LandBridge Corp

Current report

Risks Related to the Conversion and Redomestication

Current report

We may fail to realize the anticipated benefits of the Conversion and Redomestication or those benefits may take longer to realize than expected, which could have a material and adverse impact on the trading price of our securities.

Current report

We believe that the Conversion and Redomestication will, among other things, improve trading liquidity, expand our global investor base and drive greater value for all of our shareholders over time. However, the level of investor interest in our Common Stock may not meet our expectations. For example, benchmark stock indices may change their eligibility requirements in a manner that is adverse to us or otherwise determine not to include our Common Stock. Moreover, even if we succeed in having our shares included in key stock indices, this may not result in the increased demand for our stock that we anticipate. Consequently, we may fail to realize the anticipated benefits of the Conversion and Redomestication or those benefits may take longer to realize than we expect. Our failure to achieve the anticipated benefits of the Conversion and Redomestication at all or in a timely manner, or a failure of any benefits realized to offset its costs, could have a material and adverse impact on the trading price of our securities.

Current report

Our Certificate of Formation includes certain provisions that could increase costs to bring a claim, discourage claims, limit the ability of our shareholders to bring a claim, limit the ability of our shareholders to bring a claim in a judicial forum viewed by the shareholders as more favorable for disputes with us or our directors, officers, or other employees and affect the procedures, rights and remedies available to our shareholders in bringing such claims.

Current report

Our Certificate of Formation (the “Charter”) contains a section (the “Forum Selection Provision”) that provides that, unless we consent in writing to the selection of an alternative forum, the Texas Business Court in the Eleventh Business Court Division of the State of Texas (the “Texas Business Court”) will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a claim for or based on a breach of fiduciary duty owed by any of our current or former directors, officers, other employees to us or our shareholders, including any claim alleging a conspiracy to breach a fiduciary duty, knowing participation in a breach of a fiduciary duty, or aiding and abetting a breach of fiduciary duty; (3) any action asserting a claim against us or any current or former director or officer or other employee of ours arising pursuant to any provision of the Texas Business Organizations Code (the “TBOC”) or our Charter or Bylaws; (4) any action to interpret, apply, enforce or determine the validity of our Charter or Bylaws; (5) any action asserting a claim relating to or involving us that is governed by the internal affairs doctrine; (6) any other action asserting an “internal entity claim” as that term is defined in the TBOC; or (7) any other action within the jurisdiction of the Texas Business Court, including any claims within the supplemental jurisdiction of the Texas Business Court (each, an “Internal Dispute”).

Current report

The selection of the Texas Business Court as the exclusive forum for Internal Disputes may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees. Except to the extent that we consent in writing, or a court of competent jurisdiction determines in a final and unappealable judgment, that an Internal Dispute is not subject to the sole and exclusive venue and forum or jurisdiction of the Texas Business Court or arbitration (as described further below), a shareholder will not be permitted to litigate an Internal Dispute in federal court or in any state court other than the Texas Business Court, and will not be able to avail itself of any potential advantages or potential protections of such other forums, other than with respect to any complaint asserting a cause of action arising under the Securities Act or the Exchange Act. Our Charter provides that, to the fullest extent permitted by applicable law, the United States District Court for the Southern District of Texas, Houston Division (the “Federal Court”) will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act or the Exchange Act. Any person or entity holding or purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to these provisions and the personal jurisdiction and venue of the Business Court, the Federal Court and the state district court of Texas situated in Harris County (the “Harris County Court”).

Current report

Further, our Charter provides that, to the fullest extent permitted by law, to the extent a court of competent jurisdiction determines in a final and unappealable judgment that an Internal Dispute is not subject to the exclusive jurisdiction of the Texas Business Court (such dispute, an “Other Dispute”), such Other Dispute will be exclusively and finally settled by arbitration under the Expedited Procedure Provisions of the Rules of the International Chamber of Commerce and governed by the Texas Arbitration Act. The Charter additionally provides that the place of arbitration shall be Houston, Texas and judicial review of the tribunal’s award must be brought in the Texas Business Court. The governing law of such Other Dispute would be the federal law of the United States or the law of the State of Texas, as applicable to the issues raised in the Other Dispute. If a court declines to transfer an Internal Dispute to the Business Court, but such court is later held not to have personal or subject matter jurisdiction with respect to such Internal Dispute, the arbitration provision would not be triggered because such action would be required to be dismissed and subsequently brought in a court of competent jurisdiction.

Current report

Given the unsettled nature of the law in this area, there is some risk that a court that has denied a motion to transfer an Internal Dispute to the Texas Business Court pursuant to the Forum Selection Provision would also deny a motion to compel arbitration of such Other Dispute pursuant to the Forum Selection Provision. Accordingly, the Forum Selection Provision further provides that, if the arbitration provisions in our Charter are determined to be unenforceable, the exclusive forum for such disputes will be the Federal Court or, if it lacks jurisdiction, the Harris County Court.

Current report

Regardless of the forum, venue or procedures selected for an Internal Dispute or Other dispute, our Charter provides that Internal Disputes and Other Disputes must be brought only as an individual action or derivative proceeding, and, to the fullest extent permitted by law, may not be brought as a class action, mass action, or other form of collective action, and may not be consolidated or joined, in whole or in part, consistent with the Texas Rules of Civil Procedure. However, we may, at our sole option, elect to seek consolidation or joinder of matters as consistent with the Texas Rules of Civil Procedure or Expedited Procedure Provisions of the Rules of the International Chamber of Commerce, respectively.

