Purple Innovation Inc

This management proposal requests stockholder approval to amend the Company’s certificate of incorporation to permit a reverse stock split of both Class A and Class B common stock at a ratio anywhere from 1-for-10 up to 1-for-30, with the Board retaining discretion to select the exact whole-number ratio within that range or to abandon the amendment. Management is seeking shareholder approval because Delaware law requires stockholder ratification of amendments to the certificate of incorporation, and because the Board wants flexibility to act later based on market conditions. The proximate driver is Nasdaq noncompliance: the Company received notice for failing to meet the $1.00 minimum bid price requirement and is pursuing remediation, including a scheduled hearing with the Nasdaq Hearings Panel; management views a reverse split as a potential path to restore compliance and avoid delisting. The proposal contemplates that if implemented the reverse split would proportionally reduce outstanding shares, increase the per-share price (not guaranteed), and result in a relative increase in authorized but unissued shares available for future issuance, with attendant dilution risk if those shares are later issued. The proposal details effects on equity awards and warrants — outstanding options, RSUs and warrants would be adjusted proportionally and share reserves under the equity plan would be reduced unless adjusted by the Committee. The Board also outlines risks: the reverse split may not produce a sustained price increase, could reduce liquidity, and may be perceived negatively by some investors; it is not intended to be a first step in a going-private transaction. The Board recommends approval to preserve the option of implementing a split that it believes could aid in Nasdaq compliance and in restoring market visibility, while retaining discretion to refrain from implementing the split if market conditions or other factors make it inadvisable. Investors should weigh the procedural benefits for listing maintenance against the economic risks (no guaranteed increase in market cap, potential reduction in liquidity, and possible dilution from future issuances).

This management proposal asks stockholders to authorize the proxies to adjourn the Special Meeting (or any adjourned session) to allow additional time to solicit votes in favor of the Reverse Stock Split Proposal if the votes cast at the scheduled meeting are insufficient for approval. Procedurally, approval requires a majority of votes cast and is a common adjunct to transaction-related or charter amendment proposals to ensure the company has the ability to extend the solicitation period without reconvening under new notice. The adjournment proposal is functionally linked to Proposal No. 1 — if stockholders approve adjournment, the Board and management can continue outreach to shareholders and brokers to obtain the necessary votes for the reverse split. Management frames the adjournment as protecting stockholder interests by avoiding a rushed outcome and enabling fuller participation; the Board views it as a practical step to secure a valid vote on the substantive amendment. Because Nasdaq-related relief hinges on timely implementation decisions, the adjournment right gives the Board flexibility to pursue the reverse split within regulatory and market timing constraints. The Company expects broker discretion to be available for this routine matter, minimizing broker non-votes. While routine, approval enables additional solicitation costs and may allow strategic proxy outreach by parties with material stakes; stockholders should recognize its purely procedural nature and that it has no independent substantive economic effect absent interplay with Proposal No. 1. The Board recommends a vote FOR this proposal to preserve the Company’s ability to solicit and obtain the necessary approval for the reverse stock split if initial voting is insufficient.