Zerostack Corp

Proposal asks shareholders to approve the issuance of 9,104,614 Common Shares to effect a share exchange with Texas Blocker, which received 142,232,948 0G Tokens from investors in exchange for Blocker Shares; approval is required under Nasdaq Rules 5635(a), (c) and (d) because the issuance exceeds 20% of outstanding shares and involves related parties (Zero Gravity/Executive Chairman). Management seeks approval to complete the Financing and acquire the Tokens and to register resale of the shares. The Board recommends approval after considering the strategic rationale to acquire tokens and consolidate assets, while noting significant dilutive effects, potential downward pressure on market price from resale, related party interests (Zero Gravity’s CEO Michael Heinrich) and the requirement to comply with Nasdaq. The resolution would authorize the issuance by ordinary resolution and, if not approved, the Exchange cannot close and the Company must convene additional shareholder meetings; abstentions and broker non-votes have the usual effects described in the proxy. The Board considered tax and PFIC implications for U.S. holders and potential anti-takeover effects; it believes the Financing is critical to implement business plans but acknowledges material dilution and governance conflicts that shareholders should weigh.

Management requests shareholder approval to amend the 2022 Incentive Compensation Plan to nearly double the share pool available for awards and double the number of Incentive Stock Options available. The Board and Compensation Committee justify the request citing historical grant usage, share price declines that accelerated utilization of the existing reserve, and the need to continue to attract, retain and motivate key employees, executives and directors. If approved, the increased reserve would represent 27% of fully diluted shares outstanding as of May 6, 2026 (or 15% if the PIPE exchange is completed) and is intended to sustain equity grant capacity through projected hiring and retention needs. The proposal raises dilution concerns and potential governance questions because more shares increase outstanding dilution and could affect voting dynamics; shareholders should weigh the retention and alignment benefits versus dilution, the fact that the Company has granted significant equity to insiders previously, and the interaction with other proposals (notably the PIPE issuance and stock options grants) that together may substantially alter shareholder capital and insider holdings.

This management proposal seeks shareholder approval to ratify stock option awards made on May 5, 2026 to the Chief Executive Officer (500,000 options), Chief Financial Officer (250,000 options) and Executive Chairman (500,000 options), each issued outside of the 2022 Plan and subject to forfeiture unless shareholders approve them. Each tranche vests in five 20% tranches tied to increasing VWAP thresholds starting at $7.65 and culminating at $17.85. Management frames these grants as performance- and retention-oriented, intending to align top executives with outsized long-term market appreciation (full vesting targets imply transformative equity valuations). The board recommends approval, arguing the pay-for-performance structure is appropriate and necessary to retain leadership through a growth plan linking management upside to shareholder gains. Key controversies include related-party concerns (Executive Chairman is tied to Zero Gravity), substantial dilution and the timing of the awards relative to other governance proposals (PIPE issuance, 2022 Plan amendment) which together could materially alter insider ownership and share count; shareholders should weigh alignment benefits against dilution, timing, insider conflicts, and whether grants outside the share plan are appropriate.

Management requests shareholder approval to grant the Board authority, post-Exchange, to continue the Company's jurisdiction of incorporation from Ontario to Texas under Texas 'continuance' rules. The Board argues the move will reduce legal and tax complexities of being a Canadian corporation with predominantly U.S.-oriented operations, improve access to U.S. capital, align corporate law to U.S. practices (including Texas’ statutory business judgment rule and a statutory forum selection advantage), and potentially avoid certain Canada-U.S. cross-border tax issues if completed after the Exchange (including PFIC and Section 7874 complexities). The proposal requires a two-thirds shareholder vote and triggers dissent rights under Ontario law; shareholders should consider the tax consequences, anti-takeover and governance changes (e.g., Texas may allow broader charter limits on director liability, forum provisions, and limitations on shareholder actions), the potential for costs and regulatory filings (including Form S-4), and how the move interacts with other proposals (PIPE issuance and continuance post-exchange is conditioned on board discretion). The Board retains discretion not to proceed even if the proposal is approved, to address concerns such as dissenting shareholder exercise and related costs.

Management is asking shareholders to ratify an amendment to the bylaws to convert the Board to a three-class staggered structure with initial staggered terms expiring in 2027, 2028 and 2029 respectively, after which each class will be elected to three-year terms. The Board frames classification as a governance measure to ensure continuity, institutional knowledge retention and to improve strategic oversight by limiting large-scale board turnover in a single year. The measure also creates a structural defensive effect by making it more difficult for a hostile bidder to change a majority of the Board in one meeting, thereby lengthening the time required to effect a board takeover. Shareholders should weigh the merits of continuity and stability against the reduced accountability and potential entrenchment risk associated with classified boards, particularly for an emerging company where management’s strategy may need rapid course correction. The proposal requires a simple majority to ratify and would take effect prior to the next annual meeting, subject to the board’s implementation.

Management seeks shareholder authorization to adjourn or postpone the Meeting, if necessary, to solicit additional proxies to approve one or more proposals (Proposals 1-7). The Board's recommended authorization would give the chair discretion to adjourn for up to 30 days without further shareholder notice and to use the time to solicit votes, including from shareholders who have already voted, to change their votes in favor of proposals. The request is routine in public-company contexts and typically favors management because it increases the chance that contested proposals pass after further solicitation; however, it can be used to delay shareholder decisions and prolong the approval process. The Board recommends a vote for to preserve ability to gather required votes and avoid failed approvals because several proposals (notably PIPE issuance, Stock Options, Continuance and 2022 Plan Amendment) are interdependent and require a quorum and specified majorities. Shareholders should consider whether they want management to have this adjournment flexibility if they are opposed to any of Proposals 1-7.