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THE COURT OF CHANCERY OF THE STATE OF DELAWARE
PETITION FOR RELIEF PURSUANT TO 8 DEL. C. 205
Ocugen, Inc. ("Ocugen" or the "Company"), by and through its undersigned counsel, brings this petition (the "Petition")
pursuant to 8 Del. C. 205 ("Section 205"), seeking to have this Court validate corporate acts and declare valid
purported putative stock, as follows:
Ocugen is a Delaware corporation focused on the development of biotechnologies. Due to the Company's large base of retail stockholders,
it has historically experienced low stockholder participation at its stockholder meetings. Indeed, the Company has had significant challenges
even reaching a quorum at its annual meetings. The rational apathy among retail stockholders, while not unique to Ocugen, has nevertheless
impeded its ability to take action to further the interests of all stockholders.
At its 2024 Annual Meeting, which was held on June 28, 2024, Ocugen submitted to stockholders a proposal to increase the number of
authorized shares of its common stock from 295,000,000 to 390,000,000 (the "Share Increase Proposal"). The
Company's board of directors (the "Board") unanimously approved the Share Increase Proposal, and recommended that
stockholders adopt it, to ensure that the Company had the flexibility to raise equity financing to execute on its business
plan and provide incentive compensation to attract, retain, and motivate executives and employees.
Under the Company's certificate of incorporation, approval of the Share Increase Proposal required the affirmative vote of the holders
of a majority in voting power of the outstanding shares of the capital stock of the Company entitled to vote generally in an election
of directors, voting together as a single class.
To address concerns about lack of voter participation, prior to the 2024 Annual Meeting, the Board pursued a course of action
designed to replicate the "votes cast" standard under Section 242(d) of the Delaware General Corporation Law (the
"DGCL") for approval of the Share Increase Proposal. The Board declared a dividend of one one-thousandth (1/1,000th) of
a share of Series C Preferred Stock for each outstanding share of common stock, payable to holders of common stock of record.
According to the Certificate of Designation of the Series C Preferred Stock (the "Certificate of Designation"), the
holders of the Series C Preferred Stock were entitled to 1,000,000 votes per whole share of such stock (i.e., 1,000 votes per
one one-thousandth of a share of Series C Preferred Stock) and, among other things, were entitled to vote with the common stock,
together as a single class, on the Share Increase Proposal. However, all shares of Series C Preferred Stock that were not present in
person or by proxy immediately prior to the opening of the polls at the 2024 Annual Meeting would be automatically redeemed by the
Company (the "Initial Redemption") prior to the vote on the Share Increase Proposal, such that they would not be counted
for quorum or voting purposes as a result of Section 160(c) of the DGCL.
5. Thus, the Series C Preferred Stock had the effect of amplifying the voting power of those stockholders participating and voting at the
2024 Annual Meeting, helping to ensure that the will of the stockholders who were sufficiently engaged with the Company would be respected.
6. In its preliminary proxy statement on Form 14A filed on May 17, 2024 and in its definitive proxy statement on Form 14A filed on May 28,
2025, the Company disclosed the operation and purpose of the Series C Preferred Stock, including its effect on the stockholders'
vote on the Share Increase Proposal. After receiving the vote of stockholders to approve the Share Increase Proposal, factoring in the
shares of common stock and Series C Preferred Stock entitled to vote thereon, the Company determined that the Share Increase Proposal
had been approved at the 2024 Annual Meeting. Subsequently, the Company filed a Certificate of Amendment to its Certificate of Incorporation,
increasing its authorized shares of common stock as provided by the Share Increase Proposal (the "Charter Amendment").
October 2024, approximately five months after the Company had disclosed the plan to create and issue the Series C Preferred Stock in
connection with the Share Increase Proposal, one of its stockholders submitted a letter to the Company questioning whether shares of
Series C Preferred Stock were entitled to vote on the Share Increase Proposal, observing that the Company's Certificate of Incorporation
required the holders of a "majority of the voting power of all of the then-outstanding shares of the capital stock of the Company
entitled to vote generally in the election of directors, voting together as a single class" to authorize amendments
thereto. The stockholder asserted that, because shares of Series C Preferred Stock were not specifically entitled to vote generally in
the election of directors, the votes associated with them could not be counted toward the approval or rejection of the Share Increase
The Company disputed the stockholder's construction of the Certificate of Incorporation. Nevertheless, to eliminate doubt regarding
the matter, in May 2025, the Company filed a Certificate of Correction to clarify and confirm the voting powers of the Series C Preferred
Stock, ensuring that the language used in the Certificate of Designation conformed to the corporate action taken.
In August 2025, the Company first issued additional shares of common stock that were the subject of the Share Increase Proposal in connection
with a private financing.
