Smartbird Inc

This management proposal requests shareholder approval to amend the Company’s 2021 Equity Incentive Plan by adding 3,500,000 shares to the plan reserve. Management frames the amendment as necessary to continue using equity as a key tool for recruitment, retention, and alignment of employees and non-employee directors with stockholder interests, particularly as the Company seeks to conserve cash and expects to rely on equity compensation. The Board and Compensation Committee considered historical burn rate (three-year average ~5.3%), the current overhang (26%), and projected overhang increase to ~55.3% if approved, concluding the additional reserve would support anticipated grants for approximately three years under historical practices. The proposal highlights plan mechanics such as the types of awards permitted (options, SARs, RSAs, RSUs, performance awards), automatic annual reserve increases, and anti-dilution and change-in-control provisions. Approval requires a majority of votes cast (excluding abstentions and broker non-votes). Key governance considerations include potential dilution to existing holders, the Company’s stated intent to file an S-8 for the new shares, and the Board’s view that without approval it may need to increase cash compensation, which could inhibit alignment with stockholders. For sophisticated evaluation, note the plan grants the administrator broad discretion over award terms and repricing, includes customary change-in-control and clawback provisions, and preserves Board ability to adjust annual automatic increases. The Board recommends a FOR vote, citing talent and retention needs, while investors should weigh the dilution implications (material increase to overhang) against the Company’s capital-conserving strategy and hiring plans.

This management proposal asks shareholders to approve the issuance of Class A common stock upon conversion of certain senior secured Convertible Notes in amounts that could exceed Nasdaq’s 19.99% threshold, thereby satisfying Nasdaq Listing Rule 5635(d). The Convertible Notes facility (up to $100 million aggregate) carries features that materially impact equity dilution dynamics: a significant original-issue discount, a 12% annual interest payable in shares or cash, conversion prices ($2.988 for initial $50M tranches and $4.00 for the Amendment Convertible Notes) with an alternate conversion mechanism tied to a discount to recent VWAP, anti-dilution protections that reprice conversion prices downward if the company issues shares at lower prices, and a Floor Price mechanism that can decline over time. Conversions are subject to a beneficial ownership limitation (default 4.99% per holder, up to 9.99% at holder option with notice) which constrains immediate single-holder concentration but does not eliminate aggregate dilution risk. The Board frames approval as necessary to permit equity conversion that preserves liquidity and supports the company’s pivot to AI infrastructure and acquisition of Electronics Assets; without approval the Company may have to repay notes in cash, potentially harming liquidity. The proposal discloses substantial potential dilution scenarios (e.g., conversion of $50M could issue ~16.7M shares, increasing outstanding Class A to ~26.0M shares in the illustrative table) and warns that issuance could materially dilute voting and economic rights and depress EPS and book value per share. From a governance and investor lens, important considerations include the broad anti-dilution provisions, the Default Rate and redemption mechanics on events of default, the covenants restricting certain corporate actions, registration rights granted to noteholders, and the Company’s representation that approval is sought to comply with Nasdaq rather than to renegotiate underlying economic terms. The Board recommends FOR because it assesses that conversion flexibility is in the Company’s best interest to conserve cash and execute its strategic plan, but investors should weigh the company’s liquidity needs against the significant and potentially material dilution and repricing risks inherent in the Convertible Notes’ terms.

This management proposal seeks shareholder authorization to adjourn the Annual Meeting, if necessary, to solicit additional proxies to obtain sufficient votes to approve the Company’s proposals or to achieve a quorum. Management argues this is a practical governance tool to avoid repeated meetings and to allow outreach to stockholders whose proxies are not yet supportive or who have not voted. The proposal explicitly permits the Company to solicit proxies from stockholders who previously voted against proposals and to adjourn without taking a vote on the proposals if doing so is necessary to solicit further support. While standard, the tactic may be viewed by some investors as a mechanism to circumvent an immediate shareholder rejection; it can be used either to pursue constructive engagement or to delay outcomes until a favorable vote can be secured. Key considerations include the potential cost and procedural delays associated with additional solicitation, the Company’s stated intent to use the extra time to persuade dissenting stockholders, and the Board’s affirmation that bylaws already permit adjournment by the chair. The Board recommends FOR to preserve flexibility in completing the meeting should vote totals be insufficient at the scheduled time, but investors should consider whether the Company’s use of adjournment rights would meaningfully improve informed shareholder deliberation or primarily serve management’s interests in securing approval.