UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

 

 

Filed by the Registrant  ☒                     Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

☐	Preliminary Proxy Statement

 

☐	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

☒	Definitive Proxy Statement

 

☐	Definitive Additional Materials

 

☐	Soliciting Material under §240.14a-12

VELODYNE LIDAR, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

☒	No fee required.

 

☐	Fee paid previously with preliminary materials.

 

☐	Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

 

 

MERGER, REVERSE STOCK SPLIT & SHARE ISSUANCE PROPOSALS—YOUR VOTE IS VERY IMPORTANT

Dear Stockholders:

On November 4, 2022, Ouster, Inc., which is referred to as Ouster, Velodyne Lidar, Inc., which is referred to as Velodyne, Oban Merger Sub, Inc., a direct, wholly-owned subsidiary of Ouster, which is referred to as Merger Sub I, and Oban Merger Sub II LLC, a direct, wholly-owned subsidiary of Ouster, which is referred to as Merger Sub II, entered into an Agreement and Plan of Merger, as it may be amended from time to time, which is referred to as the merger agreement, pursuant to which they agreed to combine their respective businesses in a merger of equals. We expect the combined company to help create a vibrant and healthy lidar industry by offering affordable, high-performance sensors to drive mass adoption across a wide variety of customer applications. Pursuant to the terms of the merger agreement, Merger Sub I will merge with and into Velodyne, which transaction is referred to as the first merger, with Velodyne as the surviving corporation in the first merger and as soon as practicable after the first merger and as the second step in a single integrated transaction with the first merger, Velodyne will merge with and into Merger Sub II, which transaction is referred to as the second merger, with Merger Sub II as the surviving company and a direct, wholly-owned subsidiary of Ouster. The first merger and the second merger together are referred to as the mergers. Unless and until the parties agree that the combined company should have a different name than what is currently set forth in the charter of Ouster, the combined company’s name will be “Ouster, Inc.”

Upon successful completion of the first merger, each issued and outstanding share of Velodyne common stock as of immediately prior to the completion of the first merger (other than shares owned by Velodyne, Ouster, Merger Sub I or Merger Sub II or any wholly owned subsidiary thereof (or that are held in treasury by Velodyne)) will be converted into the right to receive 0.8204 shares of Ouster common stock, which number is referred to as the exchange ratio, and cash in lieu of any fractional shares of Ouster common stock any former holder of Velodyne common stock would otherwise be entitled to receive. This exchange ratio is fixed and will not be adjusted for changes in the market price of either Ouster common stock or Velodyne common stock between the dates of signing of the merger agreement and completion of the mergers. Upon completion of the mergers, Ouster stockholders will continue to own their existing Ouster shares. Ouster stockholders will own approximately 50% and Velodyne stockholders will own approximately 50% of the issued and outstanding shares of the combined company (based on fully diluted shares outstanding of the combined company including equity awards) immediately following the completion of the mergers. Ouster common stock is traded on the New York Stock Exchange, which is referred to as the NYSE, under the symbol “OUST.” Velodyne common stock is traded on the Nasdaq Global Select Market, which is referred to as the Nasdaq, under the symbol “VLDR.” The common stock of the combined company is expected to be listed on the NYSE under the symbol “OUST.”

Ouster and Velodyne will each hold special meetings of their respective stockholders in connection with the proposed mergers, which are referred to as the Ouster special meeting and the Velodyne special meeting, respectively.

At the Ouster special meeting, Ouster stockholders will be asked to consider and vote on (1) the proposal to approve the issuance of shares of Ouster common stock to Velodyne equityholders pursuant to the merger agreement, which proposal is referred to as the Ouster share issuance proposal, (2) the proposal to approve an amendment to the Ouster charter to allow Ouster to have the option to effect a reverse stock split of Ouster common stock separate from and following the closing of the mergers, which proposal is referred to as the Ouster reverse stock split proposal and (3) the proposal to adjourn the Ouster special meeting to solicit additional proxies if there are not sufficient votes to approve the Ouster share issuance proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Ouster stockholders. The board of directors of Ouster unanimously recommends that Ouster stockholders vote “FOR” each of the proposals to be considered at the Ouster special meeting.

At the Velodyne special meeting, Velodyne stockholders will be asked to consider and vote on (1) the proposal to adopt the merger agreement, which is referred to as the Velodyne merger agreement proposal, (2) the proposal to approve, on a non-binding advisory basis, the compensation that will or may be paid to Velodyne’s named executive officers that is based on or otherwise relates to the transactions contemplated by the merger agreement and (3) the proposal to adjourn the Velodyne special meeting to solicit additional proxies if there are not sufficient votes to approve the Velodyne merger agreement proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Velodyne stockholders. The board of directors of Velodyne unanimously recommends that Velodyne stockholders vote “FOR” each of the proposals to be considered at the Velodyne special meeting.

The merger agreement requires, as a condition to closing of the mergers and the other transactions contemplated by the merger agreement, that Ouster stockholders approve the Ouster share issuance proposal and that Velodyne stockholders approve the Velodyne merger agreement proposal. Your vote on these matters, as well as other proposals, is very important, regardless of the number of shares you own. Whether or not you plan to attend your respective special meeting in person, please promptly mark, sign and date the accompanying proxy card and return it in the enclosed postage-paid envelope or authorize the individuals named on your proxy card to vote your shares by calling the toll-free telephone number or by using the Internet as described in the instructions included with your proxy card.

The accompanying joint proxy statement/prospectus provides you with important information about the special meetings, the mergers, and each of the proposals. We encourage you to read the entire document carefully, in particular the “Risk Factors” section beginning on page 24 of the accompanying joint proxy statement/prospectus for a discussion of risks relevant to the mergers.

We look forward to the successful completion of the mergers.

Sincerely,

 

Angus Pacala Chief Executive Officer and Co-Founder Ouster, Inc.				Theodore L. Tewksbury, Ph.D. Chief Executive Officer Velodyne Lidar, Inc.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of the mergers or the Ouster common stock to be issued in the mergers or determined if the accompanying joint proxy statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

The accompanying joint proxy statement/prospectus is dated December 8, 2022 and is first being mailed to the stockholders of Ouster on or about December 14, 2022 and to the stockholders of Velodyne on or about December 9, 2022.

Ouster, Inc.

350 Treat Avenue

San Francisco, California 94110

(415) 949-0108

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON JANUARY 26, 2023

To the Stockholders of Ouster, Inc.

Notice is hereby given that Ouster, Inc., which is referred to as Ouster, will hold a completely virtual special meeting of its stockholders, which is referred to as the Ouster special meeting, at the Ouster special meeting website, at www.virtualshareholdermeeting.com/OUST2023SM, on January 26, 2023, beginning at 9 a.m., Pacific Time, for the purpose of considering and voting on the following proposals:

(1) to approve the issuance of shares of Ouster common stock (including securities convertible into or exercisable for shares of Ouster common stock) to certain equityholders of Velodyne Lidar, Inc., which is referred to as Velodyne, pursuant to the Agreement and Plan of Merger, dated as of November 4, 2022 (as it may be amended from time to time), by and among Ouster, Oban Merger Sub, Inc., a wholly-owned subsidiary of Ouster, Oban Merger Sub II LLC, a wholly-owned subsidiary of Ouster, and Velodyne, which is referred to as the merger agreement, a copy of which is included as Annex A to the accompanying joint proxy statement/prospectus, which proposal is referred to as the Ouster share issuance proposal;

(2) to approve an amendment to the Ouster charter to allow Ouster, (a) to have the option to effect, separate from and following the closing of the mergers, or (b) if the merger agreement is terminated, to have the option to effect (i) a reverse stock split of Ouster common stock at one of six reverse stock split ratios, one-for-five, one-for-six, one-for-seven, one-for-eight, one-for-nine and one-for-ten, with an exact ratio to be determined by the board of the combined company following the closing or the Ouster board, as applicable, and (ii) if and when the reverse stock split is effected, a corresponding reduction in the number of authorized shares of Ouster common stock by the selected reverse stock split ratio, which is referred to as the Ouster authorized share reduction, in the form attached as Annex B to the accompanying joint proxy statement/prospectus, which proposal is referred to as the Ouster reverse stock split proposal (approval of which is not conditioned upon approval of the Ouster share issuance proposal or on completion of the mergers); and

(3) to approve the adjournment of the Ouster special meeting to solicit additional proxies if there are not sufficient votes at the time of the Ouster special meeting to approve the Ouster share issuance proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Ouster stockholders, which proposal is referred to as the Ouster adjournment proposal.

Ouster will transact no other business at the Ouster special meeting except such business as may properly be brought before the Ouster special meeting or any adjournment or postponement thereof. The accompanying joint proxy statement/prospectus, including the merger agreement attached thereto as Annex A, contains further information with respect to these matters.

Only holders of record of Ouster common stock at the close of business on December 13, 2022, the record date for notice of and voting at the Ouster special meeting, which is referred to as the Ouster record date, are entitled to notice of and to vote at the Ouster special meeting.

The board of directors of Ouster, which is referred to as the Ouster board of directors, has approved and declared advisable the merger agreement and the transactions contemplated by the merger agreement, including the Ouster share issuance proposal and the Ouster reverse stock split proposal, on the terms and subject to the conditions set forth in the merger agreement. The Ouster board of directors unanimously recommends that Ouster stockholders vote “FOR” the Ouster share issuance proposal, “FOR” the Ouster reverse stock split proposal and “FOR” the Ouster adjournment proposal.

Your vote is very important, regardless of the number of shares of Ouster common stock you own. The merger agreement requires, as a condition to closing of the mergers and the other transactions contemplated by the merger agreement, that Ouster stockholders approve the Ouster share issuance proposal. Assuming a quorum is present, the approval of the Ouster share issuance proposal requires the affirmative vote of the holders of a majority in voting power of the votes cast at the Ouster special meeting on the Ouster share issuance proposal.

A complete list of Ouster stockholders as of the record date will be open to the examination of any Ouster stockholder at Ouster’s principal executive offices at 350 Treat Avenue, San Francisco, California for a period of 10 days prior to the Ouster special meeting. This list of stockholders will also be available on the bottom panel of your screen during the meeting after entering the 16-digit control number included on the proxy card that you received, or on the materials provided by your bank or broker.

Whether or not you plan to attend the Ouster special meeting electronically, Ouster urges you to please promptly mark, sign and date the accompanying proxy card and return it in the enclosed postage-paid envelope, call the toll-free telephone number or use the Internet as described in the instructions included with the proxy card, so that your shares may be represented and voted at the Ouster special meeting. To participate electronically in the Ouster special meeting, you will need the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials. The meeting webcast will begin promptly at 9 a.m., Pacific Time. If your shares are held in street name through a bank, broker or other nominee, you will receive instructions on how to vote from the bank or broker. You must follow their instructions in order for your shares to be voted. Internet and telephone voting also may be offered to stockholders owning shares through certain banks and brokers. If your shares are not registered in your own name and you would like to vote your shares at the Ouster special meeting, you may visit www.virtualshareholdermeeting.com/OUST2023SM and enter the 16-digit control number included in the voting instruction card provided to you by your bank or brokerage firm. If you hold your shares in street name and you do not receive a 16-digit control number, you may need to log in to your bank or brokerage firm’s website and select the shareholder communications mailbox to access the meeting and vote. Instructions should also be provided on the voting instruction card provided by your bank or brokerage firm. The use of video, still photography or audio recording at the Ouster special meeting is not permitted. If you have any questions about the mergers or how to vote or direct a vote in respect of your shares of Ouster common stock, you may contact our proxy solicitor, MacKenzie Partners, Inc., at (212) 929-5500 (Call Collect) or (800) 322-2885 (Call Toll-Free).

 

By Order of the Ouster Board of Directors,

Angus Pacala Chief Executive Officer and Co-Founder

San Francisco, CA

Dated: December 14, 2022

 

 

Velodyne Lidar, Inc.

5521 Hellyer Avenue

San Jose, CA 95138

(669) 275 2251

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON JANUARY 26, 2023

To the Stockholders of Velodyne Lidar, Inc.

Notice is hereby given that Velodyne Lidar, Inc., which is referred to as Velodyne, will hold a special meeting of its stockholders, which is referred to as the Velodyne special meeting, at 5521 Hellyer Avenue, San Jose, CA 95138, on January 26, 2023, beginning at 9 a.m., Pacific Time, for the purpose of considering and voting on the following proposals:

(1) to adopt the Agreement and Plan of Merger, dated November 4, 2022 (as it may be amended from time to time), by and among Ouster, Inc., referred to as “Ouster”, Oban Merger Sub, Inc., a wholly owned subsidiary of Ouster, Oban Merger Sub II LLC, a wholly owned subsidiary of Ouster, and Velodyne, which is referred to as the merger agreement, a copy of which is included as Annex A to the accompanying joint proxy statement/prospectus, which proposal is referred to as the Velodyne merger agreement proposal;

(2) to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Velodyne’s named executive officers that is based on or otherwise relates to the transactions contemplated by the merger agreement, which proposal is referred to as the Velodyne compensation proposal; and

(3) to approve the adjournment of the Velodyne special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Velodyne special meeting to approve the Velodyne merger agreement proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Velodyne stockholders, which proposal is referred to as the Velodyne adjournment proposal.

Velodyne will transact no other business at the Velodyne special meeting except such business as may properly be brought before the Velodyne special meeting or any adjournment or postponement thereof. The accompanying joint proxy statement/prospectus, including the merger agreement attached thereto as Annex A, contains further information with respect to these matters.

Only holders of record of Velodyne common stock at the close of business on December 5, 2022, the record date for notice of and voting at the Velodyne special meeting, which is referred to as the Velodyne record date, are entitled to notice of and to vote at the Velodyne special meeting.

The board of directors of Velodyne, which is referred to as the Velodyne board of directors, has unanimously determined that the merger of Merger Sub I with and into Velodyne and the subsequent merger of Velodyne with and into Merger Sub II, which are referred to as the “mergers”, are fair to and in the best interests of Velodyne and its stockholders, and approved and declared advisable the merger agreement and the transactions contemplated by the merger agreement, including the mergers, on the terms and subject to the conditions set forth in the merger agreement. The Velodyne board of directors unanimously recommends that Velodyne stockholders vote “FOR” the Velodyne merger agreement proposal, “FOR” the Velodyne compensation proposal and “FOR” the Velodyne adjournment proposal.

Your vote is very important, regardless of the number of shares of Velodyne common stock you own. The merger agreement requires, as a condition to closing of the mergers and the other transactions contemplated by the merger agreement, that Velodyne stockholders approve the Velodyne merger agreement proposal. Assuming a quorum is present at the Velodyne special meeting, the approval of the Velodyne merger agreement proposal requires the affirmative vote of the holders of a majority of the issued and outstanding shares of Velodyne common stock entitled to vote at the Velodyne special meeting on the Velodyne merger agreement proposal.

Whether or not you plan to attend the Velodyne special meeting in person, Velodyne urges you to please promptly mark, sign and date the accompanying proxy card and return it in the enclosed postage-paid envelope, call the toll-free telephone number or use the Internet as described in the instructions included with the proxy card, so that your shares may be represented and voted at the Velodyne special meeting. If you hold your shares through a broker, bank or other nominee in “street name” (instead of as a registered holder) and you wish to vote in person at the Velodyne special meeting, you must obtain a legal proxy from your bank, broker or other nominee and bring the legal proxy to the meeting in order to vote in person at the Velodyne special meeting. You will need to bring identification along with either your notice of special meeting or proof of stock ownership to enter the Velodyne special meeting. The use of video, still photography or audio recording at the Velodyne special meeting is not permitted. For the safety of attendees, all bags, packages and briefcases are subject to inspection. If you have any questions about the mergers or how to vote or direct a vote in respect of your shares of Velodyne common stock, you may contact our proxy solicitor, Kingsdale Advisors, at (646)-851-2790 (Call Collect) or (877)-659-1821 (Call Toll-Free).

 

By Order of the Velodyne Board of Directors,

Ted Tewksbury Chief Executive Officer

San Jose, CA

Dated: December 8, 2022

 

REFERENCES TO ADDITIONAL INFORMATION

This joint proxy statement/prospectus incorporates important business and financial information about Ouster, Inc., which is referred to as Ouster, and Velodyne Lidar, Inc., which is referred to as Velodyne, from other documents that Ouster and Velodyne have filed with the U.S. Securities and Exchange Commission, which is referred to as the SEC, and that are contained in or incorporated by reference into this joint proxy statement/prospectus. For a listing of documents incorporated by reference into this joint proxy statement/prospectus, please see the section entitled “Where You Can Find More Information” of this joint proxy statement/prospectus. This information is available for you free of charge to review through the SEC’s website at www.sec.gov.

