Synergy Chc Corp

This management proposal asks shareholders to approve a material amendment to the 2024 Equity Incentive Plan that would dramatically increase the plan’s share reserve from its current level (as of April 24, 2026, 1,052,102 shares remained available) to 150,000,000 shares and would expressly allow the plan administrator to reprice outstanding awards or cancel them in exchange for cash or replacement awards without further shareholder approval. Management frames the request as necessary to preserve the Company’s ability to attract, retain and motivate key employees and directors through long-term equity incentives and to preserve favorable tax and accounting treatment under Sections 162(m) and 422 of the Internal Revenue Code and Nasdaq rules. Granting a large share reserve can create substantial dilution risk to existing shareholders and, given the order-of-magnitude increase requested, should be evaluated relative to expected hiring, retention needs, potential future equity financings, and the current low market capitalization of the company. The repricing permission is operationally useful for management to restore the incentive value of awards after share-price declines but also weakens shareholder protections because it eliminates the need for further shareholder approval for adjustments that could be viewed as resetting underwater awards; proxy advisory firms may criticize such authority. The Board states it will retain discretion over whether to reprice and under what terms, but that discretion concentrates power and increases governance oversight importance, including robust disclosure when repricings are undertaken. Approval would facilitate future grants and flexibility but likely increase reported compensation expense and potential short-term dilution; it would also preserve tax-qualified option treatment if structured properly. Overall, investors should weigh retention and recruiting benefits against the scale of potential dilution and the governance tradeoffs introduced by the repricing authority; approval is a significant governance decision rather than a routine plan technical amendment.

This management proposal asks shareholders to approve issuance of up to 3,000,000 shares upon exercise of a Lender Warrant issued to a lender in connection with an amendment to the company’s term loan. Because the Warrant covers ~20.1% of outstanding shares at an exercise price of $0.00001, Nasdaq Listing Rule 5635(d) requires shareholder approval for issuance equal to 20% or more at a price below the Minimum Price; the Company also seeks approval under Rule 5635(b) to address potential change-of-control concerns. The approval functions primarily as a technical compliance and covenant-fulfillment measure: the Company has covenanted in the Credit Agreement to seek this approval and a failure to obtain it could trigger an Event of Default with potentially severe lender remedies. If approved, holders could exercise the Warrant (subject to its terms, including a Qualified Event of Default) and the Company could issue the Warrant Shares notwithstanding the Beneficial Ownership Limitation. The issuance would be dilutive and could depress trading price or increase volatility; it could also change ownership percentages materially and affect governance dynamics. Investors should weigh the near-term covenant/compliance risks of not approving (including lender remedies) against the dilution and governance implications of permitting full issuance at a nominal exercise price. The Board’s recommendation reflects risk mitigation regarding the Credit Agreement and Nasdaq compliance rather than a capital-raising rationale.

The Board is asking shareholders to approve an amendment that authorizes management to implement one or more reverse stock splits at aggregate ratios up to 1-for-200, exercisable at management’s discretion within one year. The stated primary purpose is to maintain compliance with Nasdaq’s minimum bid-price listing standard and to reduce the risk of delisting, which management argues would materially impair liquidity and investor access. A reverse split could increase the per-share trading price and potentially broaden the investor base and institutional interest, but it also concentrates voting power and reduces the number of outstanding shares, which may negatively impact liquidity and trading dynamics if the higher price does not attract new investors. The proxy discloses that fractional shares will be rounded up to whole shares, avoiding cash-in-lieu treatments that can trigger dissenters’ rights, and that derivative instrument terms and equity plan award metrics will be equitably adjusted. The proposal gives management wide discretion on whether and when to act and what exact ratio(s) to select (up to the 1-for-200 cap), which provides flexibility but shifts a significant decision away from shareholders to the board and executive officers. There is no guarantee the reverse split will achieve the intended market-price stability or Nasdaq compliance and the filing warns that per-share declines post-split could be larger in percentage terms. Investors should balance the near-term listing-risk mitigation benefits against longer-term dilution, governance and liquidity tradeoffs and the potential for limited upside if the market does not respond as management expects.