On October 23, 2025, a different stockholder (represented by the same law firm as the stockholder who raised an issue in October 2024)
filed a putative class action lawsuit against the Company in this Court, styled Prater v. Ocugen, Inc., C.A. No. 2025-1214-NAC
(Del. Ch.) (the "Stockholder Action"), alleging, among other things, that: (i) the Share Increase Proposal was not properly
approved because the Series C Preferred Stock was not authorized to vote generally in the election of directors; (ii) the Certificate
of Correction was invalid and ineffective; and (iii) as a result, the Company has issued putative stock.
After conferring with plaintiff's counsel in the Stockholder Action and in order to remove any uncertainty concerning the Share
Increase Proposal and the Company's subsequent share issuances, the Company determined to file this Section 205 petition requesting
the Court: (i) validate and declare the effectiveness of the Charter Amendment; and (ii) validate any shares of putative stock that may
have been issued in reliance on the Charter Amendment.
of these acts and stock is appropriate under Section 205. The Company believed in good faith that the Share Increase Proposal was
validly approved and has at all times treated the Charter Amendment as valid. The Company is aware of no harm that would arise from
validation but believes significant uncertainty and harm will arise if this Court declines to validate the effectiveness of the
Charter Amendment and any putative stock issued in reliance thereon.
Plaintiff in the Stockholder Action does not dispute that, under Delaware law and the Company's Certificate of Incorporation, Ocugen
possessed the power and authority to issue super-voting preferred stock, such as Series C Preferred Stock, entitled to vote on matters
such as the Share Increase Proposal, as the Company had intended. For this reason, Plaintiff does not oppose this petition or the relief
sought herein and, if granted, has agreed that such relief will moot the claims asserted in the Stockholder Action.
Charter and the Voting Threshold for Amendments Thereto
At the time of the 2024 Annual Meeting, the provisions governing the authorization and issuance of capital stock of the Company were
set forth in the Sixth Amended and Restated Certificate of Incorporation, as theretofore amended (the "Charter") (Ex. A).
Article IX of the Charter provided, in relevant part, that "the affirmative vote of the holders of a majority of the voting power
of all then-outstanding shares of the capital stock of the Corporation entitled to vote generally in all elections of directors," would
be required to adopt amendments thereto (the "Voting Threshold").
Quorum Challenges at Annual Meetings
As with many other companies with significant retail stockholder bases, the Company has faced challenges with stockholder participation,
to the point where it has struggled even to reach a quorum at its annual meetings. As a result, the Company has been impeded from taking
actions necessary for its welfare and the benefit of its stockholders.
By way of illustration, the Company was forced to adjourn its 2021 Annual Meeting after failing to establish a quorum; after numerous
costly solicitations, a quorum was narrowly achieved at the Company's 2022 Annual Meeting; and despite substantial solicitation
efforts, the Company was again forced to adjourn its 2023 Annual Meeting for lack of a quorum.
Share Increase Proposal and Voting Standard Proposal at the 2024 Annual Meeting
17. Prior to the 2024
Annual Meeting, the Company had 295,000,000 authorized shares of common stock. As of May 28, 2024, the Company had issued and
outstanding 257,354,466 shares of common stock, along with commitments to issue shares of common stock pursuant to outstanding
warrants, options, and Series B Preferred Stock, not to mention grants to be made under its equity incentive plans. Accordingly, the
Company had an acute need to increase the number of authorized shares of common stock. Given the commitments, the Company
functionally had no authorized common stock available for the equity financing transactions that would be required to execute on its
business plan or to award grants to attract, retain and incent officers and other employees.
address this pressing need, the Board discussed and unanimously approved an amendment to the Charter to increase the number of
authorized shares of common stock from 295,000,000 to 390,000,000 and submitted it to stockholders for their adoption at the 2024
Annual Meeting (i.e., the Share Increase Proposal).
Board also recommended a proposal, pursuant to 8 Del. C. 242(d), to alter the stockholder vote required for approval
of Charter amendments to implement certain stock splits and changes in the number of authorized shares, to the affirmative vote of a
majority of the votes cast (the "Voting Standard Proposal").
In addition, in an effort to address Ocugen's quorum challenges, the Board amended the Company's Bylaws, effective March
20, 2024, to reduce the quorum requirement from a majority of the outstanding voting power of the Company's outstanding stock to
one-third of the outstanding voting power of the Company's outstanding stock.
Company's Issuance of Series C Preferred Stock
To further address its stockholder participation issues and increase the likelihood of approval of the Share Increase Proposal and the
Voting Standard Proposal, on May 10, 2024, the Company declared a dividend to all holders of common stock as of the close of business
on May 20, 2024, in the form of one one-thousandth (1/1,000th) of a share of Series C Preferred Stock for each share
of the Company's common stock then outstanding.