Any person may request a copy of this joint proxy statement/prospectus and any of the documents incorporated by reference into this joint proxy statement/prospectus or other information concerning Ouster or Velodyne, without charge, by written or telephonic request directed to the appropriate company or its proxy solicitor at the following contacts:

 

For Ouster stockholders: Ouster, Inc. 350 Treat Avenue San Francisco, California 94110 (415) 949-0108 Attention: Corporate Secretary		For Velodyne stockholders: Velodyne Lidar, Inc. 5521 Hellyer Avenue San Jose, California 95138 (669) 275-2251 Attention: Corporate Secretary
MacKenzie Partners, Inc. 1407 Broadway, 27th Floor New York, New York 10018 (212) 929-5500 (Call Collect) Call Toll-Free: (800) 322-2885 proxy@mackenziepartners.com		Kingsdale Advisors 745 Fifth Avenue, 5th Floor New York, New York 10151 (646)-851-2790 (Call Collect) Call Toll-Free: (877)-659-1821 contactus@kingsdaleadvisors.com

In order for you to receive timely delivery of the documents in advance of the special meeting of Ouster stockholders to be held on January 26, 2023, which is referred to as the Ouster special meeting, or the special meeting of Velodyne stockholders to be held on January 26, 2023, which is referred to as the Velodyne special meeting, as applicable, you must request the information no later than seven calendar days prior to the applicable special meeting.

The contents of the websites of the SEC, Ouster, Velodyne or any other entity are not being incorporated into this joint proxy statement/prospectus. The information about how you can obtain certain documents that are incorporated by reference into this joint proxy statement/prospectus at these websites is being provided only for your convenience.

 

i

ABOUT THIS JOINT PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form S-4 filed with the SEC by Ouster, constitutes a prospectus of Ouster under Section 5 of the Securities Act of 1933, as amended, which is referred to as the Securities Act, with respect to the shares of common stock of Ouster to be issued to Velodyne stockholders pursuant to the Agreement and Plan of Merger, dated as of November 4, 2022 (as it may be amended from time to time), by and among Ouster, Velodyne, Merger Sub I and Merger Sub II, which is referred to as the merger agreement. This document also constitutes a joint proxy statement of Ouster and Velodyne under Section 14(a) of the Securities Exchange Act of 1934, as amended, which is referred to as the Exchange Act. It also constitutes a notice of meeting with respect to the Ouster special meeting and a notice of meeting with respect to the Velodyne special meeting.

Ouster has supplied all information contained or incorporated by reference into this joint proxy statement/prospectus relating to Ouster, and Velodyne has supplied all such information relating to Velodyne. Ouster and Velodyne have both contributed to the information related to the mergers contained in this joint proxy statement/prospectus.

You should rely only on the information contained in or incorporated by reference into this joint proxy statement/prospectus. Ouster and Velodyne have not authorized anyone to provide you with information that is different from that contained in or incorporated by reference into this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated December 8, 2022, and you should not assume that the information contained in this joint proxy statement/prospectus is accurate as of any date other than such date unless otherwise specifically provided herein.

Further, you should not assume that the information incorporated by reference into this joint proxy statement/prospectus is accurate as of any date other than the date of the incorporated document. Neither the mailing of this joint proxy statement/prospectus to Ouster stockholders or Velodyne stockholders nor the issuance by Ouster of shares of its common stock pursuant to the merger agreement will create any implication to the contrary.

This joint proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.

Unless otherwise indicated or the context otherwise requires, when used in this joint proxy statement/prospectus:

 

•

“Barclays” refers to Barclays Capital, Inc., financial advisor to Ouster in connection with the mergers;

 

•

“BofA Securities” refers to BofA Securities, Inc., financial advisor to Velodyne in connection with the mergers;

 

•

“business day” refers to any day other than a Saturday, a Sunday or a day on which banking institutions in New York, New York are authorized or obligated by law or executive order to close;

 

•

“Code” refers to the Internal Revenue Code of 1986, as amended;

 

•

“combined company” refers to Ouster following the completion of the mergers;

 

•

“DGCL” refers to the General Corporation Law of the State of Delaware;

 

•

“effective time” refers to the date and time when the first merger becomes effective under the DGCL, which will be the date and time at which the certificate of merger with respect to the first merger is filed with the Secretary of State of the State of Delaware, or such other time as may be mutually agreed to by Ouster and Velodyne and specified in the applicable certificate of merger;

 

ii

•

“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

 

•

“Exchange Agent” refers to Continental Stock Transfer & Trust Company, N.A.;

 

•

“exchange ratio” refers to 0.8204 of a fully-paid and nonassessable share of Ouster common stock;

 

•

“first merger” refers to the merger of Merger Sub I with and into Velodyne, with Velodyne continuing its existence under the laws of the State of Delaware as the surviving corporation;

 

•

“GAAP” refers to U.S. generally accepted accounting principles;

 

•

“HSR Act” refers to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;

 

•

“mergers” refers to the first merger and second merger, collectively;

 

•

“merger agreement” refers to the Agreement and Plan of Merger, dated as of November 4, 2022, as it may be amended from time to time, by and among Ouster, Velodyne, Merger Sub I and Merger Sub II;

 

•

“merger consideration” refers to the consideration that a Velodyne stockholder is entitled to receive in exchange for such Velodyne stockholder’s shares of Velodyne common stock in connection with the mergers;

 

•

“Merger Sub I” refers to Oban Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Ouster, formed for the purpose of effecting the mergers;

 

•

“Merger Sub II” refers to Oban Merger Sub II LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of Ouster, formed for the purpose of effecting the mergers;

 

•

“Nasdaq” refers to the Nasdaq Global Select Market;

 

•

“NYSE” refers to the New York Stock Exchange;

 

•

“Ouster” refers to Ouster, Inc., a Delaware corporation;

 

•

“Ouster adjournment proposal” refers to the proposal for Ouster stockholders to approve the adjournment of the Ouster special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Ouster special meeting to approve the Ouster share issuance proposal;

 

•

“Ouster board of directors” refers to the board of directors of Ouster;

 

•

“Ouster bylaws” refers to the bylaws of Ouster;

 

•

“Ouster charter” refers to the certificate of incorporation of Ouster;

 

•

“Ouster common stock” refers to the common stock, par value $0.0001 per share, of Ouster;

 

•

“Ouster record date” refers to December 13, 2022;

 

•

“Ouster reverse stock split proposal” refers to a proposal for Ouster stockholders to approve an amendment to the Ouster charter to allow Ouster to have the option to effect, separate from and following the closing of the mergers, (a) a reverse stock split of Ouster common stock at one of six reverse stock split ratios, one-for-five, one-for-six, one-for-seven, one-for-eight, one-for-nine and one-for-ten, with an exact ratio to be determined by the board of the combined company following the closing, and (b) if and when the reverse stock split is effected, a corresponding reduction in the number of authorized shares of Ouster common stock by the selected reverse stock split ratio, in the form attached as Annex B to the accompanying joint proxy statement/prospectus;

 

•

“Ouster share issuance proposal” refers to the proposal for Ouster stockholders to approve the issuance of shares of Ouster common stock to Velodyne equityholders in connection with the mergers;

 

•

“Ouster special meeting” refers to the special meeting of Ouster stockholders to consider and vote upon the Ouster share issuance proposal, the Ouster reverse stock split proposal and the Ouster adjournment proposal;

 

iii

•

“Ouster special meeting website” refers to the website that Ouster stockholders can visit to attend and vote at the Ouster special meeting, accessible at the following web address: www.virtualshareholdermeeting.com/OUST2023SM;

 

•

“Ouster stockholders” refers to holders of Ouster common stock;

 

•

“SEC” refers to the U.S. Securities and Exchange Commission;

 

•

“second merger” refers to the merger of Velodyne with and into Merger Sub II, with Merger Sub II continuing in existence under the laws of the State of Delaware as the surviving company;

 

•

“Securities Act” refers to the Securities Act of 1933, as amended;

 

•

“Velodyne” refers to Velodyne Lidar, Inc., a Delaware corporation;

 

•

“Velodyne adjournment proposal” refers to the proposal for Velodyne stockholders to approve the adjournment of the Velodyne special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Velodyne special meeting to approve the Velodyne merger agreement proposal;

 

•

“Velodyne board of directors” refers to the board of directors of Velodyne;

 

•

“Velodyne board recommendation” refers to the unanimous recommendation of the Velodyne board of directors for Velodyne stockholders to approve the Velodyne merger agreement proposal;

 

•

“Velodyne bylaws” refers to the amended and restated bylaws of Velodyne;

 

•

“Velodyne charter” refers to the amended and restated certificate of incorporation of Velodyne;

 

•

“Velodyne common stock” refers to the common stock, par value $0.0001 per share, of Velodyne;

 

•

“Velodyne compensation proposal” refers to the proposal to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Velodyne named executive officers that is based on or otherwise relates to the transactions contemplated by the merger agreement;

 

•

“Velodyne merger agreement proposal” refers to the proposal for Velodyne Stockholders to adopt the Merger Agreement and the transactions contemplated thereby, including the mergers;

 

•

“Velodyne record date” refers to December 5, 2022;

 

•

“Velodyne special meeting” refers to the special meeting of Velodyne stockholders to consider and vote upon the Velodyne merger agreement proposal, the Velodyne compensation proposal and the Velodyne adjournment proposal; and

 

•

“Velodyne stockholders” refers to holders of Velodyne common stock.

 

iv

TABLE OF CONTENTS

 

REFERENCES TO ADDITIONAL INFORMATION			i
ABOUT THIS JOINT PROXY STATEMENT/PROSPECTUS			ii
QUESTIONS AND ANSWERS			1
SUMMARY			1
The Parties to the Mergers			1
The Mergers and the Merger Agreement			1
Exchange Ratio			2
Treatment of Existing Ouster Equity Awards			2
Treatment of Existing Velodyne Equity Awards			2
Ouster’s Recommendation and Reasons for the Mergers			3
Velodyne’s Recommendation and Reasons for the Mergers			4
Opinion of Barclays, Ouster’s Financial Advisor			5
Opinion of BofA Securities, Velodyne’s Financial Advisor			5
The Ouster Special Meeting			6
The Velodyne Special Meeting			6
Interests of Ouster’s Directors and Executive Officers in the Mergers			7
Interests of Velodyne’s Directors and Executive Officers in the Mergers			8
Governance of the Combined Company			8
Certain Beneficial Owners of Ouster Common Stock			9
Certain Beneficial Owners of Velodyne Common Stock			9
Regulatory Approvals			10
Ownership of the Combined Company after the Mergers			10
No Appraisal Rights			10
Conditions to the Completion of the Mergers			10
No Solicitation of Competing Proposals			11
No Change of Recommendation			12
Termination of the Merger Agreement			13
Termination Fees			14
Voting and Support Agreement			15
Accounting Treatment			17
Certain Tax Matters			17
Comparison of Stockholders’ Rights			17
Listing of Ouster Common Stock; Delisting and Deregistration of Velodyne Common Stock			17
Risk Factors			18
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION			19
COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA			20
COMPARISON OF OUSTER AND VELODYNE MARKET PRICES AND IMPLIED VALUE OF MERGER CONSIDERATION			21
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			22
RISK FACTORS			24
Risks Relating to the Mergers			24
Risks Relating to the Proposed Reverse Stock Split			30
Risks Relating to the Combined Company			31
Risks Relating to Ouster’s Business			35
Risks Relating to Velodyne’s Business			35
THE PARTIES TO THE MERGERS			36
Ouster, Inc.			36
Oban Merger Sub, Inc.			36
Oban Merger Sub II LLC			36
Velodyne Lidar, Inc.			36

 

i

THE OUSTER SPECIAL MEETING			38
Date, Time and Place of the Ouster Special Meeting			38
Matters to be Considered at the Ouster Special Meeting			38
Recommendation of the Ouster Board of Directors			38
Record Date for the Ouster Special Meeting and Voting Rights			39
Quorum; Abstentions and Broker Non-Votes			39
Required Votes; Vote of Ouster’s Directors and Executive Officers			40
Methods of Voting			41
Revocability of Proxies			42
Proxy Solicitation Costs			42
Attending the Ouster Special Meeting			43
Householding			43
Tabulation of Votes			43
Adjournments			43
Assistance			44
OUSTER PROPOSAL #1: OUSTER SHARE ISSUANCE			45
OUSTER PROPOSAL #2: OUSTER REVERSE STOCK SPLIT PROPOSAL			46
U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT			48
OUSTER PROPOSAL #3: ADJOURNMENT OF THE OUSTER SPECIAL MEETING			50
THE VELODYNE SPECIAL MEETING			51
Date, Time and Place of the Velodyne Special Meeting			51
Matters to be Considered at the Velodyne Special Meeting			51
Recommendation of the Velodyne Board of Directors			51
Record Date for the Velodyne Special Meeting and Voting Rights			52
Quorum; Abstentions and Broker Non-Votes			52
Required Votes; Vote of Velodyne’s Directors and Executive Officers			53
Methods of Voting			53
Revocability of Proxies			54
Proxy Solicitation Costs			55
Attending the Velodyne Special Meeting			55
Householding			56
Tabulation of Votes			56
Adjournments			56
Assistance			56
VELODYNE PROPOSAL #1: VELODYNE MERGER AGREEMENT PROPOSAL			58
VELODYNE PROPOSAL #2: VELODYNE COMPENSATION PROPOSAL			59
VELODYNE PROPOSAL #3: VELODYNE ADJOURNMENT PROPOSAL			60
THE MERGERS			61
General			61
Exchange Ratio			61
Background of the Mergers			62
Recommendation of the Ouster Board of Directors; Ouster’s Reasons for the Mergers			73
Recommendation of the Velodyne Board of Directors; Velodyne’s Reasons for the Mergers			77
Opinion of Barclays, Ouster’s Financial Advisor			82
Opinion of BofA Securities, Velodyne’s Financial Advisor			88
Certain Financial Forecasts Utilized in Connection with the Mergers			96
Closing and Effective Time of the Mergers			101
Regulatory Approvals			102
Ownership of the Combined Company After the Mergers			102
Governance of the Combined Company			102
U.S. Federal Securities Law Consequences			103
Accounting Treatment			103

 

ii

Exchange of Shares			103
Market Listing			104
Delisting and Deregistration of Velodyne Common Stock			104
Litigation between Ouster and Velodyne			104
Litigation Relating to the Mergers			104
THE MERGER AGREEMENT			105
Explanatory Note Regarding the Merger Agreement			105
Structure of the Mergers			105
Completion and Effectiveness of the Mergers			106
Merger Consideration			106
Treatment of Velodyne Equity Awards			107
Exchange of Shares			107
Dividends and Distributions with Respect to Unexchanged Shares of Velodyne Common Stock			108
Treatment of Fractional Shares			108
Termination of the Exchange Fund			108
Withholding Rights			109
Adjustments to Prevent Dilution			109
Governance Matters			109
Representations and Warranties			109
Conduct of Business Prior to the Effective Time			112
No Solicitation of Competing Proposals			114
Notice Regarding Competing Proposals			116
No Change of Recommendation			116
Existing Discussions			118
Special Meetings			118
Cooperation; Efforts to Consummate			119
Status and Notifications			120
Access to Information			120
NYSE Listing; Nasdaq Delisting			121
Publicity			121
Employee Benefits Matters			121
Expenses			122
Directors’ and Officers’ Insurance and Indemnification			122
Litigation			123
Conditions to the Completion of the Mergers			124
Termination of the Merger Agreement			125
Termination Fees			126
Amendment			127
Waiver			128
Specific Performance			128
Third-Party Beneficiaries			128
THE ANCILLARY AGREEMENTS			129
Ouster Voting and Support Agreement			129
Velodyne Voting and Support Agreement			130
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION			133
Notes to the Unaudited Pro Forma Condensed Combined Financial Information			138
INTERESTS OF OUSTER’S DIRECTORS AND EXECUTIVE OFFICERS IN THE MERGERS			142
Executive Officers			142
Ouster Change in Control			142
INTERESTS OF VELODYNE’S DIRECTORS AND EXECUTIVE OFFICERS IN THE MERGERS			146
Executive Officers			146
Velodyne Change in Control			146

 

iii

U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGERS			152
U.S. Federal Income Tax Consequences of the Mergers to U.S. Holders of Velodyne Common Stock			153
COMPARISON OF STOCKHOLDERS’ RIGHTS			155
NO APPRAISAL RIGHTS			170
LEGAL MATTERS			171
EXPERTS			172
CERTAIN BENEFICIAL OWNERS OF OUSTER COMMON STOCK			173
Security Ownership of Ouster Directors and Executive Officers			173
Security Ownership of Other Beneficial Owners			174
CERTAIN BENEFICIAL OWNERS OF VELODYNE COMMON STOCK			176
Security Ownership of Velodyne Directors and Executive Officers			176
Security Ownership of Other Beneficial Owners			177
STOCKHOLDER PROPOSALS			179
Ouster			179
Velodyne			179
HOUSEHOLDING OF PROXY MATERIALS			180
WHERE YOU CAN FIND MORE INFORMATION			181
Ouster (SEC File No.  001-39463)			181
Velodyne (SEC File No.  001-38703)			182
ANNEX A: Agreement and Plan of Merger			A-1
ANNEX B: Form of Ouster Certificate of Amendment			B-1
ANNEX C: Bylaws of Ouster			C-1
ANNEX D: Form of Ouster Voting and Support Agreement			D-1
ANNEX E: Form of Velodyne Voting and Support Agreement			E-1
ANNEX F: Opinion of Barclays Capital Inc.			F-1
ANNEX G: Opinion of BofA Securities, Inc.			G-1

 

iv

QUESTIONS AND ANSWERS

The following are some questions that you, as a stockholder of Ouster or a stockholder of Velodyne, may have regarding the mergers and the other matters being considered at the special meetings of each company’s stockholders, and brief answers to those questions. You are urged to carefully read this joint proxy statement/prospectus and the other documents referred to in this joint proxy statement/prospectus in their entirety because this section may not provide all the information that is important to you regarding these matters. Additional important information is contained in the annexes to, and the documents incorporated by reference into, this joint proxy statement/prospectus. You may obtain the information incorporated by reference in this joint proxy statement/prospectus, without charge, by following the instructions under the section entitled “Where You Can Find More Information” of this joint proxy statement/prospectus.

