Company: LIDRW
Filing Date: 2025-05-13
Form Type: DEFA14A
Source: 0000947871-25-000499
Chunk: 8

Company: AEye, Inc.
Filing Date: 2025-05-13
Form: DEFA14A
Chunk 8
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 adopted and implemented, our Board believes these proposals would have the practical effect of prohibiting the Company from raising further necessary capital to execute on its business plan and bring Apollo to market, ultimately risking bankruptcy and the loss of your investment in its entirety. Proposals 5 and 6 seek a similar goal to reduce the number of
authorized shares to 20 million or 125% of the currently outstanding shares, respectively.

As stated in the Board’s opposition to
Proposal 5, the Company could be in breach of certain obligations if Proposal 5 were adopted and implemented, as the Company is contractually
barred from reducing the number of authorized shares of common stock to 20,000,000, as the proposal requests. Proposal 6 would limit the
number of authorized shares to 125% of the fully diluted shares. Proposal 6, while differing in its specific approach, presents a similar
issue as Proposal 5. In order to commercialize its Apollo product, the Company recognizes that it will be necessary to raise additional
equity capital in the future. The reduced number of authorized shares under Proposal 5 or Proposal 6 may not be sufficient to continue
to meet the Company’s ongoing capital needs in the future. If either of these proposals were adopted, the Board may be unable to
raise the necessary capital in the future, without each time expending time and significant expense required to solicit stockholder approval
to increase the number of shares of common stock authorized. Many of the equity-based transactions that the Board has authorized in the
past had transaction structures and counterparty expectations that would have made it difficult or impossible to hold a stockholder meeting
prior to closing and, if such meeting were to have been held, would have jeopardized the transactions, as the execution of such financings
are often based on then-current market conditions. The Board recognized the need to move quickly in raising capital during favorable market
conditions, and in response, formed the Strategic Finance and M&A Committee in 2024 for the purpose of executing such transactions
expediently to take advantage of changing market conditions. The capital-raising transactions we have done to date and anticipate doing
in the future will require similar timing, which is incompatible with Proposals 5 and 6. Without the ability to quickly execute on such
transactions, we believe the Company will be unable to raise the required additional capital necessary on acceptable terms to implement
its business plans, raising the risk of bankruptcy and a loss of your entire investment.

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