Kustom Entertainment Inc

This proposal asks shareholders to grant a very large increase in the company’s authorized share capital, from 23.33 million to 1.2 billion total shares (1.0 billion common, 200 million preferred). Management frames the increase as a strategic flexibility measure: to enable issuances for acquisitions, opportunistic financings (including the Proposed Offering tied to the TFL acquisition), and equity incentives for employees and directors. The Board emphasizes the need to reserve a large pool of unissued shares to avoid delays and costs of calling special meetings for future issuances tied to corporate growth or strategic transactions. Approving the amendment will materially expand the company’s share issuance capacity and therefore create potential dilution risk for existing holders; management acknowledges the dilutive effect but argues it is necessary to support the pending strategic acquisition and related financing. The proxy highlights that the preferred share authorization creates a “blank check” vehicle that the Board can use to structure financings or rights with tailored preferences, which carries both flexibility and anti-takeover implications. The Board says it has no present intent to use the additional shares for anti-takeover purposes but notes the availability could in practice make hostile takeovers more difficult or dilutive. From a governance standpoint, stockholders should weigh the near-term transactional benefits (funding the acquisition, satisfying Nasdaq listing requirements, enabling compensation plans) against longer-term dilution and potential uses of broad preferred share powers. The Board recommends a FOR vote principally to facilitate the Acquisition and Offering and to preserve strategic optionality; stockholders should consider appropriate guardrails (e.g., shareholder approval thresholds) when evaluating the risk of future dilution or misuse.

This management proposal requests shareholder approval under Nasdaq Rule 5635(a) to permit the Company to issue shares representing 20% or more of the outstanding common stock as consideration for the Unit Purchase Agreement to acquire TFL. Management is seeking the vote because Nasdaq requires shareholder approval before a Nasdaq-listed company issues more than 20% of its shares in connection with an acquisition; absent approval the Acquisition likely cannot close on the proposed terms. The proxy materials disclose the proposed aggregate purchase consideration is roughly $112 million (about $89.6 million cash and $22.4 million in stock), and that issuance of the Stock Consideration will exceed the Nasdaq 20% threshold, so approval is procedural but critical to consummation. The board recommends FOR because it believes the Acquisition materially improves the company’s strategic prospects, was vetted with a fairness opinion, and because compliance with Nasdaq rules is necessary to avoid delisting or transaction failure. From an investor perspective the vote authorizes a significant dilutive issuance; stockholders should evaluate the valuations and whether the Acquisition consideration is justified relative to TFL’s forecasts and pro forma capital structure. The materials emphasize that without approval the Company may be unable to complete the Acquisition, which management argues could leave the Company with limited alternatives. In recommending FOR, the Board balances the immediate dilutive impact against the potential strategic scale and financial benefits of combining with TFL and the associated capital raise; stockholders should weigh the projected pro forma financials, dilution scenarios and governance implications before voting.

This proposal asks stockholders to approve, for Nasdaq Rule 5635(b) purposes, issuances of common stock in connection with the Acquisition that could be treated as resulting in a change of control (e.g., an investor or investor group acquiring 20% or more of outstanding stock). Management needs this approval because Nasdaq requires shareholder approval when an issuance in connection with an acquisition may produce a new controlling stockholder or group. The proxy discloses the Transaction Consideration includes a substantial stock component and a potential holdback tied to EBITDA targets, and management indicates the issuance could create a new largest ownership position. The Board recommends FOR because it deems the Acquisition strategically important and because securing Nasdaq clearance is a condition to closing; failure to obtain approval could prevent completion. From an investor perspective this is consequential: it authorizes a potential change in control mechanism that could alter governance and influence future strategy and board composition. The materials note that one seller may obtain board representation post-closing and that lock-up and registration rights are contemplated, so investors should assess the control implications, the terms of the lock-up/registration agreements and the potential for concentration of voting power. The Board’s recommendation frames the issuance as necessary to accomplish a strategic transaction that increases scale and positions the combined company for growth, but stockholders should weigh the control and dilution trade-offs carefully.

This management proposal seeks shareholder approval under Nasdaq Rule 5635(d) to permit issuances in connection with the Acquisition and a Proposed Offering where non-public placements could result in issuance equal to 20% or more of outstanding shares at or below the Nasdaq-defined “Minimum Price.” Management needs this authorization because Nasdaq requires prior stockholder approval for below-market private placements that are highly dilutive. The proxy states the Company intends to pursue an Offering (contemplated at up to $150 million) to fund the cash portion of the purchase price, and the Offering could include warrants or other instruments; Nasdaq clearance under Rule 5635(d) is therefore a gating item. The Board recommends FOR as necessary to complete financing and allow the Acquisition to proceed; it stresses that the offering terms will be set to fund the transaction and that shareholder approval limits Nasdaq-based obstacles. For investors the vote opens the door to potentially dilutive below-market financings; they should consider how pricing, structure (warrants, resale registration rights) and projected uses of proceeds affect long-term value and dilution. The proxy also describes proposed protections such as registration rights and lock-ups for sellers, which investors should review when assessing the trade-offs of approving below-market issuance flexibility.