 

Q:	Why am I receiving this joint proxy statement/prospectus?

 

A:

You are receiving this joint proxy statement/prospectus because Ouster, Inc., which is referred to as Ouster, and Velodyne Lidar, Inc., which is referred to as Velodyne, have agreed to combine their companies in a merger of equals structured through (i) the merger of Oban Merger Sub, Inc., a wholly-owned subsidiary of Ouster, which is referred to as Merger Sub I, with and into Velodyne, resulting in Velodyne as the surviving corporation and a wholly-owned subsidiary of Ouster, and (ii) as soon as practicable after the first merger and as the second step in a single integrated transaction with the first merger, a merger of Velodyne with and into Oban Merger Sub II LLC, a wholly-owned subsidiary of Velodyne, which is referred to as Merger Sub II, resulting in Merger Sub II as the surviving company. The Agreement and Plan of Merger, dated as of November 4, 2022 (as it may be amended from time to time), which is referred to as the merger agreement, governs the terms of the business combination and mergers of (i) Velodyne and Merger Sub I and (ii) Velodyne and Merger Sub II, which are referred to as the mergers, and is attached to this joint proxy statement/prospectus as Annex A.

In order to complete the mergers, among other things:

 

•

Ouster stockholders must approve the issuance of shares of Ouster common stock (including securities convertible into or exercisable for shares of Ouster common stock) in connection with the mergers, which is referred to as the Ouster share issuance proposal; and

 

•

Velodyne stockholders must adopt the merger agreement in accordance with the DGCL, which is referred to as the Velodyne merger agreement proposal.

Ouster is holding a special meeting of its stockholders, which is referred to as the Ouster special meeting, to obtain approval of the Ouster share issuance proposal. Ouster stockholders will also be asked to approve (i) an amendment to the Ouster charter to allow Ouster, (a) to have the option to effect, separate from and following the closing of the mergers or (b) if the merger agreement is terminated, to have the option to effect, (1) a reverse stock split of Ouster common stock at one of six reverse stock split ratios, one-for-five, one-for-six, one-for-seven, one-for-eight, one-for-nine and one-for-ten, with an exact ratio to be determined by the board of the combined company following the closing or the Ouster board, as applicable, and (2) if and when the reverse stock split is effected, a corresponding reduction in the number of authorized shares of Ouster common stock by the selected reverse stock split ratio, in the form attached to this joint proxy statement/prospectus as Annex B, which proposal is referred to as the Ouster reverse stock split proposal and (ii) the proposal to adjourn the Ouster special meeting to solicit additional proxies if there are not sufficient votes at the time of the Ouster special meeting to approve the Ouster share issuance proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to Ouster stockholders, which proposal is referred to as the Ouster adjournment proposal (approval of which is not conditioned upon approval of the Ouster share issuance proposal or on completion of the mergers).

Velodyne is holding a special meeting of its stockholders, which is referred to as the Velodyne special meeting, to obtain approval of the Velodyne merger agreement proposal. Velodyne stockholders will also be

 

1

asked to approve (i) on a non-binding advisory basis, the compensation that may be paid or become payable to Velodyne’s named executive officers that is based on or otherwise relates to the transactions contemplated by the merger agreement, which proposal is referred to as the Velodyne compensation proposal and (ii) the proposal to adjourn the Velodyne special meeting to solicit additional proxies if there are not sufficient votes at the time of the Velodyne special meeting to approve the Velodyne merger agreement proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to Velodyne stockholders, which proposal is referred to as the Velodyne adjournment proposal.

Your vote is very important, regardless of the number of shares that you own. The approval of the Ouster share issuance proposal and the approval of the Velodyne merger agreement proposal are conditions to the obligations of Ouster and Velodyne to complete the mergers. None of the approvals of the Ouster reverse stock split proposal, the Velodyne compensation proposal, the Ouster adjournment proposal or the Velodyne adjournment proposal are conditions to the obligations of Ouster or Velodyne to complete the mergers.

 

Q:	When and where will each of the special meetings take place?

 

A:	The Ouster special meeting will be held completely virtually on the Ouster special meeting website, at www.virtualshareholdermeeting.com/OUST2023SM, on January 26, 2023 at 9 a.m., Pacific Time.

The Velodyne special meeting will be held at 5521 Hellyer Avenue, San Jose, CA 95138, on January 26, 2023 at 9 a.m., Pacific Time.

To participate in the Ouster special meeting, you will need the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials. The meeting webcast will begin promptly at 9 a.m., Pacific Time. We encourage you to access the meeting prior to the start time. Online check-in will begin at 8:45 a.m., Pacific Time, and you should allow ample time for check-in procedures. If you hold your shares through a bank or broker, instructions should also be provided on the voting instruction card provided by your bank or brokerage firm. If you lose your 16-digit control number, you may join the Ouster special meeting as a “Guest,” but you will not be able to vote, ask questions, or access the list of stockholders as of the record date.

For Velodyne stockholders, if you choose to vote your shares in person at the Velodyne special meeting, please bring required documentation in accordance with the section entitled “The Velodyne Special Meeting—Attending the Velodyne Special Meeting” of this joint proxy statement/prospectus, with respect to the Velodyne special meeting. The use of video, still photography or audio recording at the Velodyne special meeting is not permitted. For the safety of in-person attendees at the Velodyne special meeting, all bags, packages and briefcases are subject to inspection.

Even if you plan to attend or virtually attend your company’s special meeting, Ouster and Velodyne recommend that you vote your shares in advance as described below so that your vote will be counted if you later decide not to or become unable to attend the applicable special meeting. With respect to the Velodyne special meeting, shares held in “street name” may be voted in person by you only if you obtain a signed legal proxy from your bank, broker or other nominee giving you the right to vote the shares.

 

Q:	Does my vote matter?

 

A:	Yes, your vote is very important, regardless of the number of shares that you own. The mergers cannot be completed unless Velodyne stockholders adopt and approve the merger agreement and Ouster stockholders approve the Ouster share issuance proposal.

For Ouster stockholders, if you do not return or submit your proxy or vote at the special meeting as provided in this joint proxy statement/prospectus, it will have no effect on the Ouster share issuance proposal or the Ouster adjournment proposal. If you are a record holder of Ouster’s common stock and do not return or submit your proxy or vote at the special meeting as provided in this joint proxy statement/prospectus, it will have the same effect as a vote “AGAINST” the Ouster reverse stock split proposal. The board of directors of Ouster, which is referred to as the Ouster board of directors, unanimously recommends that you vote “FOR” the Ouster share issuance proposal, “FOR” the Ouster reverse stock split proposal and “FOR” the Ouster adjournment proposal.

 

2

For Velodyne stockholders, if you do not return or submit your proxy or vote at the special meeting as provided in this joint proxy statement/prospectus, the effect will be the same as a vote “AGAINST” the Velodyne merger agreement proposal, and will have no effect on the Velodyne compensation proposal or the Velodyne adjournment proposal. The board of directors of Velodyne, which is referred to as the Velodyne board of directors, unanimously recommends that you vote “FOR” the Velodyne merger agreement proposal, “FOR” the Velodyne compensation proposal and “FOR” the Velodyne adjournment proposal.

 

Q:	What will I receive if the mergers are completed?

 

A:

If the mergers are completed, each share of Velodyne common stock issued and outstanding immediately prior to the effective time (other than shares owned directly by Ouster, Velodyne, Merger Sub I or Merger Sub II or any wholly owned subsidiary thereof (or that are held in treasury by Velodyne)) will be converted into the right to receive 0.8204 shares of Ouster common stock, which we refer to as the exchange ratio. Each Velodyne stockholder will receive cash for any fractional shares of Ouster common stock that such stockholder would otherwise receive in the first merger. Any cash amounts to be received by a Velodyne stockholder in respect of fractional shares shall be equal to the product of (i) the aggregate proceeds from the sale by the Exchange Agent of the excess shares and (ii) a fraction, the numerator of which is the amount of the fractional share interest to which such holder of Velodyne common stock would otherwise be entitled and the denominator of which is the aggregate amount of fractional share interests to which all holders of Velodyne common stock would otherwise be entitled, without interest, subject to withholding taxes. As referred to in this joint proxy statement/prospectus, the effective time means the date and time when the certificate of merger for the first merger has been duly filed with the Secretary of State of the State of Delaware, or such other date and time as may be agreed by Ouster and Velodyne and specified in the certificate of merger for the first merger.

If the mergers are completed, Ouster stockholders’ shares of Ouster common stock will, after the effective time, constitute shares of the combined company. Because Ouster will issue a fixed number of shares of Ouster common stock in exchange for each outstanding share of Velodyne common stock, the value of the merger consideration that Velodyne stockholders will receive in the mergers will depend on the market price of shares of Ouster common stock at the effective time. The market price of shares of Ouster common stock that Velodyne stockholders receive after the mergers are completed could be greater than, less than or the same as the market price of shares of Ouster common stock on the date of this joint proxy statement/prospectus or at the time of the special meetings. Accordingly, you should obtain current market quotations for Ouster common stock and Velodyne common stock before deciding how to vote with respect to the adoption of the merger agreement. Ouster common stock is traded on the New York Stock Exchange, which is referred to as the NYSE, and Velodyne common stock is traded on the Nasdaq Global Select Market, which is referred to as the Nasdaq, under the symbols “OUST” and “VLDR,” respectively. Shares of common stock of the combined company are expected to trade on the NYSE under the symbol “OUST.”

For more information regarding the merger consideration to be received by Velodyne stockholders if the mergers are completed, see the section entitled “The Merger Agreement—Merger Consideration” of this joint proxy statement/prospectus.

 

Q:	Will Ouster equity awards be affected by the mergers?

 

A:

Ouster equity awards will remain equity awards relating to shares of Ouster common stock. Ouster equity awards will continue to vest in accordance with the terms of the award agreements applicable to such Ouster equity awards, except that the Ouster equity awards may be amended, as described in the section entitled “Interests of Ouster’s Directors and Executive Officers in the Mergers—Interests with Respect to Ouster Equity—Treatment of Ouster Equity Awards” of this joint proxy statement/prospectus. However, the mergers will be treated as a “change in control” or term of similar meaning for purposes of the Ouster compensation and benefit plans, including Ouster equity awards, which determination will result in certain “double trigger” benefits under such plans upon a qualifying termination of employment subsequent to the effective time.

 

3

Q:	Will Velodyne equity awards be affected by the mergers?

 

A:

At the effective time, all Velodyne options held by individuals who are eligible to be included as an “employee” in a registration statement filed on Form S-8 immediately following the effective time (“continuing service providers”) will be converted into a stock option to purchase shares of Ouster common stock (“Ouster Option”) with the same terms and conditions as applied to the option immediately prior to the effective time; however, each Ouster Option will cover a number of shares of Ouster common stock equal to the product of the number of shares of Velodyne common stock subject to the Velodyne option and the exchange ratio and will have an exercise price per share equal to the amount obtained by dividing the per-share exercise price of the Velodyne option by the exchange ratio. Each Velodyne option that is not held by a continuing service provider will terminate immediately prior to the effective time for no consideration.

All Velodyne restricted stock unit (“RSU”) awards held by continuing service providers will be converted into an award of restricted stock units covering Ouster common stock (each, an “Ouster RSU award”) with the same terms and conditions as applied to the Velodyne RSU award immediately prior to the effective time; however, the Ouster RSU awards will cover a number of shares of Ouster common stock equal to the product of the number of shares of Velodyne common stock subject to the Velodyne RSU award and the exchange ratio. Each Velodyne RSU award that is not held by a continuing service provider will terminate immediately prior to the effective time for no consideration.

Each share of Ouster common stock issued upon conversion of a share of Velodyne common stock, as described in this paragraph, that is subject to a substantial risk of forfeiture within the meaning of Section 83 of the Code, as amended (“Velodyne Restricted Stock”) will be subject to the same substantial risk of forfeiture and will have the same terms and conditions, including vesting, as applied to the Velodyne Restricted Stock immediately prior to the effective time (“Ouster Restricted Stock”), except that any performance goals applicable to Velodyne Restricted Stock will be deemed achieved at the greater of target and actual performance and, as of the effective time, the Ouster Restricted Stock issued on conversion of Velodyne Restricted Stock that was originally scheduled to vest based on performance goals will be subject solely to the service-based vesting schedule otherwise applicable to the Velodyne Restricted Stock.

All shares of Velodyne Restricted Stock and all Velodyne RSU awards held by non-employee members of the Velodyne board of directors will vest in full and become free of any restrictions, including any risk of forfeiture, as of the effective time and will be treated as shares of Velodyne common stock under the merger agreement.

At the effective time, each of the public warrants and private warrants of Velodyne (“Velodyne Warrants”) will be converted into a warrant to acquire Ouster common stock (“Ouster Warrant”) with the same terms and conditions as applied to such Velodyne Warrant immediately prior to the effective time; however, such Ouster Warrant will cover a number of shares of Ouster common stock equal to the product of the number of shares of Velodyne common stock subject to the Velodyne Warrant and the exchange ratio and will have an exercise price per share equal to the amount obtained by dividing the per share exercise price of the Velodyne Warrant by the exchange ratio. As of November 15, 2022, Velodyne had (i) outstanding publicly traded warrants exercisable for 4,480,425 shares of common stock at $11.50 per share; and (ii) an outstanding private warrant owned by an affiliate of Amazon Inc., exercisable for up to 39,784,213 shares of common stock at $4.16 per share, 50% of which will vest at the effective time.

The mergers will each be treated as a “change in control” or term of similar meaning for purposes of the Velodyne compensation and benefit plans, which determination will result in certain “double trigger” benefits under certain of such plans upon a qualifying termination of employment by certain executives subsequent to the effective time. For more information, see the information provided in the section entitled “Interests of Velodyne’s Directors and Executive Officers in the Mergers” of this joint proxy statement/prospectus.

 

Q:	What will happen to the Ouster Employee Stock Purchase Plan?

 

A:	The Ouster Employee Stock Purchase Plan will remain in effect in accordance with its terms.

 

4

Q:	What will happen to the Velodyne Employee Stock Purchase Plan?

