Decoy Therapeutics Inc

This proposal asks stockholders to approve, under Nasdaq Listing Rules 5635(b) and 5635(d), the issuance of shares of common stock upon exercise of three series of milestone-based warrants issued in a June 29, 2026 private placement. The Milestone Warrants are structured to become exercisable only after stockholder approval and are tied to clinical milestones and a stockholder approval date; if exercised in full for cash the Company would receive up to approximately $17.5 million in additional gross proceeds. Management negotiated exercise prices and ownership limits (4.99% default beneficial ownership cap, electable to 9.99% by the holder) and provided for cash or cashless/stock-settlement mechanics if resale registration is not effective. Nasdaq rules require this approval because the aggregate securities issued in the transaction, including warrants, exceed certain thresholds and include value attributable to warrants that was not paid at closing. The Board’s rationale emphasizes the need for additional capital to fund clinical advancement and concludes the private placement and warrant structure were the best available alternatives given the Company’s cash position and financing options. Key shareholder considerations include material potential dilution (up to ~2.96 million additional shares based on current numbers), the timing and likelihood of the milestone triggers, and the potential market impact of resale of Warrant Shares. The Registration Rights Agreement and other contractual protections mitigate some resale timing risk but also require the Company to pursue registration, with liquidated damages for delays. A failure to approve would leave the warrants non-exercisable, deprive the Company of potential funding, and obligate the Company to continue holding repeated stockholder meetings until approval or warrant expiration, with attendant costs. Overall, the proposal is a financing-enabling measure with clear benefits for the Company’s funded runway but with significant dilution and market-price risk that shareholders must weigh against the Company’s capital needs and prospects for achieving the clinical milestones.

This proposal seeks stockholder approval to amend the Certificate of Incorporation to decrease the number of authorized common shares from 100,000,000 to 90,000,000. Management frames the change as a defensive and housekeeping action intended to reduce the pool of authorized but unissued shares that could be used in ways that dilute existing holders or make hostile change-of-control attempts easier. The Board evaluated the Company’s near-term capital needs and concluded that 90,000,000 authorized shares will provide adequate flexibility for foreseeable financings, equity compensation and corporate purposes. Opposing considerations include the potential need to raise additional equity beyond what 90 million authorized shares permits, which would require a future stockholder vote and could delay financings or equity issuances, and the administrative burden and uncertainty associated with seeking to increase authorized shares later. The amendment will not change outstanding shares, par value, or holders’ rights; it becomes effective upon filing with the Delaware Secretary of State. The Board’s unanimous recommendation to approve reflects a judgment balancing limiting theoretical dilution against maintaining sufficient authorized capacity for expected needs. For investors, the practical impact is limited immediately (no change to outstanding shares) but could constrain large-scale equity issuances unless shareholders later approve an increase. Shareholders should consider whether the reduced authorized share pool aligns with anticipated financing plans and whether they prefer the company to retain a larger authorized cushion to enable faster access to equity capital if needed.

The adjournment proposal requests authority for the Board or meeting chair to adjourn the Special Meeting to permit further solicitation of proxies if votes are insufficient to approve the material proposals (notably the Warrant Exercise and Authorized Share proposals). This is a routine procedural proposal that provides management with the ability to extend the solicitation period without holding a new meeting, thereby reducing transactional friction and the costs of repeatedly convening meetings. If approved, previously submitted proxies remain revocable, and management can use the additional time to communicate with institutional holders or other stakeholders to address concerns and obtain the necessary majority. The need for this authority is underscored by the Warrant Exercise Proposal’s characterization as a non-routine Nasdaq-related item where broker non-votes could be significant; adjournment gives management a path to secure approval if broker non-votes prevent an immediate result. Opposing considerations are limited: adjourning the meeting could delay resolution and prolong uncertainty for shareholders and the Company, and permit further persuasion by management, which some shareholders may dislike. The Board recommends the adjournment authority to protect shareholder value by enabling the Company to obtain necessary approvals efficiently while minimizing the cost and disruption of repeated special meetings. Shareholders should view this as a standard protective measure that facilitates the Company’s ability to complete the financing-related approval process if initial votes are inconclusive.