Valion Bio Inc

This management proposal asks stockholders to approve an increase of 2,581,608 shares to the share reserve under the Amended and Restated 2021 Equity Incentive Plan. Management seeks approval to preserve its ability to grant equity awards used for recruiting, retention, and incentive compensation, particularly given constrained cash resources and planned investments in pre-clinical and clinical programs. The company cites multiple contemporaneous financing arrangements (Series C Preferred Purchase Agreement, Note Purchase Agreement with 3i, April 2025 Series B arrangement assigned to 3i, and an Equity Line of Credit with Tumim) that are expected to result in significant near-term issuances or conversions of equity and therefore increase the need to maintain a meaningful equity pool for employees and directors. The board evaluated potential dilution and concluded the requested increase is reasonable in light of the company’s objectives to align management with shareholders, reduce cash compensation needs, and retain talent. If approved, the total reserve would rise to 3,219,566 shares; if not approved, the reserve remains at the lower level and could constrain future equity grants. The proposal is presented as non-routine under Nasdaq rules and requires a majority of shares present to pass. The Board recommends a vote FOR because it views equity awards as material to executing the company’s strategy and believes the increase supports long-term shareholder value by enabling competitive compensation. Risks include dilution to current holders and pro‑forma overhang, which management discloses and analyzes; stockholders should weigh the trade-off between dilution and the company’s need to attract/retain talent while it executes its business plan.

This proposal requests shareholder approval under Nasdaq Listing Rule 5635(d) to permit issuance of common stock upon conversion of Series C preferred shares and exercise of related Series C warrants beyond the 19.99% cap that applied as of the execution date. Management entered into a Securities Purchase Agreement on December 9, 2025 that contemplates up to $75 million of Series C preferred and related warrants in tranche closings; without shareholder approval the company is limited to the initial tranche proceeds and the investors have no obligation to fund subsequent tranches. The conversion mechanics include a fixed conversion price ($2.2310 subject to adjustment) for Series C and a variable conversion floor ($0.39), and the financing contains protective rights for investors (dividends, ROFR, participation rights, redemption mechanics, and director appointment rights tied to cash-burn triggers). The board argues approval is required to comply with Nasdaq rules and to allow the company to access the full financing capacity, preserving cash and supporting operations and product development. The company discloses substantial potential dilution if fully converted—management’s materials estimate extremely large possible share issuances and pro‑forma dilution—which poses significant downside risk to current shareholders and may depress the share price. If stockholders do not approve, access to further tranche funding under the Series C agreement will be restricted and the company may have to seek alternative, potentially more dilutive or costly financing. The Board recommends FOR, emphasizing the financing’s strategic importance, but investors should weigh the trade-off between immediate capital needs and potentially severe long-term dilution and governance effects tied to investor protections in the Series C terms.

This proposal seeks shareholder approval to permit issuance of common shares upon conversion of a 5% senior secured convertible note and exercise of its related warrant issued to 3i, as contemplated by the December 2025 Note Purchase Agreement, beyond the Nasdaq 19.99% exchange cap. The Note aggregated roughly $16.25 million in proceeds and is secured by collateral (the acquired assets from Scorpius) and contains conversion mechanics at an initial conversion price of $2.2310, with alternative conversion mechanics (97% of 10-day VWAP, subject to a $0.39 floor) available after registration effectiveness and subject to monthly conversion limits; the Note also contains customary events of default, interest, installment conversion/redemption mechanics, and participation/ROFR rights for 3i. Management argues approval is necessary to permit conversion/exercise at prices that could be below the Nasdaq-defined Minimum Price and to provide flexibility to conserve cash by issuing shares in lieu of cash repayments or installments. The filing discloses material dilution risk — using the $0.39 floor, management estimates issuance could be very large (e.g., tens of millions of shares under some scenarios) — which could materially dilute existing holders, depress book value per share and put downward pressure on market price. If not approved, the company might have to repay the Note in cash, potentially straining liquidity and leaving collateral encumbered; conversely approval facilitates preserving cash but shifts repayment risk into equity dilution. The Board recommends FOR because it views the Note as essential financing obtained to acquire manufacturing assets and to support operations, but investors should carefully weigh dilution risk, conversion mechanics, and the security interest in company assets.