 

A:

The Velodyne 2020 Employee Stock Purchase Plan (the “Velodyne ESPP”) will operate in accordance with its terms and past practice until the payroll date occurring prior to the closing, at which time (a) any offering period under the Velodyne ESPP in effect as of payroll date occurring prior to the closing of the first merger will be shortened by setting a new “Purchase Date” (within the meaning of the Velodyne ESPP) in respect of such offering period that is no later than such payroll date (after crediting contributions for such payroll date) (which is referred to as the “offering period end date”), and on the offering period end date, cause each outstanding purchase right under the Velodyne ESPP to be exercised on that date; and (b) as of the offering period end date, the Velodyne ESPP will be suspended, and no offering periods or purchase periods will be thereafter commenced and no payroll deductions or other contributions will be thereafter made or effected with respect to the Velodyne ESPP.

 

Q:	How does the board of directors of Ouster recommend that I vote at the Ouster special meeting?

 

A:	The Ouster board of directors unanimously recommends that you vote “FOR” the Ouster share issuance proposal, “FOR” the Ouster reverse stock split proposal and “FOR” the Ouster adjournment proposal.

In considering the recommendations of the Ouster board of directors, Ouster stockholders should be aware that Ouster directors and executive officers have interests in the mergers that are different from, or in addition to, their interests as Ouster stockholders. These interests may include, among others, the payment of severance benefits and acceleration of outstanding Ouster equity awards upon a qualifying termination of employment. For a more complete description of these interests, see the information provided in the section entitled “Interests of Ouster’s Directors and Executive Officers in the Mergers” of this joint proxy statement/prospectus.

 

Q:	How does the board of directors of Velodyne recommend that I vote at the Velodyne special meeting?

 

A:	The Velodyne board of directors unanimously recommends that you vote “FOR” the Velodyne merger agreement proposal, “FOR” the Velodyne compensation proposal and “FOR” the Velodyne adjournment proposal.

In considering the recommendations of the Velodyne board of directors, Velodyne stockholders should be aware that Velodyne directors and executive officers have interests in the mergers that are different from, or in addition to, their interests as Velodyne stockholders. These interests may include, among others, the payment of severance benefits, including the acceleration of outstanding Velodyne equity awards upon certain qualifying terminations of employment in connection with the mergers. For a more complete description of these interests, see the information provided in the section entitled “Interests of Velodyne’s Directors and Executive Officers in the Mergers” of this joint proxy statement/prospectus.

 

Q:	Who is entitled to vote at the Ouster special meeting?

 

A:

The record date for the Ouster special meeting is December 13, 2022, which is referred to as the Ouster record date. All holders of shares of Ouster common stock who held shares at the close of business on the Ouster record date are entitled to receive notice of, and to vote at, the Ouster special meeting and all adjournments thereof (if any). Each such holder of Ouster common stock is entitled to cast one vote on each matter properly brought before the Ouster special meeting for each share of Ouster common stock that such holder owned of record as of the Ouster record date. Virtual attendance at the special meeting is not required to vote. See below and the section entitled “The Ouster Special Meeting—Methods of Voting” of this joint proxy statement/prospectus for instructions on how to vote your shares without attending the Ouster special meeting.

 

5

Q:	Who is entitled to vote at the Velodyne special meeting?

 

A:

The record date for the Velodyne special meeting is December 5, 2022, which is referred to as the Velodyne record date. All holders of shares of Velodyne common stock who held shares at the close of business on the Velodyne record date are entitled to receive notice of, and to vote at, the Velodyne special meeting and all adjournments thereof (if any). Each such holder of Velodyne common stock is entitled to cast one vote on each matter properly brought before the Velodyne special meeting for each share of Velodyne common stock that such holder owned of record as of the Velodyne record date. Physical attendance at the special meeting is not required to vote. See below and the section entitled “The Velodyne Special Meeting—Methods of Voting” of this joint proxy statement/prospectus for instructions on how to vote your shares without attending the Velodyne special meeting.

 

Q:	What is a proxy?

 

A:

A stockholder’s legal designation of another person to vote such stockholder’s shares of common stock at a special meeting is referred to as a proxy. The document used to designate a proxy to vote your shares of Ouster common stock or Velodyne common stock, as applicable, is referred to as a proxy card.

 

Q:	How many votes do I have for the Ouster special meeting?

 

A:

Each Ouster stockholder is entitled to one vote for each share of Ouster common stock held of record as of the close of business on the Ouster record date on each proposal presented at the Ouster special meeting. As of the close of business on November 30, 2022, there were 184,952,952 outstanding shares of Ouster common stock.

 

Q:	How many votes do I have for the Velodyne special meeting?

 

A:

Each Velodyne stockholder is entitled to one vote for each share of Velodyne common stock held of record as of the close of business on the Velodyne record date on each proposal presented at the Velodyne special meeting. As of the close of business on the Velodyne record date, there were 238,281,867 outstanding shares of Velodyne common stock.

 

Q:	What constitutes a quorum for the Ouster special meeting?

 

A:

The holders of a majority in voting power of the shares of Ouster common stock issued and outstanding and entitled to vote at the Ouster special meeting must be represented at the Ouster special meeting virtually via the Ouster special meeting website, by remote communication or by proxy in order to constitute a quorum.

 

Q:	What constitutes a quorum for the Velodyne special meeting?

 

A:

The holders of a majority in voting power of the shares of the capital stock of Velodyne issued and outstanding and entitled to vote at the Velodyne special meeting must be represented at the Velodyne special meeting in person, by means of remote communication in a manner, if any, authorized by the Velodyne board of directors in its sole discretion, or by proxy in order to constitute a quorum.

 

Q:	Where will the common stock of the combined company that I receive in the mergers be publicly traded?

 

A:	Ouster will use its reasonable best efforts to cause the shares of Ouster common stock (including securities convertible into or exercisable for shares of Ouster common stock, such as warrants) to be issued in the mergers to be listed on the NYSE.

 

Q:	What happens if the mergers are not completed?

 

A:

If the merger agreement is not adopted by Velodyne stockholders or if the mergers are not completed for any other reason, Velodyne stockholders will not receive any merger consideration for their shares of Velodyne common stock in connection with the first merger. Instead, Velodyne will remain an independent

 

6

public company and Velodyne common stock will continue to be listed and traded on the Nasdaq, and Ouster common stock will continue to be traded on the NYSE, and Ouster will not complete the share issuance pursuant to the merger agreement as contemplated by the Ouster share issuance proposal. However, if the Ouster reverse stock split proposal is approved, even if the other proposals are not approved, Ouster may amend its charter in accordance with the Ouster reverse stock split proposal. If the merger agreement is terminated under specified circumstances, either Ouster or Velodyne may be required to pay or cause to be paid to the other party a termination fee of $7,000,000. See the section entitled “The Merger Agreement—Termination Fees” of this joint proxy statement/prospectus for a more detailed discussion of the termination fees.

 

Q:	What is a “broker non-vote”?

 

A:

Under the NYSE rules, banks, brokers and other nominees may use their discretion to vote “uninstructed” shares (i.e., shares of record held by banks, brokers or other nominees, but with respect to which the beneficial owner of such shares has not provided instructions on how to vote on a particular proposal) with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. Other than the Ouster reverse stock split proposal, all of the proposals currently scheduled for consideration at the Ouster special meeting and the Velodyne special meeting are “non-routine” matters. These NYSE rules are applicable to the votes to be held at the Velodyne special meeting even though the Velodyne common stock is currently listed on the Nasdaq.

A “broker non-vote” occurs on an item when (a) a bank, broker or other nominee has discretionary authority to vote on one or more proposals to be voted on at a meeting of stockholders, but is not permitted to vote on other proposals without instructions from the beneficial owner of the shares and (b) the beneficial owner fails to provide the bank, broker or other nominee with such instructions. None of the proposals currently scheduled to be voted on at either the Ouster special meeting or the Velodyne special meeting are routine matters for which brokers may have discretionary authority to vote, except for the Ouster reverse stock split proposal, which is considered routine and brokers therefore have discretionary authority to vote.

 

Q:	What stockholder vote is required for the approval of each proposal at the Ouster special meeting? What will happen if I fail to vote or abstain from voting on each proposal at the Ouster special meeting?

 

A:

Ouster Proposal # 1: Ouster Share Issuance Proposal. Assuming a quorum is present at the Ouster special meeting, the approval of the share issuance by Ouster stockholders requires the affirmative vote of the holders of a majority in voting power of the votes cast at the Ouster special meeting on the Ouster share issuance proposal. Accordingly, an Ouster stockholder’s abstention from voting, a broker non-vote or the failure of an Ouster stockholder not present at the meeting to vote will have no effect on the Ouster share issuance proposal.

Ouster Proposal # 2: Ouster Reverse Stock Split Proposal. Assuming a quorum is present at the Ouster special meeting, the approval and adoption of the amendment to the Ouster charter to allow Ouster, (a) to have the option to effect, separate from and following the closing of the mergers or (b) if the merger agreement is terminated, to have the option to effect, (i) a reverse stock split of Ouster common stock at one of six reverse stock split ratios, one-for-five, one-for-six, one-for-seven, one-for-eight, one-for-nine and one-for-ten, with an exact ratio to be determined by the board of the combined company following the closing or the Ouster board, as applicable, and (ii) if and when the reverse stock split is effected, a corresponding reduction in the number of authorized shares of Ouster common stock by the selected reverse stock split ratio, requires the affirmative vote of the holders of a majority of the outstanding shares of Ouster common stock entitled to vote at the Ouster special meeting on the Ouster reverse stock split proposal. Accordingly, an Ouster stockholder’s abstention from voting or the failure of an Ouster stockholder not present at the meeting to vote will have the same effect as a vote “AGAINST” the Ouster reverse stock split proposal. We do not anticipate any broker non-votes in connection with this proposal. Approval of the

 

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Ouster reverse stock split proposal is not conditioned upon approval of the Ouster share issuance proposal or on completion of the mergers. As a result, if the Ouster stockholders vote to approve the Ouster reverse stock split proposal, and if the merger agreement is terminated, the Ouster board of directors, in its discretion, may elect to effect the reverse stock split.

Ouster Proposal # 3: Ouster Adjournment Proposal. The Ouster special meeting may be adjourned to solicit additional proxies if there are not sufficient votes at the time of the Ouster special meeting to approve the Ouster share issuance proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to Ouster stockholders. If a quorum is present, the affirmative vote of the holders of a majority in voting power of the votes cast at the Ouster special meeting on the Ouster adjournment proposal is required to adjourn the Ouster special meeting. Accordingly, in such case, an Ouster stockholder’s abstention from voting, a broker non-vote or the failure of an Ouster stockholder not present at the meeting to vote will have no effect on the Ouster adjournment proposal. If a quorum is not present, then either (i) the person presiding over the meeting or (ii) a majority in voting power of the stockholders entitled to vote at the meeting, present in person, or by remote communication, or represented by proxy, shall have power to adjourn the Ouster special meeting. Accordingly, in the case of (ii), an Ouster stockholder’s abstention from voting, a broker non-vote or the failure of an Ouster stockholder not present at the meeting to vote will have the same effect as a vote “AGAINST” the Ouster adjournment proposal.

 

Q:	Why am I being asked to approve the Ouster reverse stock split proposal?

 

A:

The Ouster board of directors approved the proposal to amend the Ouster charter to allow Ouster to have the option to effect, separate from and following the closing of the mergers, (a) a reverse stock split of Ouster common stock at one of six reverse stock split ratios, one-for-five, one-for-six, one-for-seven, one-for-eight, one-for-nine and one-for-ten, with an exact ratio to be determined by the board of the combined company following the closing, and (b) if and when the reverse stock split is effected, a corresponding reduction in the number of authorized shares of Ouster common stock by the selected reverse stock split ratio. The Ouster board of directors approved the Ouster reverse stock split proposal for the following reasons:

 

•

the Ouster board of directors believes a higher stock price that may result from the reverse stock split may help generate investor interest in Ouster and help Ouster attract and retain employees;

 

•

if the reverse stock split successfully increases the per share price of Ouster common stock, the Ouster board of directors believes such increase may increase trading volume in Ouster common stock; and

 

•

if the reverse stock split successfully increases the per share price of Ouster common stock, the Ouster board of directors believes that effecting the reverse stock split may be an effective means of avoiding any potential delisting of Ouster common stock from the NYSE.

The Ouster reverse stock split proposal, if approved by Ouster stockholders, will provide the board of the combined company with the flexibility, but not the obligation, to effect a reverse stock split, separate from and following the closing of the mergers and the transactions contemplated by the merger agreement. If the mergers are not consummated for any reason, the Ouster board of directors may still elect to effect a reverse stock split. Even if the Ouster reverse stock split proposal is approved by Ouster stockholders, the board of the combined company may delay or abandon the reverse stock split at any time prior to the effective time of the reverse stock split if the board of the combined company determines that the reverse stock split is no longer in the best interests of the combined company or its stockholders. For further details, see the section titled “Ouster Proposal #2: Ouster Reverse Stock Split Proposal.”

 

Q:	What stockholder vote is required for the approval of each proposal at the Velodyne special meeting? What will happen if I fail to vote or abstain from voting on each proposal at the Velodyne special meeting?

 

A:	Velodyne Proposal #1: Velodyne Merger Agreement Proposal. Assuming a quorum is present at the Velodyne special meeting, the approval of the merger agreement proposal by Velodyne stockholders

requires the affirmative vote of the holders of a majority of the issued and outstanding shares of Velodyne

 

8

common stock entitled to vote at the Velodyne special meeting on the Velodyne merger agreement proposal. Accordingly, a Velodyne stockholder’s abstention from voting, a broker non-vote or the failure of a Velodyne stockholder not present at the meeting to vote (including the failure of a Velodyne stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have the same effect as votes cast “AGAINST” the Velodyne merger agreement proposal.

Velodyne Proposal #2: Velodyne Compensation Proposal. Assuming a quorum is present at the Velodyne special meeting, the approval, on a non-binding advisory basis, of the compensation that may be paid or become payable to Velodyne’s named executive officers that is based on or otherwise relates to the transactions contemplated by the merger agreement, requires the affirmative vote of the holders of a majority of the votes cast at the Velodyne special meeting on the Velodyne compensation proposal. Accordingly, a Velodyne stockholder’s abstention from voting, a broker non-vote or the failure of a Velodyne stockholder not present at the meeting to vote (including the failure of a Velodyne stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have no effect on the Velodyne compensation proposal.

Velodyne Proposal #3: Velodyne Adjournment Proposal. The Velodyne special meeting may be adjourned to solicit additional proxies if there are not sufficient votes at the time of the Velodyne special meeting to approve the Velodyne merger agreement proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to Velodyne stockholders. Whether or not a quorum is present, the affirmative vote of the holders of a majority of the votes cast at the Velodyne special meeting on the Velodyne adjournment proposal is required to approve the Velodyne adjournment proposal, and the chairman of the Velodyne special meeting also has the power to adjourn such Velodyne special meeting from time to time. Accordingly, a Velodyne stockholder’s abstention from voting, a broker non-vote or the failure of a Velodyne stockholder not present at the meeting to vote (including the failure of a Velodyne stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have no effect on the Velodyne adjournment proposal.

 

Q:	Why am I being asked to consider and vote on, by non-binding, advisory vote, the Velodyne compensation proposal?

 

A:	Under SEC rules, Velodyne is required to seek a non-binding advisory vote of its stockholders relating to the compensation that may be paid or become payable to Velodyne’s named executive officers that is based on or otherwise relates to the mergers (also known as “golden parachute” compensation).

 

Q:	What happens if Velodyne stockholders do not approve, by non-binding, advisory vote, the Velodyne compensation proposal?

 

A:

Because the vote on the proposal to approve the Velodyne compensation proposal is advisory in nature, the outcome of the vote will not be binding upon Velodyne or the combined company. Accordingly, the merger-related compensation, which is described under “Interests of Velodyne’s Directors and Executive Officers in the Mergers,” may be paid to Velodyne’s named executive officers even if Velodyne stockholders do not approve the Velodyne compensation proposal.

 

Q:	What if I hold shares in both Ouster and Velodyne?

 

A:

If you are both an Ouster stockholder and a Velodyne stockholder, you will receive two separate packages of proxy materials. A vote cast as an Ouster stockholder will not count as a vote cast as a Velodyne stockholder, and a vote cast as a Velodyne stockholder will not count as a vote cast as an Ouster stockholder. Therefore, please submit separate proxies for your shares of Ouster common stock and your shares of Velodyne common stock.

