Lqr House Inc

This management proposal asks shareholders to approve an amendment to the Company’s Articles of Incorporation that would authorize the Board to implement one or more reverse stock splits of the Company’s common stock at any whole-number ratio between 1-for-40 and 1-for-800 (in the aggregate not to exceed 1-for-800) through February 23, 2028, with the Board retaining sole discretion as to whether and when to implement a split and at which ratio within the approved range. Management frames the transaction primarily as a tool to regain or maintain compliance with Nasdaq’s minimum $1.00 bid-price listing requirement and to potentially improve marketability and institutional interest in the stock; the Board also cites the operational flexibility that results from reducing outstanding shares (e.g., increasing the pool of authorized but unissued shares available for financing or transactions). The proposal is not an immediate split but a grant of authority to the Board to act in the future if it determines the market and company circumstances warrant such action, and the Board expressly reserves the right to abandon an approved split if it later believes it would not be in stockholders’ best interests. Key risks include the possibility that a reverse split will not sustain a higher post-split trading price, that liquidity could decrease because fewer shares will be outstanding, and that Nasdaq could still deem the public float or trading volume too low after a split to commence or reset a compliance period. The proxy discloses that Nasdaq may consider prior reverse splits in assessing future compliance periods and that high split ratios could reduce the number of shares outstanding to levels that raise Nasdaq public-float or round-lot holder concerns, potentially creating unintended listing risk. The proposal also increases the effective pool of authorized but unissued shares (since issued shares would be consolidated), which could facilitate future issuances and dilute existing holders; management acknowledges anti-takeover concerns but states no intention to use the authority for such a purpose. The Board recommends a “FOR” vote, arguing that the combination of preserving Nasdaq listing and providing strategic flexibility outweighs the potential downsides, but shareholders should weigh the contingency nature of the authority, the broad discretion retained by the Board over timing and ratio, and the diluted governance effects of increasing authorized-but-unissued shares available post-split. In assessing the merit of this proposal, a sophisticated investor should consider the company’s current trading metrics, Nasdaq compliance history (including the April 2025 reverse split), the projected post-split public float and round-lot holder counts, and whether the Board’s demonstrated discipline and disclosure provide adequate guardrails for the exercise of this broad authority.

This management proposal seeks shareholder approval to convert the company from a Nevada corporation to a Delaware corporation through a Plan of Conversion, adopting a Delaware Certificate of Incorporation and Delaware Bylaws at the effective time. Management’s rationale centers on Delaware’s well-developed corporate law, extensive case law, perceived predictability in corporate governance litigation, and procedural features that management believes are advantageous for capital-raising, dividend flexibility, and other corporate actions. The proposal will not change the company’s operations, management, headquarters, or trading symbol but will change the governing statutory framework (from Nevada law to the DGCL) and permit the board to take advantage of certain Delaware corporate forms, including broader authority over preferred stock series (blank-check preferred) and other charter provisions. Key governance changes and trade-offs are disclosed: Delaware generally permits director liability limitations and indemnification structures common in public companies and has different standards for removal of directors, interested stockholder statutes (Section 203) and quorum/record-date mechanics; Nevada law contains different procedural protections (for example, higher director removal thresholds and different rules regarding increasing authorized shares). The company notes potential cost implications, including potentially higher Delaware franchise taxes depending on authorized shares and net assets, and the Board discloses mechanics such as one-for-one conversion of outstanding shares into Delaware shares so no exchange of certificates is required. The Board recommends a “FOR” vote, concluding that the legal and commercial predictability and flexibility of Delaware law outweigh the costs and that the reincorporation will better position the company for future capital markets activity; a sophisticated investor should weigh these governance changes, the potential impact of Section 203 unless elected out, franchise tax implications given the contemplated authorized share structure, and the effect on shareholder rights such as director removal, appraisal/dissenters’ rights, and forum-selection provisions in the proposed charter.

This management proposal requests shareholder approval to amend the Articles of Incorporation to increase the number of authorized shares of common stock from 350 million to 1.5 billion shares, ostensibly to provide capacity for future capital-raising, strategic transactions, equity compensation grants, and general corporate purposes. Management argues this increase creates operational flexibility and avoids the delay and expense of convening a special meeting to increase authorization when prompt action is required; the Board also notes that issuance of additional shares would have rights identical to existing common stock. The principal downside is dilution risk: because holders have no preemptive rights, future issuances could materially dilute existing shareholders’ ownership, voting power, and per-share metrics; the filing also acknowledges anti-takeover concerns where a large pool of authorized but unissued shares could be used to frustrate a tender offer or change of control. The proposal includes no specific plan or commitment to issue shares immediately, but management indicates capital needs make future issuance foreseeable. The Board recommends a “FOR” vote on the basis that additional flexibility benefits corporate operations and financing ability, but shareholders should weigh the dilution risk, the lack of preemptive rights, any planned allocation of the new shares (including equity compensation or sponsor/insider sales), and potential governance impacts associated with a significantly larger authorized share pool. A sophisticated investor assessing this proposal should consider the company’s near-term capital requirements, potential use of an ATM facility or private placements, the history of related-party transactions and settlements disclosed in the filing, and whether management’s stated restraint and governance controls are sufficient to mitigate dilutionary risk.

This management proposal seeks authorization for the proxies to adjourn the Special Meeting, if necessary, in order to solicit additional proxies to secure approval of Proposals 1–4. The ask is procedural and discretionary: if the meeting lacks sufficient votes or a quorum for any substantive proposal, the Board would use this authority to adjourn and continue solicitation rather than immediately concluding the vote. Management frames the measure as protective of stockholder value because it enables further outreach to holders who have not voted and could prevent a definitive defeat due to timing or proxy-solicitation shortfalls; the company emphasizes that adjournment may occur only if necessary or appropriate in the Board’s good-faith judgment. The primary governance concern is that adjournment can be used tactically to continue solicitation until a favorable outcome is reached; however, the proxy describes limits (e.g., no separate notice required for adjournments of ≤30 days) and explains that proxies solicited by the Board will be voted in favor of adjournment unless a stockholder has indicated otherwise. The Board recommends a “FOR” vote as a standard procedural safeguard to allow additional solicitation time if needed; sophisticated investors should view this as a routine housekeeping measure but remain attentive to whether adjournment is used consistent with transparent disclosure and not to materially dilute the effect of expressed shareholder opposition without adequate outreach.