Current report

In addition, our Charter provides that, unless we consent in writing to a jury trial, we and each of our shareholders, directors and officers irrevocably and unconditionally waive any right we or it may have to a trial by jury in any legal action, proceeding, cause of action, cross-claim or counterclaim concerning any “internal entity claim” as that term is defined in Section 2.115 of the TBOC. Our Charter additionally provides that each shareholder agrees that such shareholder’s holding or acquisition of shares of our stock or, to the extent permitted by law, options or rights to acquire shares of our stock, constitutes such shareholder’s intentional and knowing waiver of any right to trial by jury with respect to such claims. This provision is designed to prevent a shareholder from requesting that a jury decide disputed issues of fact and may discourage lawsuits against us and our directors, officers, and other employees.

Current report

These dispute resolution rules, as well as the arbitration rules (to the extent they will apply), are different from the procedural rules that would normally apply to the litigation of Internal Disputes in state or federal court. They may prevent a shareholder from availing itself of the procedural protections that would be available under litigation in state or federal court and may render available or affect adversely the rights and remedies available to shareholders in such proceedings. Particularly in the case of arbitration, including its prohibition on class or collective actions, these dispute resolution rules may also result in greater costs being imposed on shareholders to litigate Internal Disputes, and in some cases involving lower amounts in controversy, the additional costs that may be imposed on shareholders to litigate Internal Disputes could exceed the potential recovery from such litigation.

Current report

Although we maintain that our Charter, including the Forum Selection Provision, accords with the law and is enforceable, it is possible that one or more provisions of our Charter, including those regarding the exclusive forum for Internal Disputes, mandatory arbitration for Other Disputes, or waiver of the right to proceed on class, mass, or collective basis, may be found by a court to be inapplicable or unenforceable. In addition, the mandatory arbitration provision in our Charter could be subject to litigation or regulatory scrutiny, which could result in the provision being enjoined or additional costs or uncertainty. In such case, we may incur additional costs or delays associated with resolving such actions, including in other jurisdictions, which could adversely affect our business, financial condition, or results of operations.

Current report

Additionally, our Charter provides that we affirmatively elect to be governed by Section 21.419 of the TBOC and any successor provision thereto. Section 21.419 sets forth certain presumptions concerning compliance by directors and officers with respect to their duties to a corporation, including the duty of care and duty of loyalty. Specifically, in taking or declining to take any action on any matters of a corporation’s business, Section 21.419 provides that a director or an officer is presumed to have acted (i) in good faith, (ii) on an informed basis, (iii) in furtherance of the interests of the corporation and (iv) in obedience to the law and the corporation’s governing documents. These provisions are described as codifying the “business judgment rule.” In order to succeed in a cause of action against a director or an officer, the Company or a shareholder pursuing such an action must rebut one or more of the foregoing presumptions and prove with particularity the director’s or officer’s act or omission constituted a breach of duty as a director or officer and that such breach involved fraud, intentional misconduct, an ultra vires act or a knowing violation of law.

Current report

Our Charter further provides that at any time that we have any series of common stock listed on a national securities exchange (as defined in the TBOC) or have 500 or more shareholders, no shareholder (as defined in the TBOC) may institute or maintain a derivative proceeding in our right unless such shareholder, at the time the derivative proceeding is instituted, holds at least three percent of the outstanding shares of our common stock.

Current report

These provisions of our Charter may increase costs to bring a claim, discourage claims, limit a shareholder’s ability to bring a claim, limit a shareholder’s ability to bring a claim in a judicial forum that such shareholder finds favorable for disputes with us or our directors, officers, or other employees and affect the procedures, rights and remedies available to our shareholders in bringing such claims. Alternatively, if a court were to find any of the provisions contained in our Charter to be inapplicable or unenforceable in an action, we could incur additional costs associated with resolving such actions, which could adversely affect our results of operations, cash flows and financial position.

Current report

Our Charter imposes minimum stock ownership and solicitation requirements on shareholders seeking to submit proposals for shareholder approval, which could limit the ability of our shareholders to bring matters before a meeting of shareholders.

Current report

Our Charter provides that we affirmatively elect to be governed by Section 21.373 of the TBOC, including the requirement that, except with respect to director nominations and procedural resolutions ancillary to the conduct of the shareholders’ meeting, to submit a proposal on a matter to the shareholders for approval at a meeting of the shareholders, a shareholder or group of shareholders must satisfy specified ownership, holding period and solicitation requirements. Under these provisions, a shareholder or group of shareholders must (in addition to the other requirements of our Charter and Bylaws): (i) hold an amount of our voting shares (as defined in the TBOC), determined as of the date of submission of the proposal, equal to the greater of at least: $1,000,000 in market value or three percent of our voting shares; (ii) hold such shares for a continuous period of at least six months before the date of the meeting and throughout the entire duration of the meeting; and (iii) solicit the holders of shares representing at least 67% of the voting power of shares entitled to vote on the proposal. These requirements apply during any time that (i) our principal office is located in the State of Texas or (ii) we are admitted to listing on a stock exchange that (A) has its principal office in the State of Texas and (B) has received approval by the securities commissioner of the State of Texas under Subchapter C, Chapter 4005, Government Code of the State of Texas. As of the date of this report, these requirements are applicable. These requirements are more restrictive than the requirements that would otherwise apply absent such a Charter provision and may make it more difficult, or in some cases impracticable, for shareholders to submit proposals for consideration at a shareholders’ meeting. As a result, our shareholders may have fewer opportunities to present proposals for shareholder approval, even on matters they believe are important, which could limit shareholder influence over corporate governance and other matters. Section 21.373 of the TBOC was enacted in 2025 and, while its enforceability has not yet been challenged in court and we do not have any material concerns related to enforceability or Section 21.373 or the related charter provision, like many new laws, we expect the enforceability of Section 21.373 will eventually be challenged.