 

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Q:	How can I vote my shares in person at my respective special meeting?

 

A:

Record Holders. Shares held directly in your name as the stockholder of record of Ouster or Velodyne may be voted electronically at the Ouster special meeting or in person at the Velodyne special meeting, as applicable. If you choose to vote your shares electronically at the Ouster special meeting or in person at the Velodyne special meeting, as applicable, please bring required documentation in accordance with the section entitled “The Ouster Special Meeting—Attending the Ouster Special Meeting” of this joint proxy statement/prospectus, with respect to the Ouster special meeting, and the section entitled “The Velodyne Special Meeting—Attending the Velodyne Special Meeting” of this joint proxy statement/prospectus, with respect to the Velodyne special meeting.

Shares in “street name.” With respect to the Velodyne special meeting, shares held in “street name” may be voted in person by you only if you obtain a signed legal proxy from your bank, broker or other nominee giving you the right to vote the shares and bring the signed legal proxy to the meeting. If you choose to vote your shares in person at the Velodyne special meeting, please bring required documentation in accordance with the section entitled “The Velodyne Special Meeting—Attending the Velodyne Special Meeting” of this joint proxy statement/prospectus.

With respect to the Ouster special meeting, if your shares are held in street name through a bank, broker or other nominee, you will receive instructions on how to vote from the bank or broker. You must follow their instructions in order for your shares to be voted. Internet and telephone voting also may be offered to stockholders owning shares through certain banks and brokers. If your shares are not registered in your own name and you would like to vote your shares at the Ouster special meeting, you may visit www.virtualshareholdermeeting.com/OUST2023SM and enter the 16-digit control number included in the voting instruction card provided to you by your bank or brokerage firm. If you hold your shares in street name and you do not receive a 16-digit control number, you may need to log in to your bank or brokerage firm’s website and select the shareholder communications mailbox to access the meeting and vote. Instructions should also be provided on the voting instruction card provided by your bank or brokerage firm.

Even if you plan to attend the Ouster special meeting electronically or the Velodyne special meeting in person, as applicable, Ouster and Velodyne recommend that you submit a proxy to vote your shares in advance as described below so that your vote will be counted if you later decide not to or become unable to attend the respective special meeting. The use of video, still photography or audio recording is not permitted at either the Ouster special meeting or the Velodyne special meeting and, for the safety of in-person attendees at the Velodyne special meeting, all bags, packages and briefcases are subject to inspection.

Additional information on attending the special meetings can be found in the section entitled “The Ouster Special Meeting” of this joint proxy statement/prospectus and in the section entitled “The Velodyne Special Meeting” of this joint proxy statement/prospectus.

 

Q:	What if during the check-in time or during the Ouster special meeting I have technical difficulties or trouble accessing the virtual meeting website?

 

A:

We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting website for the Ouster special meeting. If you encounter any difficulties accessing the virtual meeting website during the check-in or meeting time for the Ouster special meeting, please call the technical support number found on the Ouster special meeting website.

 

Q:	How can I vote my shares without attending my respective special meeting?

 

A:

Whether you hold your shares directly as the stockholder of record of Ouster or Velodyne or beneficially in “street name,” you may direct your vote by proxy without attending the Ouster special meeting or the Velodyne special meeting, as applicable. You can vote by proxy over the Internet, by telephone or by mail by following the instructions provided in the enclosed proxy card. Please note that if you hold shares beneficially in “street name,” you should follow the voting instructions provided by your bank, broker or other nominee.

 

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Additional information on voting procedures can be found under the section entitled “The Ouster Special Meeting” of this joint proxy statement/prospectus and under the section entitled “The Velodyne Special Meeting” of this joint proxy statement/prospectus.

 

Q:	What is the difference between holding shares as a stockholder of record and as a beneficial owner of shares held in “street name?”

 

A:

If your shares of common stock of Ouster or Velodyne are registered directly in your name with Continental Stock Transfer & Trust Company, N.A., Ouster’s and Velodyne’s transfer agent, you are considered the stockholder of record with respect to those shares. As the stockholder of record, you have the right to vote, or to grant a proxy for your vote, directly to Ouster or Velodyne, as applicable, or to a third party to vote, at the respective special meeting.

If your shares of common stock in Ouster or Velodyne are held by a bank, broker or other nominee, you are considered the beneficial owner of shares held in “street name,” and your bank, broker or other nominee is considered the stockholder of record with respect to those shares. Your bank, broker or other nominee will provide you, as the beneficial owner, a package describing the procedure for voting your shares. You should follow the instructions provided by them to vote your shares. You are invited to attend the Ouster special meeting or the Velodyne special meeting, as applicable; however, you may not vote these shares in person at the Velodyne special meeting unless you obtain a signed legal proxy, executed in your favor, from your bank, broker or other nominee that holds your shares, giving you the right to vote the shares in person at the Velodyne special meeting. With respect to the Ouster special meeting, if your shares are not registered in your own name and you would like to vote your shares at the Ouster special meeting, you may visit www.virtualshareholdermeeting.com/OUST2023SM and enter the 16-digit control number included in the voting instruction card provided to you by your bank or brokerage firm. If you hold your shares in street name and you do not receive a 16-digit control number, you may need to log in to your bank or brokerage firm’s website and select the shareholder communications mailbox to access the meeting and vote. Instructions should also be provided on the voting instruction card provided by your bank or brokerage firm.

 

Q:	If my shares of Ouster common stock or Velodyne common stock are held in “street name” by my bank, broker or other nominee, will my bank, broker or other nominee automatically vote those shares for me?

 

A:

In most cases, no. For all proposals except the Ouster reverse stock split proposal, your bank, broker or other nominee will only be permitted to vote your shares of Ouster common stock or Velodyne common stock, as applicable, if you instruct your bank, broker or other nominee how to vote. You should follow the procedures provided by your bank, broker or other nominee regarding the voting of your shares. Under the rules of the NYSE and Nasdaq, banks, brokers and other nominees who hold shares of Ouster common stock or Velodyne common stock in “street name” for their customers have authority to vote on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokers and other nominees are prohibited from exercising their voting discretion with respect to non-routine matters. The Ouster reverse stock split proposal is considered a routine matter and all other proposals currently scheduled to be considered and voted on at each of the Ouster special meeting and the Velodyne special meeting are considered non-routine. As a result, for proposals other than the Ouster reverse stock split proposal, absent specific instructions from the beneficial owner of such shares, banks, brokers and other nominees are not empowered to vote such shares.

For Ouster stockholders, not instructing your bank, broker or other nominee how you wish to vote your shares will have no effect on the Ouster share issuance proposal or, assuming a quorum is present at the Ouster special meeting, the Ouster adjournment proposal. We do not expect any broker non-votes with respect to the Ouster reverse stock split proposal.

For Velodyne stockholders, not instructing your bank, broker or other nominee how you wish to vote your shares will have the same effect as a vote “AGAINST” the Velodyne merger agreement proposal, but will not

 

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be counted as “FOR” or “AGAINST” and, assuming a quorum is present at the Velodyne special meeting, will have no effect on, the Velodyne compensation proposal or the Velodyne adjournment proposal.

 

Q:	What should I do if I receive more than one set of voting materials for the same special meeting?

 

A:

If you hold shares of Ouster common stock or Velodyne common stock in “street name” and also directly in your name as a stockholder of record or otherwise, or if you hold shares of Ouster common stock or Velodyne common stock in more than one brokerage account, you may receive more than one set of voting materials relating to the same special meeting.

Record Holders. For shares held directly, please complete, sign, date and return each proxy card (or submit a proxy to cast your vote over the Internet, or by telephone, as provided on each proxy card) or otherwise follow the voting instructions provided in this joint proxy statement/prospectus in order to ensure that all of your shares of Ouster common stock or Velodyne common stock are voted.

Shares in “street name.” For shares held in “street name” through a bank, broker or other nominee, you should follow the procedures provided by your bank, broker or other nominee to vote your shares.

 

Q:	If a stockholder gives a proxy, how are the shares of Ouster common stock or Velodyne common stock voted?

 

A:

Regardless of the method by which you choose to vote, the individuals named on the enclosed proxy card will vote your shares of Ouster common stock or Velodyne common stock, as applicable, in the way that you indicate. When completing the Internet or telephone processes or the proxy card, you may specify whether your shares of Ouster common stock or Velodyne common stock, as applicable, should be voted for or against, or abstain from voting on, all, some or none of the specific items of business to come before the respective special meetings.

 

Q:	How will my shares of Ouster common stock be voted if I return a blank proxy?

 

A:

If you are a stockholder of record and you sign, date and return your proxy and do not indicate how you want your shares of Ouster common stock to be voted, then your shares of Ouster common stock will be voted “FOR” the Ouster share issuance proposal, “FOR” the Ouster reverse stock split proposal and “FOR” the Ouster adjournment proposal.

 

Q:	How will my shares of Velodyne common stock be voted if I return a blank proxy?

 

A:

If you are a stockholder of record and you sign, date and return your proxy and do not indicate how you want your shares of Velodyne common stock to be voted, then your shares of Velodyne common stock will be voted “FOR” the Velodyne merger agreement proposal, “FOR” the Velodyne compensation proposal and “FOR” the Velodyne adjournment proposal.

 

Q:	Can I change my vote after I have submitted my proxy?

 

A:	Any Ouster or Velodyne stockholder giving a proxy has the right to revoke it before the proxy is voted at the applicable special meeting by doing any of the following:

 

•

subsequently submitting a new proxy (including by submitting a proxy via the Internet or telephone) that is received prior to the applicable special meeting (which should be received by the deadline specified on the accompanying proxy card in order to ensure that your proxy is counted);

 

•

giving written notice of your revocation to Ouster’s corporate secretary or Velodyne’s corporate secretary, as applicable; or

 

•

voting virtually at the Ouster special meeting via the Ouster special meeting website, or voting in person at the Velodyne special meeting, as applicable.

 

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Execution or revocation of a proxy will not in any way affect your right to attend the applicable special meeting and vote electronically at the Ouster special meeting or in person at the Velodyne special meeting, as applicable. Attending the applicable special meeting will not, by itself, revoke a proxy. Written notices of revocation and other communications with respect to the revocation of proxies should be addressed:

 

if you are an Ouster stockholder, to: Ouster, Inc. 350 Treat Avenue San Francisco, California 94110 (415) 949-0108 Attention: Corporate Secretary		if you are a Velodyne stockholder, to: Velodyne Lidar, Inc. 5521 Hellyer Avenue San Jose, California 95138 (669) 275-2251 Attention: Corporate Secretary

For more information, see the section entitled “The Ouster Special Meeting—Revocability of Proxies” of this joint proxy statement/prospectus and the section entitled “The Velodyne Special Meeting—Revocability of Proxies” of this joint proxy statement/prospectus, as applicable.

 

Q:	If I hold my shares in “street name,” can I change my voting instructions after I have submitted voting instructions to my bank, broker or other nominee?

 

A:	If your shares are held in the name of a bank, broker or other nominee and you previously provided voting instructions to your bank, broker or other nominee, you should follow the instructions provided by your bank, broker or other nominee to revoke or change your voting instructions.

 

Q:	Where can I find the voting results of the special meetings?

 

A:

The preliminary voting results for each special meeting will be announced at that special meeting. In addition, within four business days after completion of its special meeting, each of Ouster and Velodyne intends to file the final voting results of its respective special meeting with the SEC on a Current Report on Form 8-K.

 

Q:	If I do not favor the mergers, what are my rights?

 

A:

Neither Ouster stockholders nor Velodyne stockholders are entitled to appraisal rights under the DGCL. If they are not in favor of the mergers, Ouster stockholders may vote against the Ouster share issuance proposal and Velodyne stockholders may vote against the Velodyne merger agreement proposal. For more information, see the section entitled “No Appraisal Rights” of this joint proxy statement/prospectus. Information about how Ouster stockholders may vote on the proposals being considered in connection with the mergers can be found under the section entitled “The Ouster Special Meeting” of this joint proxy statement/prospectus. Information about how Velodyne stockholders may vote on the proposals being considered in connection with the mergers can be found under the section entitled “The Velodyne Special Meeting” of this joint proxy statement/prospectus.

 

Q:	Are there any risks that I should consider in deciding whether to vote for the approval of the Ouster share issuance proposal or the approval of the Velodyne merger agreement proposal?

 

A:

Yes. You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors” of this joint proxy statement/prospectus. You also should read and carefully consider the risk factors of Ouster and Velodyne contained in the documents that are incorporated by reference into this joint proxy statement/prospectus.

 

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Q:	Who will solicit and pay the cost of soliciting proxies?

 

A:

Ouster has engaged MacKenzie Partners, Inc., which is referred to as MacKenzie Partners, to assist in the solicitation of proxies for the Ouster special meeting. Ouster estimates that it will pay MacKenzie Partners a fee of approximately $10,000, plus reimbursement of reasonable expenses. Ouster has agreed to indemnify MacKenzie Partners against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions). Velodyne has engaged Kingsdale Advisors, which is referred to as Kingsdale, to assist in the solicitation of proxies for the Velodyne special meeting and to provide related advice and informational support, for a services fee and the reimbursement of customary disbursements, which are not expected to exceed $15,000 in total. Velodyne has agreed to indemnify Kingsdale against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions). Ouster and Velodyne also may be required to reimburse banks, brokers and other custodians, nominees and fiduciaries or their respective agents for their expenses in forwarding proxy materials to beneficial owners of Ouster common stock and Velodyne common stock, respectively. Ouster’s directors, officers and employees and Velodyne’s directors, officers and employees also may solicit proxies, by telephone, by mail, by electronic means or in person. They will not be paid any additional amounts for soliciting proxies.

 

Q:	What are the U.S. federal income tax consequences of the mergers to Velodyne stockholders?

 

A:

The mergers, taken together, are intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, as amended, which is referred to as the Code. Assuming that the mergers, taken together, so qualify, a U.S. holder (as defined in the section entitled “U.S. Federal Income Tax Consequences of the Mergers” of this joint proxy statement/prospectus) of Velodyne common stock generally will not recognize any gain or loss for U.S. federal income tax purposes upon the exchange of Velodyne common stock for Ouster common stock in the mergers, except with respect to cash received by such holder in lieu of fractional shares of Ouster common stock.

See the section entitled “U.S. Federal Income Tax Consequences of the Mergers” of this joint proxy statement/prospectus for a more complete description of certain U.S. federal income tax consequences of the mergers. Please consult your tax advisors as to the specific tax consequences to you of the mergers.

 

Q:	When are the mergers expected to be completed?

 

A:

Subject to the satisfaction or waiver of the closing conditions described under the section entitled “The Merger Agreement—Conditions to the Completion of the Mergers” of this joint proxy statement/prospectus, including the adoption of the merger agreement by Velodyne stockholders and the approval of the Ouster stock issuance proposal by Ouster stockholders, the mergers are expected to close in the first half of 2023. However, neither Ouster nor Velodyne can predict the actual date on which the mergers will be completed, or if the mergers will be completed at all, because completion of the mergers are subject to conditions and factors outside the control of both companies.

 

Q:	What are the conditions to the completion of the mergers?

 

A:

The mergers are subject to a number of conditions to closing as specified in the merger agreement. These closing conditions include, among others, (i) approval by the stockholders of Ouster of the issuance of the shares of Ouster common stock, (ii) the adoption by the stockholders of Velodyne of the merger agreement, (iii) authorization for listing on the NYSE of the shares of Ouster common stock to be issued in the mergers, subject to official notice of issuance, (iv) effectiveness of this registration statement on Form S-4, (v) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Act, if applicable, and (vi) the absence of any law or order promulgated, entered, enforced, enacted or issued by a governmental authority which prohibits, restrains, or makes illegal the consummation of the mergers and shall continue in effect. The obligation of each of Ouster and Velodyne to consummate the mergers is also conditioned on, among other things, (1) the representations and warranties of the other party being true and

 

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correct as of the date of the merger agreement and as of the closing date of the mergers, subject to certain materiality exceptions, (2) the performance in all material respects by the other party of its obligations under the merger agreement required to be performed on or prior to the date of the closing of the mergers, (3) the receipt of certain opinions from legal counsel regarding the intended tax treatment of the mergers and (4) the absence of a continuing material adverse effect with respect to the other party. No assurance can be given that the required consents and approvals will be obtained or that the required conditions to closing will be satisfied, and, even if all required consents and approvals are obtained and the conditions are satisfied, no assurance can be given as to the terms, conditions and timing of such consents and approvals. Any delay in completing the mergers could cause the combined company not to realize, or to be delayed in realizing, some or all of the benefits that Ouster and Velodyne expect to achieve if the mergers are successfully completed within the expected time frame. For a more complete summary of the conditions that must be satisfied or waived prior to completion of the mergers, see the sections entitled “The Merger Agreement—Conditions to the Completion of the Mergers” and “The Mergers—Regulatory Approvals” of this joint proxy statement/prospectus.

