Vivosim Labs Inc

This management proposal requests stockholder approval to amend the company's Certificate of Incorporation to authorize the Board, at its sole discretion and within a one-year window, to effect a reverse stock split of outstanding common shares at any ratio between 1-for-5 and 1-for-20. Management contends the reverse split could increase per-share market price, broaden investor acceptability, reduce transaction costs, and help meet listing or investor requirements; the proposal is structured as a range to give the Board flexibility to pick the optimal ratio given market conditions at the time of implementation. Approval would not reduce authorized shares, thereby increasing authorized-but-unissued shares post-split and potentially enabling further issuances without additional shareholder authorization—an effect the company acknowledges and discusses as a potential anti-takeover or dilution concern. The Board unanimously recommends FOR, emphasizing retention of the Board’s discretion to implement or abandon the split if conditions warrant, and disclosing mechanics regarding fractional-share treatment, effects on outstanding warrants and equity awards, tax and accounting consequences, and Nasdaq listing considerations. The proposal requires a majority of votes cast and will be effective upon filing the charter amendment with the Delaware Secretary of State; management cautions that market reaction is uncertain and the reverse split may fail to achieve a sustained increase in market capitalization.

Management seeks shareholder approval to amend and restate the company's 2022 Equity Incentive Plan to add 3,165,000 shares to the reserve for issuance, increasing the plan size to support long-term equity incentives for employees, directors and consultants. Nasdaq rules require shareholder approval for such increases. Management frames the request as reasonable (equaling roughly 19% of outstanding shares as of the record date) and intended to support hiring, retention and future grants over approximately four years at historical burn rates; it discloses governance protections (no evergreen, minimum vesting, no repricing without stockholder approval, clawback, limits on non-employee director compensation, fungible share counting and no liberal recycling) to mitigate dilution risk. The Board unanimously recommends FOR the amendment, arguing the equity plan is necessary to attract and retain talent and align employee and shareholder interests; the proposal requires a majority of votes cast to pass.

Management seeks shareholder approval under Nasdaq Listing Rule 5635(d) to allow the issuance upon exercise of 4,705,883 pre-funded and common warrants sold in a July 2026 PIPE and to permit an amendment reducing the exercise price of earlier investor warrants (issued May 13, 2024) from $9.60 to $0.85. The company explains this shareholder approval is conditioned in the PIPE agreements and Nasdaq rules because the exercise price is below Nasdaq’s minimum pricing thresholds and the investor would own more than 20% of the company upon full exercise. Management discloses potential dilution (~23.85% aggregate) and risks including concentration of voting power which might lead to 'controlled company' status under Nasdaq rules and associated exemptions from certain governance requirements; the Board recommends FOR to comply with PIPE terms and Nasdaq rules and complete the financing. The proposal requires a majority of votes cast and, if not approved, will require the company to re-solicit approval every 90 days until approval is obtained or warrants expire.