of our redeemable convertible preferred stock have the right to demand that we file a registration statement or request that their shares of common stock be covered by a registration statement that we are otherwise filing. With respect to this offering, we expect the registration rights to be validly waived. In addition to the registration rights, the IRA provides for certain information rights and a right of first offer. The provisions of the amended and restated IRA, other than those relating to registration rights, will terminate upon the completion of this offering. For more information regarding this agreement, see the section titled “Description of Capital Stock—Registration Rights.”

Voting Agreement

We are party to a voting agreement under which holders of our redeemable convertible preferred stock, including certain beneficial holders of more than 5% of our capital stock and entities with which certain of our directors are affiliated, have agreed to vote in a certain way on certain matters, including with respect to the election of directors. Upon the completion of this offering, the voting agreement will terminate and none of our stockholders will have any special rights regarding the election or designation of members of our board of directors.

Right of First Refusal and Co-Sale Agreement

We are party to a right of first refusal and co-sale agreement with certain holders of our redeemable convertible preferred stock and our founder and certain early service providers, including certain beneficial holders of more than 5% of our capital stock and entities with which certain of our directors are affiliated, pursuant to which such holders have a right of first refusal and co-sale in respect of certain sales of securities by our founder and early service providers. Upon the completion of this offering, the right of first refusal and co-sale agreement will terminate.

Limitations on Liability and Indemnification Agreements

Our amended and restated certificate of incorporation will contain provisions limiting the liability of directors, and our amended and restated bylaws will provide that we will indemnify each of our directors and officers to the fullest extent permitted under Delaware law. Our amended and restated certificate of incorporation and amended and restated bylaws will also provide our board of directors with discretion to indemnify our employees and other agents when determined appropriate by the board. In addition, in connection with this offering, we will enter into an indemnification agreement with each of our directors and executive officers, which will require us to indemnify them. For more information regarding these agreements, see the section titled “Executive Compensation—Limitations of Liability and Indemnification Matters.”

Policies and Procedures for Transactions with Related Persons

Prior to this offering, we have not had a formal policy regarding approval of transactions with related parties. Prior to or in connection with this offering, we intend to adopt a written policy that our executive officers, directors, nominees for election as a director, beneficial owners of more than 5% of any class of our capital stock, and any members of the immediate family of any of the foregoing persons are not permitted to enter into a related party transaction with us without the prior consent of our board of directors. Any request for us to enter into a transaction with an executive officer, director, nominee for election as

44

Notes

No additional comments.

Share this page share link icon

a director, beneficial owner of more than 5% of any class of our capital stock, or any member of the immediate family of any of the foregoing persons, in which the amount involved exceeds $120,000 and such person would have a direct or indirect interest, must first be presented to our board of directors for review, consideration, and approval or ratification. In approving or rejecting any such proposal, our board of directors is to consider the relevant facts and circumstances of the transaction available to it, including, but not limited to, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances, and the extent of the related person’s interest in the transaction. The written policy will require that, in determining whether to approve or reject a related person transaction, our board of directors must consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, our best interests and those of our stockholders, as our board of directors determines in good faith.

45

Notes

No additional comments.

Share this page share link icon
To top
Left Menu Icon