 

Q:	What respective equity stakes will Ouster stockholders and Velodyne stockholders hold in the combined company immediately following the mergers?

 

A:

As of the date of this joint proxy statement/prospectus, based on the exchange ratio of 0.8204 and the estimated number of shares of common stock of Ouster and Velodyne that will be outstanding immediately prior to the completion of the first merger including equity awards, Ouster and Velodyne estimate that holders of shares of Ouster common stock as of immediately prior to the completion of the first merger will hold, in the aggregate, approximately 50% of the issued and outstanding shares of common stock of the combined company (based on fully diluted shares outstanding of the combined company including equity awards (using the treasury stock method)) immediately following the completion of the first merger, and holders of shares of Velodyne common stock as of immediately prior to the completion of the first merger will hold, in the aggregate, approximately 50% of the issued and outstanding shares of common stock of the combined company (based on fully diluted shares outstanding of the combined company including equity awards (using the treasury stock method)) immediately following the completion of the first merger. The exact equity stake of Ouster stockholders and Velodyne stockholders in the combined company immediately following the first merger will depend on the number of shares of Ouster common stock and Velodyne common stock issued and outstanding immediately prior to the first merger.

 

Q:	What should I do now?

 

A:

You should read this joint proxy statement/prospectus carefully and in its entirety, including the annexes, and return your completed, signed and dated proxy card(s) by mail in the enclosed postage-paid envelope(s) or submit your voting instructions over the Internet, or by telephone, as soon as possible so that your shares will be voted in accordance with your instructions.

 

Q:	Whom do I call if I have questions about the Ouster special meeting, the Velodyne special meeting or the mergers?

 

A:	If you have questions about the Ouster special meeting, the Velodyne special meeting or the mergers, or desire additional copies of this joint proxy statement/prospectus or additional proxies, you may contact:

 

if you are an Ouster stockholder: MacKenzie Partners, Inc. 1407 Broadway, 27th Floor New York, NY 10018 (212) 929-5500 (Call Collect) Call Toll-Free: (800) 322-2885 proxy@mackenziepartners.com		if you are a Velodyne stockholder: Kingsdale Advisors 745 Fifth Avenue, 5th Floor New York, New York 10151 (646)-851-2790 (Call Collect) Call Toll Free: (877)-659-1821 contactus@kingsdaleadvisors.com

 

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following tables set forth selected unaudited pro forma condensed combined financial information giving effect to the planned mergers of Ouster and Velodyne. The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2022 and the fiscal year ended December 31, 2021, give effect to the mergers as if they had been consummated on January 1, 2021, the beginning of Ouster’s most recently completed fiscal year. The unaudited pro forma condensed combined balance sheet as of September 30, 2022 gives effect to the mergers as if they had been consummated on September 30, 2022.

The selected unaudited pro forma condensed combined financial information is provided for illustrative purposes only and does not purport to represent what the actual consolidated results of operations or consolidated financial condition of the combined company would have been had the mergers actually occurred on the dates indicated, nor do they purport to project the future consolidated results of operations or consolidated financial condition of the combined company for any future period or as of any future date.

The selected unaudited pro forma condensed combined financial data as of and for the nine months ended September 30, 2022 and for the year ended December 31, 2021 are derived from the unaudited pro forma condensed combined financial information included under the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” of this joint proxy statement/prospectus and should be read in conjunction with that information. The unaudited pro forma adjustments are based upon available information and certain assumptions that Ouster and Velodyne believe are reasonable under the circumstances. The unaudited pro forma condensed combined financial information also gives effect to the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial statements included in this joint proxy statement/prospectus. For more information, please see the section titled “Unaudited Pro Forma Condensed Combined Financial Information” of this joint proxy statement/prospectus.

 

(In thousands, except per share data)		Nine Months Ended September 30, 2022				Year Ended December 31, 2021
Unaudited Pro Forma Condensed Combined Statement of Operations Data:
Revenues		$	57,419			$	95,502
Net loss		$	(234,332	)		$	(324,879	)
Net loss per share:
Basic and diluted		$	(0.63	)		$	(0.99	)

 

(In thousands)		As of September 30, 2022
Unaudited Pro Forma Condensed Combined Balance Sheet Data:
Cash and cash equivalents, and short-term investments		$	332,032
Total assets		$	583,206
Total liabilities		$	117,546
Total stockholders’ equity		$	465,660

 

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COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA

Presented below are Velodyne’s historical per share data for the nine months ended September 30, 2022 and the fiscal year ended December 31, 2021, Ouster’s historical per share data for the nine months ended September 30, 2022 and the fiscal year ended December 31, 2021, unaudited pro forma combined per share data for the nine months ended September 30, 2022 and the fiscal year ended December 31, 2021, and unaudited pro forma equivalent data for the nine months ended September 30, 2022 and the fiscal year ended December 31, 2021. This information should be read together with the consolidated financial statements and related notes of Velodyne and Ouster that are incorporated by reference into this joint proxy statement/prospectus and with the unaudited pro forma condensed combined financial data included under the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” of this joint proxy statement/prospectus. The pro forma information is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the mergers had been completed as of the beginning of the periods presented or on the dates presented, nor is it necessarily indicative of the future operating results or financial position of the combined company. The historical book value per share is computed by dividing total stockholders’ equity by the number of shares outstanding at the end of the relevant period. The pro forma net loss per share of the combined company is computed by dividing the pro forma net loss by the pro forma weighted average number of basic and diluted shares outstanding. The pro forma book value per share of the combined company is computed by dividing total pro forma stockholders’ equity by the pro forma number of shares outstanding at the end of the period.

 

		Nine Months Ended September 30, 2022				Year Ended December 31, 2021
Velodyne Historical Data
Historical per share of common stock
Basic and diluted net loss per share		$	(0.66	)		$	(1.09	)
Book value per share (at period end)		$	0.93			$	1.52

 

		Nine Months Ended September 29, 2022				Year Ended December 31, 2021
Ouster Historical Data
Historical per share of common stock
Basic and diluted net loss per share		$	(0.55	)		$	(0.70	)
Book value per share (at period end)		$	1.11			$	1.51

 

		Nine Months Ended September 30, 2022				Year Ended December 31, 2021
Pro Forma Combined Data
Pro Forma per share of common stock
Basic and diluted net loss per share		$	(0.63	)		$	(0.99	)
Book value per share (at period end)		$	1.24			$	N/A	(1)

 

		Nine Months Ended September 30, 2022				Year Ended December 31, 2021
Velodyne Pro Forma Equivalent Data
Pro Forma per share of common stock
Basic and diluted net loss per share		$	(0.52	)		$	(0.81	)
Book value per share (at period end)		$	1.02			$	N/A	(1)

 

(1)	Pro Forma balance sheet information as of December 31, 2021 is not required and as such is not included in the table.

 

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COMPARISON OF OUSTER AND VELODYNE MARKET PRICES AND IMPLIED VALUE OF MERGER CONSIDERATION

The following table presents trading information for Ouster common stock on the NYSE and Velodyne common stock on the Nasdaq, respectively, on November 4, 2022, the last trading day before announcement of the mergers and November 22, 2022, the most recent practicable trading day before the date of this joint proxy statement/prospectus. The table also shows the estimated equivalent per-share value of the per share consideration proposed for each share of Velodyne common stock as of the same two dates. This estimated equivalent per-share value was calculated by multiplying the closing price of a share of Ouster common stock on the relevant date by the exchange ratio of 0.8204 shares for each share of Velodyne common stock.

 

		Velodyne Common Stock												Ouster Common Stock												Equivalent Per-Share Value
		High				Low				Close				High				Low				Close				High				Low				Close
Date
November 4, 2022		$	0.95			$	0.86			$	0.89			$	1.21			$	1.12			$	1.17			$	0.99			$	0.92			$	0.96
November 22, 2022		$	1.02			$	0.97			$	0.98			$	1.24			$	1.15			$	1.20			$	1.02			$	0.94			$	0.98

 

The market prices of Ouster common stock and Velodyne common stock fluctuated prior to and have fluctuated after the date of the announcement of the merger agreement and may continue to fluctuate prior to the completion of the first merger. No assurance can be given concerning the market prices of Ouster common stock or Velodyne common stock before completion of the first merger or of the market price of the common stock of the combined company after completion of the first merger. Because the exchange ratio is fixed and will not be adjusted for changes in the market prices of either Ouster common stock or Velodyne common stock, the market price of Ouster common stock (and, therefore, the value of the merger consideration) when received by Velodyne stockholders after the first merger is completed could be greater than, less than or the same as shown in the table above. Accordingly, these comparisons may not provide meaningful information to Ouster stockholders and Velodyne stockholders in determining how to vote with respect to the proposals described in this joint proxy statement/prospectus. Ouster stockholders and Velodyne stockholders are encouraged to obtain current market quotations for Ouster common stock and Velodyne common stock and to review carefully the other information contained in this joint proxy statement/prospectus or incorporated by reference into this joint proxy statement/prospectus. For more information, see the section entitled “Where You Can Find More Information” of this joint proxy statement/prospectus.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This registration statement on Form S-4, of which this joint proxy statement/prospectus forms a part, and the documents to which Ouster and Velodyne refer you to in this registration statement, as well as oral statements made or to be made by Ouster and Velodyne, include certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties and are made pursuant to the safe harbor provisions of Section 27A of the Securities Act, and Section 21E of the Exchange Act. The words “believe,” “continue,” “could,” “expect,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “should,” “may,” “will,” “would” or the negative thereof and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the control of Ouster and Velodyne. Statements in or incorporated by reference into this registration statement regarding Ouster, Velodyne, or the proposed mergers, referred to as the proposed transaction, that are forward-looking, including statements regarding the anticipated benefits of the proposed transaction, the impact of the proposed transaction on Ouster’s and Velodyne’s employees, business and future financial and operating results, the amount and timing of synergies from the proposed transaction, and the closing date for the proposed transaction, are based on Ouster’s and Velodyne’s management’s estimates, assumptions and projections, and are subject to significant uncertainties and other factors, many of which are beyond Ouster’s and Velodyne’s control. These factors and risks include, but are not limited to:

 

•

weakening of global and/or regional economic conditions, generally or specifically in the lidar technology industry, which could decrease the demand for Ouster’s and Velodyne’s products and solutions;

 

•

the ability of Ouster or Velodyne to meet rapid demand shifts;

 

•

the ability of Ouster or Velodyne to continue technological innovation and introduce new products to meet customers’ rapidly changing requirements;

 

•

the companies’ customer bases;

 

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the ability of Ouster or Velodyne to identify, effect and integrate acquisitions, joint ventures or other transactions;

 

•

the ability of Ouster or Velodyne to protect and enforce intellectual property rights;

 

•

operational, political and legal risks of Ouster’s and Velodyne’s international operations;

 

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the increasing complexity of certain manufacturing processes;

 

•

raw material shortages and price increases;

 

•

changes in government regulations of the countries in which Ouster and Velodyne operate;

 

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the fluctuation of currency exchange rates;

 

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fluctuations in the market price of Ouster’s stock;

 

•

the ability of the companies to integrate their respective businesses promptly and effectively and to achieve the anticipated synergies and value-creation contemplated by the mergers; and

 

•

other risk factors and additional information.

In addition, material risks that could cause actual results to differ from forward-looking statements include: the inherent uncertainty associated with financial or other projections; the companies’ ability to obtain the approval of the proposed transaction by Velodyne stockholders and the approval of the Ouster share issuance proposal and the timing of the closing of the proposed transaction, including the risk that the conditions to the transaction are not satisfied on a timely basis or at all and the failure of the proposed transaction to close for any other reason; the risk that a consent or authorization that may be required for the proposed transaction is not

 

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obtained or is obtained subject to conditions that are not anticipated; unanticipated difficulties or expenditures relating to the proposed transaction, the response of business partners and retention as a result of the announcement and pendency of the proposed transaction; and the diversion of management time in connection with the proposed transaction.

For further discussion of these and other risks, contingencies and uncertainties applicable to Ouster and Velodyne, see the section entitled “Risk Factors” of this joint proxy statement/prospectus and in Ouster’s and Velodyne’s other filings with the SEC incorporated by reference into this joint proxy statement/prospectus. See also the section entitled “Where You Can Find More Information” of this joint proxy statement/prospectus for more information about the SEC filings incorporated by reference into this joint proxy statement/prospectus.

All subsequent written or oral forward-looking statements attributable to Ouster or Velodyne or any person acting on its or their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Neither Ouster nor Velodyne is under any obligation, and each expressly disclaims any obligation, to update, alter, or otherwise revise any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise, except as may be required by law.

 

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RISK FACTORS

In deciding whether to vote for the Ouster share issuance proposal or the Ouster reverse stock split proposal, in the case of Ouster stockholders, or the adoption of the merger agreement, in the case of Velodyne stockholders, you are urged to carefully consider all of the information included or incorporated by reference in this joint proxy statement/prospectus, which is listed in the section entitled “Where You Can Find More Information” of this joint proxy statement/prospectus. You should also read and consider the risks associated with each of the businesses of Ouster and Velodyne because these risks will also affect the combined company. The risks associated with the business of Ouster can be found in Ouster’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and the risks associated with the business of Velodyne can be found in Velodyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as such risks may be updated or supplemented in each company’s subsequently filed Quarterly Reports on Form 10-Q or Current Reports on Form 8-K (excluding any information and exhibits furnished under Item 2.02 or 7.01 thereof), each of which are incorporated by reference into this joint proxy statement/prospectus. In addition, you are urged to carefully consider the following material risks relating to the mergers, the business of the combined company, the business of Ouster, and the business of Velodyne.

Risks Relating to the Mergers

The exchange ratio is fixed and will not be adjusted in the event of any change in either Ouster’s or Velodyne’s stock price.

Upon completion of the first merger, each share of Velodyne common stock outstanding immediately prior to the first merger will be converted into and become exchangeable for 0.8204 shares of Ouster common stock. This exchange ratio is fixed in the merger agreement and will not be adjusted for changes in the market price of either Ouster common stock or Velodyne common stock. The market prices of Ouster common stock and Velodyne common stock have fluctuated prior to and after the date of the announcement of the merger agreement and may continue to fluctuate from the date of this joint proxy statement/prospectus to the date of the Ouster special meeting and the Velodyne special meeting, respectively, and the date the first merger is consummated, and the market price of the common stock of the combined company may continue to fluctuate thereafter.

Because the value of the merger consideration will depend on the market price of Ouster common stock at the time the mergers are completed, Velodyne stockholders will not know or be able to determine at the time of the Velodyne special meeting the market value of the merger consideration they would receive upon completion of the first merger. Similarly, Ouster stockholders will not know or be able to determine at the time of the Ouster special meeting the market value of the shares of Ouster common stock to be issued pursuant to the merger agreement compared to the market value of the shares of Velodyne common stock that are being exchanged in the first merger.

Stock price changes may result from a variety of factors, including, among others, general market and economic conditions, changes in Ouster’s or Velodyne’s respective businesses, operations and prospects, reductions or changes in U.S. government spending or budgetary policies, market assessments of the likelihood that the mergers will be completed, interest rates, general market, industry and economic conditions and other factors generally affecting the respective prices of Ouster’s or Velodyne’s common stock, federal, state and local legislation, governmental regulation and legal developments in the industry segments in which Ouster or Velodyne operate, and the timing of the mergers.

Many of these factors are beyond Ouster’s and Velodyne’s control, and neither Ouster nor Velodyne are permitted to terminate the merger agreement solely due to a decline in the market price of the common stock of the other party. You are urged to obtain current market quotations for Ouster common stock and Velodyne common stock in determining whether to vote for the adoption of the merger agreement, or, in the case of the Ouster stockholders, whether to vote for the Ouster share issuance proposal and the Ouster reverse stock split proposal. In addition, see the section entitled “Comparison of Ouster and Velodyne Market Prices and Implied Value of Merger Consideration” of this joint proxy statement/prospectus.

