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While  we  believe  these  decisions  are  consistent  with  the  Company  Purpose,  as  a  result  of  these  decisions,  we 
may  forgo  revenue,  customers,  or  growth  opportunities  that  a  corporation  managed  solely  to  maximize 
stockholder value might pursue.

Further,  while  directors  of  traditional  corporations  typically  have  a  fiduciary  duty  to  focus  on  maximizing 
stockholder value, directors of a PBC have a duty to consider not only the stockholders’ financial interests but 
also  the  company’s  specific  public  benefit  purpose  and  the  best  interests  of  those  stakeholders  materially 
affected by the company’s actions. Thus, our directors are not merely permitted, but obligated, to consider our 
Company  Purpose  and  the  interests  of  other  stakeholders.  Under  Delaware  law,  directors  are  shielded  from 
liability for breach of these obligations if they make informed and disinterested decisions that serve a rational 
purpose.  In  the  event  of  a  conflict  among  the  interests  of  our  stockholders,  our  Company  Purpose  or  the 
interests  of  our  other  stakeholders,  our  directors  must  only  make  informed  and  disinterested  decisions  that 
serve  a  rational  purpose;  thus,  we  cannot  guarantee  that  such  a  conflict  would  be  resolved  in  favor  of  our 
stockholders’ monetary interests, which could adversely affect our business, financial condition, and results of 
operations and cause the market price of our Class A common stock to decline. In addition, there is very limited 
judicial precedent interpreting the balancing requirement applicable to PBCs under Delaware law, particularly 
for companies with significant scale or visibility, or with a scope of PBC purpose similar to ours. As a result, the 
scope  of  directors’  obligations,  the  standards  by  which  their  decisions  may  be  reviewed,  and  the  nature  and 
availability  of  stockholder  remedies  in  connection  with  alleged  failures  to  responsibly  balance  these  interests 
remain uncertain. Future judicial interpretations of these provisions could be more expansive than we currently 
anticipate and could result in increased litigation risk, greater scrutiny of board decision-making, or outcomes 
that differ from our expectations. 

Additionally,  as  a  PBC,  we  are  less  vulnerable  to  an  unsolicited  takeover  effort  than  a  traditional  company 
would be and, therefore, your ability to realize your investment through an acquisition may be limited. We may 
also not be an attractive target for activists or hedge fund investors because new directors must consider and 
give  appropriate  weight  to  the  pecuniary  interests  of  our  stockholders,  the  best  interests  of  those  materially 
affected  by  our  conduct,  and  our  Company  Purpose,  and  stockholders  may  be  able  to  enforce  this  obligation 
through  litigation.  Further,  by  requiring  that  our  board  of  directors  consider  additional  stakeholders  and  our 
Company Purpose, and not just maximizing stockholder value, Delaware law could make it easier for our board 
of directors to reject a hostile bid, even where the acceptance of such a bid would provide the greatest short-
term financial yield to investors.

In  addition,  we  intend  to  direct  a  meaningful  portion  of  our  resources  toward  our  public  benefit  initiatives, 
which  may  include  contributions  to  nonprofit  organizations,  research  institutions,  underserved  communities, 
and other third parties that may not otherwise have access to frontier AI capabilities. These initiatives, which 
include the Initial Public Benefit Issuance and the future Public Benefit Issuances, have been, and may continue 
to  be,  substantial  in  scale,  and  we  expect  to  significantly  grow  these  efforts  over  time.  The  benefits  of  such 
expenditures may be difficult or impossible to measure in financial terms and may not result in any direct or 
measurable  benefit  to  our  business  or  our  stockholders.  The  amount  of  resources  directed  toward  these 
initiatives may, in any given period, reduce our revenue, increase our expenses, and could otherwise affect our 
results of operations. 

As  a  Delaware  public  benefit  corporation,  we  may  be  subject  to  increased  litigation 
concerning  our  board  of  directors’  obligation  to  balance  our  stockholders’  pecuniary 
interests,  the  best  interests  of  those  materially  affected  by  our  conduct  and  our  Company 
Purpose,  the  occurrence  of  which  may  have  an  adverse  impact  on  our  business,  financial 
condition, and results of operations. 

Section  367  of  the  DGCL  provides  that  stockholders  of  a  Delaware  PBC  with  shares  listed  on  a  national 
securities  exchange  may  only  file  an  action  to  enforce  the  statutory  balancing  requirement  imposed  on  the 
board of directors by the DGCL if they, individually or collectively, own the lesser of at least two percent of the 
corporation’s outstanding shares or shares of the corporation with a market value of at least $2,000,000 as of 
the  date  the  action  is  instituted  and,  in  the  case  of  a  derivative  action,  such  stockholders  satisfy  any  other 
conditions  applicable  to  filing  a  derivative  action.  This  potential  liability  for  enforcement  of  the  statutory 
balancing  requirement  does  not  exist  for  traditional  corporations.  Therefore,  we  may  be  subject  to  the 
possibility of increased litigation, which would require the attention of our management, and, as a result, may 
adversely affect our management’s ability to effectively execute our strategy. There is limited judicial precedent 

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