This proposal asks shareholders to pre-approve the parameters of a contemplated Proposed Offering to raise up to $150 million to fund the cash portion of the Acquisition and ensure Nasdaq compliance with Rules 5635(b) and (d). The proxy gives preliminary transaction parameters (it describes a potential issuance of up to 300 million shares and/or up to 300 million warrants, discounts up to 40%, and a closing deadline no later than Dec 31, 2026), noting these are subject to final documentation and will be structured to satisfy Nasdaq. Management seeks a broad authorization because the Offering is a condition to closing the Acquisition and timely funding is required to satisfy the purchase obligations and the lender/closing covenants. The Board recommends FOR on the basis that securing financing is essential to consummate the strategic acquisition and preserve the company’s viability and growth prospects. Stockholders should weigh the severity of potential dilution implicit in the proposed size and discount levels against the strategic rationale for the Acquisition, the projected combined company economics, and any protective measures (lock-ups, registration rights, holdbacks) offered to minimize seller concentration or opportunistic sales. From a governance perspective, an approval empowers management to finalize an aggressive financing and obligates shareholders to accept attendant dilution risks if the Offering proceeds under the parameters described.

This proposal authorizes the Board to implement, at its discretion and without further shareholder approval, a reverse stock split within a wide ratio range (1:2 to 1:100) within 12 months after approval. Management frames the measure as a tactical tool to address Nasdaq’s $1.00 minimum bid-price requirement and to avoid delisting — the Board would only act if necessary to maintain listing or if it believes the split would improve trading liquidity or attract institutional interest. The proxy acknowledges both potential benefits and risks: a higher per-share price could improve access to certain investors and reduce perceived penny-stock stigma, but a reverse split reduces floats and could worsen liquidity and amplify volatility, and does not address fundamental business challenges. The Board retains discretion to select the precise ratio so it can calibrate the market impact, but shareholders cede control over the split ratio and timing. The Board recommends FOR to preserve listing flexibility and to be positioned to act quickly if the Company faces Nasdaq compliance pressure. Investors should evaluate this proposal against the Company’s trading history, the causes of any low bid-price, and whether management has credible plans to materially improve operating performance post-split. Procedurally, broker-dealers can vote uninstructed on this routine matter; however, shareholders should be aware that Board authority could lead to significant structural changes (reduced shares outstanding) without further shareholder input.

This proposal asks shareholders to approve a new equity incentive plan reserving 20,000,000 shares for stock options, restricted stock and SARs, plus an annual evergreen increase equal to 5% of outstanding shares for up to ten years (subject to Board discretion to reduce or suspend). Management argues the plan is essential to recruit, retain and motivate employees and directors, align management incentives with shareholders and provide competitive long-term compensation, especially given limited available shares under legacy plans. The Board frames the plan as necessary to support post-transaction growth and to provide equity awards in lieu of cash given the company’s capital position. From a governance and dilution perspective, the requested reserve and particularly the evergreen clause could result in substantial long-term dilution if left unchecked, and investors should consider guardrails such as limits on reuse, repricing protections, and specific disclosure of anticipated award practices. The Board recommends FOR, asserting the plan’s role in aligning interests and enabling critical hires and retention, but stockholders should demand clear disclosure of grant practices, expected dilution modeling, and performance conditions attached to significant awards. The materials disclose standard tax and exercise terms and state that the plan contains customary performance and vesting provisions; shareholders should evaluate whether the plan includes sufficient performance-based elements for senior pay under Section 162(m) and anti-dilution protections.

This is the standard non-binding “Say-on-Pay” advisory vote asking shareholders to approve the compensation disclosed for named executive officers. Management presents a pay-for-performance philosophy and contends compensation is aligned with long-term shareholder interests; the Board will consider the advisory vote’s outcome in future pay-setting. While advisory, the vote provides important shareholder feedback and can influence pay practices, particularly if a significant proportion votes against; a negative outcome typically leads to board outreach and potential compensation changes. Management explicitly recommends FOR and highlights disclosure of cash bonuses, base salary adjustments, and equity awards in the proxy materials. Investors should review detailed tables (salary, bonus, option awards, retention agreements and change-in-control payments) and consider whether the incentives promote sustainable growth without encouraging excessive risk-taking or creating poor governance conflicts (e.g., lack of robust, independent compensation consultant). Because the vote is non-binding, it does not directly change pay, but an adverse result would be a strong signal for the Board to revise compensation design and disclosures. Vote outcome may also affect the frequency proposal and the Board’s engagement with investors on remuneration and governance.

This advisory proposal gives shareholders the opportunity to indicate whether the Company’s executive compensation advisory vote should occur annually, biennially or triennially; management recommends a triennial vote. The Board argues that a three-year cycle encourages a longer-term view of compensation outcomes, avoids overreliance on short-term performance or hindsight, and provides time to analyze whether compensation changes were effective. The vote is non-binding, but the Board will consider the result in setting the cadence of future advisory votes; the Board notes it previously elected a three-year frequency based on a prior advisory result. Investors should consider whether more frequent feedback (annual) would better protect shareholder interests or whether a three-year interval better aligns with performance cycles and allows meaningful assessment of multi-year incentive outcomes. The Board’s recommendation for three years is typical for companies emphasizing long-term incentive alignment, but shareholders preferring annual accountability may vote otherwise; the Board has stated it will take the outcome into account but is not bound by it.

This is a placeholder agenda item to permit consideration of any other business properly presented at the Annual Meeting. It carries no substantive proposal text beyond customary proxy authority language and is typically invoked to allow the appointed proxies to vote on unexpected matters consistent with their best judgment or as instructed by the Board. There is no specific recommendation from the Board on this general item; any such additional matters would be evaluated on their merits and voted upon at the meeting. For shareholders, this item has limited informational value but is necessary for procedural completeness; it does not replace the need to evaluate and vote on the enumerated, substantive proposals. If other matters arise, proxy holders will vote them as permitted under the proxy statement or as they deem appropriate consistent with applicable rules. Because its content is undefined, there is no analytical case to evaluate in advance beyond standard corporate governance considerations.