 

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The mergers may be delayed or may not be completed and the merger agreement may be terminated in accordance with its terms, which could negatively impact Ouster and/or Velodyne.

The mergers are subject to a number of conditions that must be satisfied, some of which are beyond the control of Ouster and Velodyne, may not be satisfied or waived in a timely manner or at all, and, accordingly, the mergers may be delayed or not completed. These conditions include: the approval by Ouster stockholders of the Ouster share issuance proposal and approval by Velodyne stockholders of the Velodyne merger agreement proposal, approval for listing on the NYSE of the shares of Ouster common stock (including those to be issued pursuant to the merger agreement) (subject to official notice of issuance), the expiration or earlier termination of any applicable waiting period under U.S. antitrust and competition laws, the absence of governmental restraints or prohibitions preventing the consummation of the mergers, the effectiveness of the registration statement on Form S-4 registering the Ouster common stock issuable pursuant to the merger agreement and the absence of any stop order by the SEC with respect thereto. The obligation of each of Ouster and Velodyne to consummate the mergers is also conditioned on, among other things, the receipt by such party of a written opinion from counsel, to the effect that for U.S. federal income tax purposes the mergers, taken together, will qualify as a “reorganization” within the meaning of Section 368(a) of the Code (discussed further below), the absence of a material adverse effect on the other party, the truth and correctness of the representations and warranties made by the other party on the date of the merger agreement and on the closing date (subject to certain materiality qualifiers), and the performance by the other party in all material respects of its obligations under the merger agreement. No assurance can be given that the required consents and approvals will be obtained or that the required conditions to closing will be satisfied, and, if all required consents and approvals are obtained and the conditions are satisfied, no assurance can be given as to the terms, conditions and timing of such consents and approvals. Any delay in completing the mergers could cause the combined company not to realize, or to be delayed in realizing, some or all of the benefits that Ouster and Velodyne expect to achieve if the mergers are successfully completed within its expected time frame. For a more complete summary of the conditions that must be satisfied or waived prior to completion of the mergers, see the section entitled “The Merger Agreement—Conditions to the Completion of the Mergers” of this joint proxy statement/prospectus.

Additionally, either Ouster or Velodyne may terminate the merger agreement under certain circumstances, including, among other reasons, if the first merger is not completed by 11:59 p.m. Pacific Time on May 4, 2023 (which date may be extended by three months under certain circumstances if certain regulatory approvals are not obtained by May 4, 2023). In addition, if the merger agreement is terminated under certain circumstances specified in the merger agreement, either party may be required to pay the other party a termination fee of $7,000,000. See the section entitled “The Merger Agreement—Termination of the Merger Agreement” of this joint proxy statement/prospectus and the section entitled “The Merger Agreement—Termination Fees” of this joint proxy statement/prospectus for a more complete discussion of the circumstances under which the merger agreement could be terminated and when a termination fee may be payable by Ouster or Velodyne.

If the mergers are not completed for any reason, including as a result of a failure to obtain the required Ouster stockholder vote to approve the Ouster share issuance proposal or the required Velodyne stockholder vote to approve the Velodyne merger agreement proposal, the ongoing businesses of Ouster and Velodyne may be adversely affected and, without realizing any of the benefits of having completed the mergers, Ouster and Velodyne would be subject to a number of risks, including the following:

 

•

each company may experience negative reactions from the financial markets, including negative impacts on its stock price;

 

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each company may experience negative reactions from its suppliers, customers and employees;

 

•

each company will be required to pay their respective costs relating to the mergers, such as financial advisory, legal and accounting costs and associated fees and expenses, including, if applicable, a termination fee (with certain exceptions), whether or not the mergers are completed; and

 

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•

matters relating to the mergers (including integration planning) will require substantial commitments of time and resources by Ouster management and Velodyne management, which could otherwise have been devoted to day-to-day operations or to other opportunities that may have been beneficial to Ouster or Velodyne, as applicable, as an independent company.

The market price for shares of common stock of the combined company following the completion of the mergers may be affected by factors different from, or in addition to, those that historically have affected or currently affect the market prices of shares of Ouster common stock and Velodyne common stock.

Upon consummation of the mergers, Ouster stockholders and Velodyne stockholders will both hold shares of common stock in the combined company. The businesses of Ouster and Velodyne differ from each other, and, accordingly, the results of operations of the combined company will be affected by some factors that are different from those currently or historically affecting the results of operations of Ouster and Velodyne. For a discussion of the businesses of each of Ouster and Velodyne and some important factors to consider in connection with those businesses, please see the section entitled “Summary—The Parties to the Mergers” of this joint proxy statement/prospectus and the documents and information included elsewhere in this joint proxy statement/prospectus or incorporated by reference into this joint proxy statement/prospectus and listed under the section entitled “Where You Can Find More Information” of this joint proxy statement/prospectus.

The shares of common stock of the combined company to be received by Velodyne stockholders as a result of the first merger will have rights different from the shares of Velodyne common stock.

Upon consummation of the first merger, the rights of Velodyne stockholders, who will become stockholders of the combined company, will be governed by the amended certificate of incorporation and bylaws of the combined company. The rights associated with Velodyne common stock are different from the rights which will be associated with the common stock of the combined company. See the section entitled “Comparison of Stockholders’ Rights” of this joint proxy statement/prospectus for a discussion of these rights.

Ouster stockholders and Velodyne stockholders will each have reduced ownership and voting interest in the combined company as compared to ownership and voting interest in each of Ouster and Velodyne on a standalone basis.

Upon consummation of the first merger, each Ouster stockholder and each Velodyne stockholder will become a stockholder of the combined company with a percentage ownership of the combined company that is smaller than such stockholder’s percentage ownership of Ouster or Velodyne, as applicable, immediately prior to the first merger. As of the date of this joint proxy statement/prospectus, based on the exchange ratio and the estimated number of shares of common stock of Ouster and Velodyne that will be outstanding immediately prior to the completion of the first merger, including exercisable options, Ouster and Velodyne estimate that holders of shares of Ouster common stock as of immediately prior to the completion of the first merger will hold, in the aggregate, approximately 50% of the issued and outstanding shares of common stock of the combined company (based on fully diluted shares outstanding of the combined company including equity awards (using the treasury stock method)) immediately following the completion of the first merger, and holders of shares of Velodyne common stock as of immediately prior to the completion of the first merger will hold, in the aggregate, approximately 50% of the issued and outstanding shares of common stock of the combined company (based on fully diluted shares outstanding of the combined company including equity awards (using the treasury stock method)) immediately following the completion of the first merger. Because of this, each share of Ouster common stock and each share of Velodyne common stock will represent a smaller percentage ownership of the combined company than it represented in Ouster or Velodyne, respectively.

 

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Until the completion of the mergers or the termination of the merger agreement in accordance with its terms, Ouster and Velodyne are each prohibited from entering into certain transactions and taking certain actions that might otherwise be beneficial to Ouster or Velodyne and their respective stockholders.

From and after the date of the merger agreement and prior to completion of the mergers, the merger agreement restricts Ouster and Velodyne from taking specified actions without the consent of the other party and requires that the business of each company and its respective subsidiaries be conducted in all material respects in the ordinary course of business consistent with past practice. These restrictions may prevent Ouster or Velodyne from making appropriate changes to their respective businesses or organizational structures or from pursuing attractive business opportunities that may arise prior to the completion of the mergers, and could have the effect of delaying or preventing other strategic transactions. Adverse effects arising from the pendency of the mergers could be exacerbated by any delays in consummation of the mergers or termination of the merger agreement. See the section entitled “The Merger Agreement—Conduct of Business Prior to the Effective Time” of this joint proxy statement/prospectus.

Failure to attract, motivate and retain executives and other key employees could diminish the anticipated benefits of the mergers.

The success of the mergers will depend in part on the retention of personnel critical to the business and operations of the combined company due to, for example, their technical skills or management expertise. Current and prospective employees of Ouster and Velodyne may experience uncertainty about their future role with Ouster and Velodyne until strategies with regard to these employees’ roles in the combined company are announced or executed, which may impair Ouster’s and Velodyne’s ability to attract, retain and motivate key management, sales, marketing, technical and other personnel prior to and following the mergers. If Ouster and Velodyne are unable to retain personnel, including Ouster’s and Velodyne’s key management, who are critical to the successful integration and future operations of the companies, Ouster and Velodyne could face disruptions in their respective operations, loss of existing customers or loss of sales to existing customers, loss of key information, expertise or know-how, and unanticipated additional recruitment and training costs. In addition, the loss of key personnel could diminish the anticipated benefits of the mergers.

If key employees of Ouster or Velodyne depart, the integration of the companies may be more difficult and the combined company’s business following the mergers may be harmed. Furthermore, the combined company may have to incur significant costs in identifying, hiring and retaining replacements for departing employees and may lose significant expertise and talent relating to the business of each of Ouster or Velodyne, and the combined company’s ability to realize the anticipated benefits of the mergers may be adversely affected. In addition, there could be disruptions to or distractions for the workforce and management associated with activities of labor unions or integrating employees into the combined company. No assurance can be given that the combined company will be able to attract or retain key employees of Ouster and Velodyne to the same extent that those companies have been able to attract or retain their own employees in the past.

The mergers, and uncertainty regarding the mergers, may cause customers, suppliers or strategic partners to delay or defer decisions concerning Ouster and Velodyne and adversely affect each company’s ability to effectively manage their respective businesses.

The mergers will happen only if the stated conditions are met, including the relevant stockholder approvals, among other conditions. Many of the conditions are outside the control of Ouster and Velodyne, and both parties also have certain rights to terminate the merger agreement. Accordingly, there may be uncertainty regarding the completion of the mergers. This uncertainty may cause customers, suppliers, vendors, strategic partners or others that deal with Ouster or Velodyne to delay or defer entering into contracts with Ouster or Velodyne or making other decisions concerning Ouster or Velodyne or could cause such customers, suppliers, vendors, strategic partners or others to seek to change or cancel existing business relationships with Ouster or Velodyne, which could negatively affect their respective businesses. Any delay or deferral of those decisions or changes in

 

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existing agreements could have an adverse impact on the respective businesses of Ouster and Velodyne, regardless of whether the mergers are ultimately completed.

Whether or not the mergers are completed, the announcement and pendency of the mergers will divert significant management resources to complete the mergers, which could have an adverse effect on Ouster’s and Velodyne’s respective businesses, financial results, and/or market prices.

Whether or not the mergers are completed, the announcement and pendency of the mergers could cause disruptions in the businesses of Ouster and Velodyne by directing the attention of management of each of Ouster and Velodyne toward the completion of the mergers. Ouster and Velodyne have each diverted significant management resources in an effort to complete the mergers and are each subject to restrictions contained in the merger agreement on the conduct of their respective businesses in the period prior to the completion of the mergers. If the mergers are not completed, Ouster and Velodyne will have incurred significant costs, including the diversion of management resources, for which they will have received little or no benefit.

The directors and executive officers of Ouster and Velodyne have interests and arrangements that may be different from, or in addition to, those of Ouster and Velodyne stockholders generally.

When considering the recommendations of the boards of directors of Ouster or Velodyne, as applicable, with respect to the proposals described in this joint proxy statement/prospectus, stockholders should be aware that the directors and executive officers of each of Ouster and Velodyne have interests in the mergers that are different from, or in addition to, those of Ouster stockholders and Velodyne stockholders generally. These interests include the continued employment of certain executive officers of Ouster and Velodyne by the combined company, the continued service of certain directors of Ouster and Velodyne as directors of the combined company, the treatment in the mergers of outstanding equity, equity-based and incentive awards, severance arrangements, and other compensation and benefit arrangements, and the right to continued indemnification of former Ouster and Velodyne directors and officers by the combined company.

Ouster stockholders and Velodyne stockholders should be aware of these interests when they consider the recommendations of the respective Ouster and Velodyne boards of directors that they vote in favor of the Ouster share issuance proposal, in the case of Ouster, or that they adopt the merger agreement, in the case of Velodyne. The interests of Ouster’s directors and executive officers are described in more detail in the section entitled “Interests of Ouster’s Directors and Executive Officers in the Mergers” of this joint proxy statement/prospectus, and the interests of Velodyne’s directors and executive officers are described in more detail in the section entitled “Interests of Velodyne’s Directors and Executive Officers in the Mergers” of this joint proxy statement/prospectus.

Ouster or Velodyne may waive one or more of the closing conditions without re-soliciting stockholder approval.

Ouster or Velodyne may determine to waive, in whole or part, one or more of the conditions to its obligations to consummate the mergers. Ouster and Velodyne currently expect to evaluate the materiality of any waiver and its effect on Ouster and Velodyne stockholders, as applicable, in light of the facts and circumstances at the time to determine whether any amendment of this joint proxy statement/prospectus or any re-solicitation of proxies or voting cards is required in light of such waiver. Any determination whether to waive any condition to the mergers or as to re-soliciting stockholder approval or amending this joint proxy statement/prospectus as a result of a waiver will be made by Ouster and Velodyne, as applicable, at the time of such waiver based on the facts and circumstances as they exist at that time.

Each of Ouster and Velodyne will incur significant transaction, merger-related and restructuring costs in connection with the mergers.

Ouster and Velodyne have each incurred and expect to incur a number of non-recurring costs associated with combining the operations of the two companies, as well as transaction fees and other costs related to the

 

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mergers. These costs and expenses include fees paid to financial, legal and accounting advisors, facilities and systems consolidation costs, severance and other potential employment-related costs, including retention and severance payments that may be made to certain Ouster employees and Velodyne employees, filing fees, printing expenses and other related charges. Some of these costs are payable by Ouster or Velodyne regardless of whether the mergers are completed.

The combined company may also incur restructuring and integration costs in connection with the mergers. The costs related to restructuring will be expensed as a cost of the ongoing results of operations of either Ouster or Velodyne or the combined company. There are a large number of processes, policies, procedures, operations, technologies and systems that must be integrated in connection with the mergers and the integration of the two companies’ businesses. Although Ouster and Velodyne expect that the elimination of duplicative costs, strategic benefits, additional income and the realization of other efficiencies related to the integration of the businesses may offset incremental transaction, merger-related and restructuring costs over time, any net benefit may not be achieved in the near term or at all. While both Ouster and Velodyne have assumed that certain expenses would be incurred in connection with the mergers and the other transactions contemplated by the merger agreement, there are many factors beyond their control that could affect the total amount or the timing of the integration and implementation expenses.

Ouster stockholders and Velodyne stockholders will not be entitled to appraisal rights in the mergers.

Appraisal rights are statutory rights that, if applicable under law, enable stockholders of a corporation to dissent from an extraordinary transaction, such as a merger, and to demand that such corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to such stockholders in connection with the transaction. Under the DGCL, stockholders do not have appraisal rights if the shares of stock they hold are either listed on a national securities exchange or held of record by more than 2,000 holders. Notwithstanding the foregoing, appraisal rights are available if stockholders are required by the terms of the merger agreement to accept for their shares anything other than (a) shares of stock of the surviving corporation, (b) shares of stock of another corporation that will either be listed on a national securities exchange or held of record by more than 2,000 holders, (c) cash in lieu of fractional shares or (d) any combination of the foregoing.

Because the mergers are of Merger Sub I with and into Velodyne and of Velodyne with and into Merger Sub II, and holders of Ouster common stock may continue to hold their shares following completion of the mergers, holders of Ouster common stock are not entitled to appraisal rights in the mergers.

Because shares of Ouster common stock are listed on the NYSE, a national securities exchange, and because Velodyne stockholders are not required by the terms of the merger agreement to accept for their shares anything other than shares of Ouster common stock and cash in lieu of fractional shares, holders of Velodyne common stock will not be entitled to appraisal rights in the mergers. See the section entitled “No Appraisal Rights” of this joint proxy statement/prospectus.

If the mergers, taken together, do not qualify as a “reorganization” under Section 368(a) of the Code, U.S. holders of Velodyne common stock may be required to pay additional U.S. federal income taxes.

For U.S. federal income tax purposes, the mergers, taken together, are intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code. It is a condition to the completion of the mergers that each of Ouster and Velodyne receive an opinion from its counsel to the effect that the mergers, taken together, will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. Except where specifically discussed below, the discussion below assumes that the mergers will qualify for such tax treatment.