This proposal asks shareholders to approve issuance of common shares upon conversion of Series B preferred and exercise of Series B warrants that were originally agreed with a prior investor and subsequently assigned to 3i and amended in December 2025. The Series B conversion formula ties conversion price to 90% of the lowest five‑day VWAP preceding conversion (subject to a $0.39 floor after the Series B Amendment), and Series B warrants’ exercise price is determined by prior five-day averages and may be adjusted downward for later tranches — mechanics that can produce issuance below Nasdaq’s Minimum Price and trigger the need for stockholder approval. Management seeks approval to permit completion of the remaining tranche closings and to allow holders to convert/exercise beyond the 19.99% cap; without approval the company’s access to the remaining tranche proceeds would be restricted. The company states the financing provides up to $8.4 million in potential proceeds and includes investor protections (dividends, ROFR, redemption, participation rights) that should be considered alongside dilution. Board rationale emphasizes necessary access to previously negotiated financing on terms management believes are commercially favorable and important for operating capital. The principal risk for existing holders is dilution and potential downward pressure on the share price given variable conversion/exercise formulas; if shareholders refuse approval the company may need alternative financing on potentially worse terms. The Board recommends FOR to preserve access to the agreed financing while acknowledging dilution and other investor‑protection provisions embedded in the instruments.

This proposal requests shareholder approval to eliminate a Nasdaq-imposed 19.99% issuance cap so the company may sell and issue common shares to Tumim under an equity line of credit agreement providing up to $50 million in purchase capacity over two years. The Equity Line pricing is formulaic: the company may elect one‑day VWAP purchases at 97% of VWAP (subject to one‑day volume limits) or three‑day valuation purchases at 95% of the lowest VWAP during the period (with larger per‑trade caps), and Tumim’s purchase obligations are subject to beneficial‑ownership blockers (initially 4.99%, increased to 9.99% effective April 21, 2026). As consideration for the commitment, the company issued 437,012 pre‑funded warrants to Tumim and has registration rights in place; the company has a registration statement declared effective. Management argues approval provides flexibility to access capital quickly on favorable terms, preserve cash, and support operational and development needs. The key tradeoff for stockholders is dilution risk: if approved the company could issue a large number of shares depending on market prices, which would dilute existing holders and could pressure the market price. If not approved the company’s ability to use the Equity Line beyond the 19.99% cap would be constrained, potentially forcing more expensive or dilutive alternatives. The Board recommends FOR to preserve this financing option while noting the attendant dilution and governance considerations investors should evaluate.

This procedural proposal would permit the Board to adjourn the Annual Meeting to a later date or different place to solicit additional proxies if a quorum exists but there are insufficient votes to approve one or more proposals. Management presents the adjournment authority as a practical mechanism to avoid multiple failed votes at a single session and to give the company time to continue outreach to stockholders, including those voting in street name. Approval requires a majority of shares present and would typically be used only when necessary; unsigned proxies submitted without instructions will be voted in favor of adjournment in those circumstances. The consequence of approval is that management can preserve the option to seek further approvals without reconvening a new meeting from scratch; the consequence of rejection is that, if votes are insufficient, proposals could fail at the meeting and the company would have to pursue other avenues (including convening future meetings or seeking alternative financing). While adjournment can increase solicitation costs and temporarily extend uncertainty for stockholders, it can also enable the company to obtain approvals that management believes are necessary to execute financing and operational plans. The Board recommends FOR to retain flexibility in case additional time is needed to secure the requisite votes, but investors should be aware this is a governance tool that can extend the time to final resolution of contested proposals.