Gossamer Bio Inc

This proposal asks stockholders to authorize, under Nasdaq Listing Rule 5635(d), the potential issuance of shares of Common Stock upon (a) conversion of up to $72.0 million of newly issued 7.50% secured first‑lien convertible notes due 2030 and associated make‑whole payments in stock, and (b) exercise of 135,789,000 Purchase Warrants. Management is seeking shareholder approval because Nasdaq rules require stockholder consent before a non‑public transaction could result in issuance equal to 20% or more of previously outstanding shares at a price below prescribed thresholds; absent approval the Company would be required to settle conversions and warrant exercises in cash. The proposal is conditioned on the authorized share increase in Proposal No. 3 because sufficient authorized shares must exist to permit settlement in stock. Contextually, the request arises from the Exchange Offer that exchanged the Company’s existing convertible notes for a package of new secured notes, equity securities and warrants to address near‑term debt obligations and strengthen the balance sheet, but which causes substantial dilution if settled in stock. If approved, the Company would gain flexibility to preserve cash by electing stock settlement in accordance with the New Convertible Notes Indenture and warrant terms, but stockholders would face meaningful potential dilution (the filing estimates up to ~550.6 million shares upon full conversion assuming 100% participation and make‑whole shares). If not approved (or if Proposal No. 3 fails), the Company would be obliged to satisfy conversion and warrant obligations in cash, which could materially strain liquidity and operations and increase insolvency risk. The Board evaluated the Company’s financial condition, alternatives, and the benefits of optional stock settlement and concluded that the proposal is in the Company’s and stockholders’ best interests, recommending a “FOR” vote. Given the magnitude of potential dilution, sophisticated investors should weigh the tradeoff between avoiding immediate cash outflows and the long‑term dilution and governance impacts on existing holders, and note the voting agreements from Existing Noteholders representing a large majority of outstanding notes that make shareholder approval more likely.

This management proposal requests shareholder approval of an amendment and restatement of the Company’s 2019 Incentive Award Plan to materially increase the shares available for new awards, including (i) rolling in the existing reserve, (ii) a one‑time post‑Closing increase equal to 10% of Post‑Transaction Fully‑Diluted Shares Outstanding, (iii) an extended 10‑year term to 2036, and (iv) an annual evergreen increase (up to 5% of fully‑diluted shares each January 1 through 2036). Management seeks approval because the early settlement of the Exchange Offer created substantial dilution and depleted the available awards pool such that, without an increase, the company would have limited capacity to grant competitive equity awards necessary for retention and recruitment. Approval is conditioned on Proposal No. 3 (authorized share increase) because the Restated Plan requires sufficient charter authorization to be effective. The Board emphasizes that equity incentives are a key retention and alignment tool and that the proposed reserve (estimated at approximately 77 million additional shares on a 100% participation basis) is reasonable given historical burn rates and competitive practice; the Board also considered potential overhang and dilution metrics before recommending approval. If shareholders approve, the Company can continue to grant options, RSUs, PSUs and other awards to employees, consultants and directors to align pay with performance; if not approved, the Restated Plan would not be effective and the Company may be forced to rely on a diminished prior reserve, impairing compensation competitiveness. The proposal also preserves the ability to grant incentive stock options (ISOs) and contains customary terms (clawback, adjustment provisions, change‑in‑control treatment, repricing authority subject to limits in Plan). Sophisticated investors should consider the magnitude of the reserve increase in light of pro‑forma ownership changes from the Exchange Offer, the plan’s evergreen feature that can enlarge the pool over time, and the dilutive impact relative to retention benefits and the Company’s need to conserve cash.

This proposal asks stockholders to approve a charter amendment increasing authorized common shares from 700 million to 4.0 billion to accommodate share issuances relating to the Exchange Offer (including New Convertible Notes conversion make‑whole shares, Purchase Warrants exercise, and shares reserved under the Restated Plan) and to preserve flexibility for future capital and corporate purposes. Management seeks approval because, after early settlement of the Exchange Offer and potential full participation, the Company lacks sufficient charter authorization to issue the shares necessary to satisfy conversion and warrant settlement in stock and to implement the enlarged equity incentive reserve; if not approved, Proposals 1 and 2 are effectively blocked or conditioned and the Company would be required to satisfy conversion and warrant obligations in cash, potentially harming liquidity. The Board concluded that the increase is necessary and advisable to provide financial and operational flexibility, enable stock settlement options, and avoid the delay and expense of subsequent charter amendments; it recommends voting “FOR.” From a governance and dilution perspective, investors should note that the increase substantially raises the potential pool of outstanding shares and could materially dilute existing holders if conversions and exercises occur — the proxy provides pro‑forma dilution scenarios showing Existing Noteholders could hold a majority post‑transaction. The proposal is routine under Delaware law for amendment adoption yet central to enabling the Exchange transaction and the Restated Plan, so its approval is pivotal to the overall financing and restructuring strategy.

This proposal would authorize the Board to effect, if and when it determines appropriate, a reverse stock split from among 15 specified ratios (1‑for‑10 through 1‑for‑150) with alternative corresponding adjustments depending on whether the share increase in Proposal 3 is approved, for a total of 30 alternate charter amendments. Management seeks this authority to preserve flexibility to cure Nasdaq minimum bid price noncompliance (the Company received a notice for bid price below $1.00 and faces an initial cure period), to potentially improve market perception and institutional investor eligibility, and to provide a tool for optimizing the share price for trading and financing purposes. Approval does not obligate the Board to implement a split; rather it gives the Board discretion to choose a single ratio later based on market conditions, liquidity, listing considerations, and strategic needs. If implemented, the reverse split would proportionately reduce outstanding shares and the number of authorized shares and adjust exercise and conversion prices of outstanding options, warrants and convertible securities; fractional shares would be rounded up to nearest whole share as described. Risks include that a reverse split may not produce a sustained per‑share price increase, could reduce trading liquidity, could produce odd‑lot holdings, and may be viewed negatively by some investors. The Board weighed these factors against Nasdaq compliance imperatives and recommended approval to preserve listing and financing flexibility; stockholders should assess the split’s possible effect on liquidity, dilution mechanics, and whether the board’s retained discretion is acceptable.

This proposal seeks shareholder authorization to allow the Board to adjourn and reconvene the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes at the scheduled meeting to approve the other proposals. Management is requesting this procedural authority because the Company faces multi‑proposal votes that are interdependent (notably Proposals 1 and 2 depend on approval of Proposal 3) and securing a sufficient number of votes is critical to implementing the Exchange Offer and related corporate actions; an adjournment prevents need for a new special meeting and provides time to solicit and obtain additional votes. The Board notes that abstentions and broker non‑votes have specified effects on outcomes and that certain proposals are routine (broker discretionary voting differs), so adjournment authority is a standard corporate governance tool to manage timing and vote accumulation. If approved, the Board may adjourn for up to 30 days without further notice as permitted by law, or longer with notice; if not approved, the Company would lack flexibility to adjourn to obtain additional votes and could be forced to accept failure of proposals at the meeting date. The Board recommends a “FOR” vote as a prudent procedural measure to enable orderly consideration of the other critical proposals related to the Exchange Offer.