 

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Each such opinion will be based on customary assumptions and representations from Ouster and Velodyne, as well as certain warranties, covenants and undertakings by Ouster, Merger Sub I, Merger Sub II and Velodyne. If any such representations and assumptions or any other facts, representations, assumptions and exclusions set forth in such opinions is incorrect, incomplete or inaccurate, or is violated, the validity of the opinions described above may be affected and the tax consequences of the mergers could differ from those described in this joint proxy statement/prospectus.

See the section entitled “U.S. Federal Income Tax Consequences of the Mergers” of this joint proxy statement/prospectus for a more complete description of certain U.S. federal income tax consequences of the mergers. Please consult your tax advisors as to the specific tax consequences to you of the mergers.

Warrants and other shares underlying equity awards, could increase the number of shares eligible for future resale in the public market and result in dilution to the stockholders.

As of November 15, 2022, Ouster had outstanding publicly traded warrants exercisable for 15,999,900 shares of Ouster common stock at $11.50 per share, and Velodyne had (i) outstanding publicly traded warrants exercisable for 4,480,425 shares of common stock at $11.50 per share; and (ii) an outstanding private warrant owned by an affiliate of Amazon Inc., exercisable for up to 39,784,213 shares of common stock at $4.16 per share, 50% of which will vest at the effective time.

At the effective time, the Ouster Warrants will remain as the warrants exercisable for shares of Ouster common stock in accordance with the terms and conditions of the warrant agreements applicable to such Ouster Warrants. Each Velodyne Warrant will be converted into an Ouster Warrant with the same terms and conditions as applied to such Velodyne Warrant immediately prior to the effective time; however, such Ouster Warrant will cover a number of shares of Ouster common stock equal to the product of the number of shares of Velodyne common stock subject to the Velodyne Warrant and the exchange ratio and will have an exercise price per share equal to the amount obtained by dividing the per share exercise price of the Velodyne Warrant by the exchange ratio.

To the extent the trading price of Ouster common stock exceeds the applicable exercise price for the Ouster Warrants, the shares of Ouster common stock issued upon exercise of any of the Ouster Warrants will result in dilution to the then existing holders of Ouster common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of the Ouster common stock.

There can be no assurance that the Ouster Warrants outstanding after the mergers will be listed on the NYSE or other national exchange.

Ouster will use its reasonable best efforts to cause the Ouster Warrants to be issued in connection with the mergers in respect of Velodyne’s publicly traded warrants to be listed on the NYSE or other national exchange. However, such listing depends in part on the Ouster Warrants meeting the applicable exchange’s listing requirements. If the Ouster Warrants are not listed on a national exchange following the mergers, there would likely be a less liquid market for those securities.

Risks Relating to the Proposed Reverse Stock Split

The proposed reverse stock split may not increase Ouster’s stock price over the long-term.

One of the Ouster stockholder proposals is the Ouster reverse stock split proposal. The mergers are not conditioned on the adoption of this stockholder proposal. One of the purposes of the contemplated reverse stock split is to increase the per share market price of Ouster common stock in order to improve the status of Ouster common stock as an investment security and help ensure that Ouster complies with the continued listing

 

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requirements of the NYSE. It cannot be assured, however, that the contemplated reverse stock split, if effected, will accomplish these objectives for any meaningful period of time and that Ouster common stock will not be delisted from the NYSE in the future due to a failure to satisfy the NYSE’s minimum closing bid listing standard or other NYSE listing requirements. While it is expected that the reduction in the number of outstanding shares of Ouster common stock will proportionally increase the market price of Ouster common stock, it cannot be assured that the contemplated reverse stock split, if effected, will result in any permanent or sustained increase in the market price of Ouster common stock, which is dependent upon many factors, including the combined company’s business and financial performance, general market conditions and the combined company’s prospects for future success.

Failure to obtain approval of the Ouster reverse stock split proposal may increase the probability that Ouster common stock would be delisted from the NYSE in the future due to a failure to satisfy the NYSE’s minimum closing bid listing standard.

The proposed reverse stock split may decrease the liquidity of Ouster common stock.

Although the Ouster board of directors believes that the anticipated increase in the market price of Ouster common stock could encourage interest in Ouster common stock and possibly promote greater liquidity for its stockholders, such liquidity could also be adversely affected by the reduced number of shares outstanding after the contemplated reverse stock split, if effected. The reduction in the number of outstanding shares may lead to reduced trading and a smaller number of market makers for Ouster common stock.

The proposed reverse stock split may lead to a decrease in Ouster’s overall market capitalization.

Should the market price of Ouster common stock decline after the contemplated reverse stock split, if effected, the percentage decline may be greater, due to the smaller number of shares outstanding, than it would have been prior to the contemplated reverse stock split. The contemplated reverse stock split may be viewed negatively by the market and, consequently, may lead to a decrease in Ouster’s overall market capitalization. If the per share market price does not increase in proportion to the contemplated reverse stock split ratio, then the value of Ouster, as measured by its stock market capitalization, will be reduced. In some cases, the per-share stock price of companies that have effected reverse stock splits subsequently declined back to pre-reverse split levels, and accordingly, it cannot be assured that the total market value of Ouster common stock will remain the same after the contemplated reverse stock split is effected, or that the contemplated reverse stock split will not have an adverse effect on the stock price of Ouster common stock due to the reduced number of shares outstanding after the contemplated reverse stock split.

Risks Relating to the Combined Company

Combining the businesses of Ouster and Velodyne may be more difficult, costly or time-consuming than expected, and the combined company may fail to realize the anticipated benefits of the mergers, which may adversely affect the combined company’s business results and negatively affect the value of the common stock of the combined company following the mergers.

The success of the mergers will depend on, among other things, the ability of Ouster and Velodyne to combine their businesses in a manner that realizes cost savings and facilitates growth opportunities.

Ouster and Velodyne must successfully combine their respective businesses in a manner that permits these benefits to be realized. For example, the combined company may not have sufficient capital on hand or generated from operations to continue funding operations as anticipated. In addition, the combined company must achieve the anticipated growth and cost savings without adversely affecting current revenues and investments in future growth. If the combined company is not able to successfully achieve these objectives, the anticipated benefits of the mergers may not be realized fully, or at all, or may take longer to realize than expected.

 

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An inability to realize the full extent of the anticipated benefits of the mergers and the other transactions contemplated by the merger agreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, level of expenses and operating results of the combined company, which may adversely affect the value of the common stock of the combined company after the completion of the mergers.

In addition, the actual integration may result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be realized. Actual growth and cost savings, if achieved, may be lower than what Ouster and Velodyne expect and may take longer to achieve than anticipated. If Ouster and Velodyne are not able to adequately address integration challenges, they may be unable to realize the anticipated benefits of the integration of the two companies.

The failure to successfully integrate the businesses and operations of Ouster and Velodyne in the expected time frame may adversely affect the combined company’s future results.

Ouster and Velodyne have operated and, until the completion of the mergers, will continue to operate independently. There can be no assurances that their businesses can be integrated successfully. It is possible that the integration process could result in the loss of key Ouster employees or key Velodyne employees, the loss of customers, the disruption of either company’s or both companies’ ongoing businesses, inconsistencies in standards, controls, procedures and policies, unexpected integration issues, higher than expected integration costs and an overall post-completion integration process that takes longer than originally anticipated. Specifically, the following issues, among others, must be addressed in integrating the operations of Ouster and Velodyne in order to realize the anticipated benefits of the mergers so the combined company performs as expected:

 

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combining the companies’ operations and corporate functions;

 

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combining the businesses of Ouster and Velodyne and meeting the capital requirements of the combined company in a manner that permits the combined company to achieve any cost synergies and revenue growth of the combined company anticipated to result from the mergers, the failure of which would result in the anticipated benefits of the mergers not being realized in the time frame currently anticipated or at all;

 

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integrating personnel from the two companies;

 

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integrating and unifying the offerings and services available to customers;

 

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harmonizing the companies’ operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes;

 

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maintaining existing agreements with customers, distributors, providers and vendors and avoiding delays in entering into new agreements with prospective customers, distributors, providers and vendors;

 

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addressing possible differences in business backgrounds, corporate cultures and management philosophies;

 

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consolidating the companies’ administrative and information technology infrastructure;

 

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coordinating distribution and marketing efforts; and

 

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coordinating geographically dispersed organizations.

In addition, at times the attention of certain members of either company’s or both companies’ management and resources may be focused on completion of the mergers and the integration of the businesses of the two companies and diverted from day-to-day business operations or other opportunities that may have been beneficial to such company, which may disrupt each company’s ongoing business and the business of the combined company.

 

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The combined company may not be able to retain customers or suppliers or customers or suppliers may seek to modify contractual obligations with the combined company, which could have an adverse effect on the combined company’s business and operations. Third parties may terminate or alter existing contracts or relationships with Ouster or Velodyne.

As a result of the mergers, the combined company may experience impacts on relationships with customers and suppliers that may harm the combined company’s business and results of operations. Certain customers, licensors, business partners or suppliers may seek to terminate or modify contractual obligations following the mergers whether or not contractual rights are triggered as a result of the mergers. There can be no guarantee that customers and suppliers will remain with or continue to have a relationship with the combined company or do so on the same or similar contractual terms following the mergers. If any customers or suppliers seek to terminate or modify contractual obligations or discontinue the relationship with the combined company, then the combined company’s business and results of operations may be harmed. Furthermore, the combined company will not have long-term arrangements with many of its significant suppliers. If the combined company’s suppliers were to seek to terminate or modify an arrangement with the combined company, then the combined company may be unable to procure necessary supplies from other suppliers in a timely and efficient manner and on acceptable terms, or at all. Any of the aforementioned disruptions could limit the combined company’s ability to achieve the anticipated benefits of the mergers. The adverse effect of any such disruptions could also be exacerbated by a delay in the completion of the mergers or by a termination of the merger agreement.

There can be no assurance that the combined company will be able to comply with the continued listing standards of the New York Stock Exchange.

If the combined company fails to satisfy the continued listing requirements of the NYSE, such as the corporate governance requirements or the minimum share price requirement, NYSE may take steps to delist the combined company’s securities. Such a delisting would likely have a negative effect on the price of the securities and would impair stockholders’ ability to sell or purchase the securities when they wish to do so. In the event of a delisting, the combined company can provide no assurance that any action taken by it to restore compliance with listing requirements would allow the securities to become listed again, stabilize the market price or improve the liquidity of the securities, prevent the securities from dropping below the NYSE minimum share price requirement or prevent future non-compliance with NYSE’s listing requirements. Additionally, if the securities are not listed on, or become delisted from the NYSE, for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of the securities may be more limited than if the combined company were quoted or listed on the NYSE or another national securities exchange. Stockholders may be unable to sell their securities unless a market can be established or sustained.

The combined company may be exposed to increased litigation, which could have an adverse effect on the combined company’s business and operations.

The combined company may be exposed to increased litigation from stockholders, customers, suppliers, consumers and other third parties due to the combination of Ouster’s business and Velodyne’s business following the mergers. Such litigation may have an adverse impact on the combined company’s business and results of operations or may cause disruptions to the combined company’s operations.

The unaudited pro forma condensed combined financial information and certain financial forecasts included in this joint proxy statement/prospectus may not be indicative of what the combined company’s actual financial position or results of operations would have been or will be.

The unaudited pro forma condensed combined financial information included in this joint proxy statement/prospectus is presented solely for illustrative purposes and is not necessarily indicative of what the combined company’s actual financial position or results of operations would have been had the mergers been completed on

 

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the dates indicated. This unaudited pro forma condensed combined financial information reflects adjustments that were developed using preliminary estimates based on available information and various assumptions, and may be revised as additional information becomes available. Accordingly, the final acquisition accounting adjustments may differ materially from the pro forma adjustments reflected in this joint proxy statement/prospectus.

While presented with numeric specificity, the Ouster and Velodyne unaudited projected financial forecasts provided in this joint proxy statement/prospectus are based on numerous variables and assumptions (including, but not limited to, those related to industry performance and competition, general business, the lidar and related industries, and economic, market and financial conditions and additional matters specific to Ouster’s or Velodyne’s business, as applicable) that are inherently subjective and uncertain and are beyond the control of the respective management teams of Ouster and Velodyne. As a result, actual results may differ materially from the unaudited projected financial forecasts. Important factors that may affect actual results and cause these unaudited projected financial forecasts to not be achieved include, but are not limited to, risks and uncertainties relating to Ouster’s or Velodyne’s business, as applicable (including each company’s ability to achieve strategic goals, objectives and targets over applicable periods), industry performance, general business and economic conditions. See “The Mergers—Certain Financial Forecasts Utilized in Connection with the Mergers"

The combined company may be unable to retain Ouster and Velodyne personnel successfully after the mergers are completed.

The success of the mergers will depend in part on the combined company’s ability to retain the talents and dedication of the professionals currently employed by Ouster and Velodyne. It is possible that these employees may decide not to remain with Ouster or Velodyne, as applicable, while the mergers are pending, or with the combined company after the mergers are consummated. If key employees terminate their employment, or if an insufficient number of employees are retained to maintain effective operations, the combined company’s business activities may be adversely affected and management’s attention may be diverted from successfully integrating Ouster and Velodyne to hiring suitable replacements, all of which may cause the combined company’s business to suffer. In addition, Ouster and Velodyne may not be able to locate suitable replacements for any key employees that leave either company or to offer employment to potential replacements on reasonable terms.

Third parties may terminate or alter existing contracts or relationships with Ouster or Velodyne.

Velodyne has contracts with customers, suppliers, vendors, landlords, licensors and other business partners which may require Velodyne to obtain consent from these other parties in connection with the mergers. If these consents cannot be obtained, the combined company may suffer a loss of potential future revenue and may lose rights that are material to Velodyne’s business and the business of the combined company. In addition, third parties with whom Ouster or Velodyne currently have relationships may terminate or otherwise reduce the scope of their relationship with either party in anticipation of the mergers. Any such disruptions could limit the combined company’s ability to achieve the anticipated benefits of the mergers. The adverse effect of such disruptions could also be exacerbated by a delay in the completion of the mergers or the termination of the merger agreement.

The combined company is subject to risks arising from the ongoing COVID-19 pandemic.

The ongoing COVID-19 pandemic has impacted each of Ouster’s and Velodyne’s businesses and Ouster and Velodyne expect it to continue to impact the combined company’s business. Governments and businesses have taken, and may continue to take, unprecedented measures in response to the COVID-19 pandemic. Such measures have included restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelter-in-place orders. The COVID-19 pandemic has caused significant volatility and disruption in global financial markets.

The extent to which the COVID-19 pandemic will impact the combined company is highly uncertain and is difficult to predict. The pandemic’s effects and their extent will depend on various factors, including, but not

 

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limited to, the duration, scope and impact of the pandemic, restrictions on business and social distancing guidelines that may be requested or mandated by governmental authorities and how quickly and to what extent normal economic and operating conditions can resume. Relevant adverse consequences of the pandemic could include reduced liquidity, increased volatility of the combined company’s stock price, operational disruption or failure due to spread of disease within the combined company or due to restrictions on business and social distancing guidelines imposed or requested by governmental authorities, unavailability of raw materials, disruption in the supply chain and increased cybersecurity and fraud risks due to increased online and remote activity, as well as the adverse consequences of a macroeconomic slowdown, recession or depression.

Even after the COVID-19 pandemic has subsided, the combined company may continue to experience adverse impacts to its business as a result of the global economic impact of the COVID-19 pandemic, including reduced availability of credit, adverse impacts on liquidity and the negative financial effects from any recession or depression that may occur.

Risks Relating to Ouster’s Business

Ouster’s business will continue to be subject to the risks described in the sections entitled “Risk Factors” in Ouster’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, in Ouster’s Quarterly Report on Form 10-Q for the quarterly periods ended June 30, 2022 and September 30, 2022, and in other documents incorporated by reference into this joint proxy statement/prospectus. See the section entitled “Where You Can Find More Information” of this joint proxy statement/prospectus for the location of information incorporated by reference into this joint proxy statement/prospectus.

Risks Relating to Velodyne’s Business

Velodyne’s business will continue to be subject to the risks described in the sections entitled “Risk Factors” in Velodyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, in Velodyne’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022 and in other documents incorporated by reference into this joint proxy statement/prospectus. See the section entitled “Where You Can Find More Information” of this joint proxy statement/prospectus for the location of information incorporated by reference into this joint proxy statement/prospectus.

 

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