AZIO AI HOLDINGS, INC.

This proxy statement contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar matters that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “should,” “will” and “would” or the negatives of these terms or other comparable terminology intended to identify statements about the future. These forward-looking statements include, but are not limited to, statements regarding our ability to raise additional capital pursuant to the Investor Agreements, our ability to realize the anticipated benefits of the Investor Agreements, the potential dilutive effects of any future issuances of shares of Common Stock pursuant to the Investor Agreements, the impact of any such future issuances on prevailing market prices for our Common Stock, our use of proceeds of any future issuances under the Investor Agreements, and our intent or ability to effect the Reverse Stock Split or regain compliance with any applicable listing requirements of the Nasdaq Stock Market LLC (“Nasdaq”). These statements are based on management’s current assumptions and are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. For other important factors that could cause actual results to differ materially from the forward-looking statements in this proxy statement, please see the risks and uncertainties identified under the heading “Risk Factors” in our 2023 Annual Report, as updated by the Company’s Quarterly Reports on Form 10-Q, each of which is available on the SEC’s website at www.sec.gov. All forward-looking statements reflect the Company’s beliefs and assumptions only as of the date of this proxy statement. The Company undertakes no obligation to update forward-looking statements to reflect future events or circumstances.

PROPOSAL 1: APPROVAL, FOR PURPOSES OF NASDAQ LISTING RULE 5635(D), OF THE

ISSUANCE TO THE INVESTOR OF SHARES OF OUR COMMON STOCK IN EXCESS OF THE EXCHANGE CAP

At the Special Meeting, our stockholders will be asked to approve, for purposes of Nasdaq Listing Rule 5635(d), the issuance of shares of our Common Stock to the Investor pursuant to the Investor Agreements.

Amended and Restated Standby Equity Purchase Agreement

As previously disclosed in the Current Report on Form 8-K filed by the Company with the SEC on November 6, 2024, on October 31, 2024, the Company entered into the A&R SEPA with the Investor. The A&R SEPA amends and restates in its entirety the standby equity purchase agreement, dated September 23, 2024 (the “Original SEPA”), by and between the Company and the Investor, as previously disclosed in the Current Report on Form 8-K filed by the Company with the SEC on September 27, 2024. The A&R SEPA was later amended pursuant to the Supplemental Agreement as disclosed in the Current Report on Form 8-K filed by the Company with the SEC on February 25, 2025.

Pursuant to the A&R SEPA, except for so long as there is a balance outstanding under the Promissory Notes (as defined below), we have the right, from time to time, until November 1, 2027 (the “Commitment Period”), to require the Investor to purchase up to $25 million of shares of Common Stock (the “Commitment Amount”), subject to certain limitations and conditions set forth in the A&R SEPA, by delivering written notice to the Investor (an “Advance Notice”).

If there is no balance outstanding under the Promissory Notes, we may, in our sole discretion, select the amount of shares of Common Stock that we desire to issue and sell to the Investor (an “Advance”) in each Advance Notice, subject to a maximum limit equal to 100% of the average of the daily volume traded of the Common Stock on the Nasdaq Capital Market for the five consecutive trading days immediately preceding the delivery by us of an Advance Notice (the “Maximum Advance Amount”). The shares of Common Stock to be purchased pursuant to an Advance Notice will be issued and sold to the Investor at a per share price equal to, at our election as specified in the relevant Advance Notice: (i) 96% of the Market Price (as defined below) for any period commencing (a) if the Advance Notice is submitted to the Investor prior to 9:00 a.m., Eastern Time, on a trading day, the open of trading on such day or (b) if the Advance Notice is submitted to the Investor after 9:00 a.m., Eastern Time, on a trading day, upon the receipt of the Advance Notice by the Investor and, in any case, ending at 4:00 p.m., Eastern Time, on the applicable trading day of delivery of such Advance Notice (the “Option 1 Pricing Period”), or (ii) 97% of the Market Price for the three consecutive trading days commencing on the day such Advance Notice is delivered (the “Option 2 Pricing Period,” and each of the Option 1 Pricing Period and the Option 2 Pricing Period, a “Pricing Period”). “Market Price” is defined as, for any Option 1 Pricing Period, the daily volume weighted average price of the Common Stock on Nasdaq as reported by Bloomberg L.P. (“VWAP”) during the Option 1 Pricing Period, and for any Option 2 Pricing Period, the lowest daily VWAP of the Common Stock during the Option 2 Pricing Period. If, with respect to an Option 1 Pricing Period, the total number of shares of Common Stock traded on the Nasdaq Capital Market during the applicable Pricing Period is less than the Volume Threshold (as defined below), then the number of shares of Common Stock issued and sold pursuant to such Advance Notice will be reduced to the greater of (i) 30% of the trading volume of the Common Stock on the Nasdaq Capital Market during the relevant Pricing Period as reported by Bloomberg L.P. or (ii) the number of shares of Common Stock sold by the Investor during such Pricing Period, but in each case not to exceed the amount requested in the Advance Notice. “Volume Threshold” is defined as a number of shares of Common Stock equal to the quotient of (i) the number of shares requested by us in the Advance Notice divided by (ii) 0.30.

In addition, pursuant to the Investor Agreements, the Investor agreed to advance to us, subject to the satisfaction of certain conditions set forth therein, the principal amount of $8 million (the “Pre-Paid Advance”) in exchange for our issuance to the Investor of convertible promissory notes (the “Promissory Notes”) in four tranches. We received the first tranche of the Pre-Paid Advance in the principal amount of $2 million on October 31, 2024 in exchange for the Promissory Note dated October 31, 2024 (the “Note EVTV-1”), the second tranche of the Pre-Paid Advance in the principal amount of $1 million on December 17, 2024 in exchange for the Promissory Note dated December 17, 2024 (the “Note EVTV-2”), and the third tranche of the Pre-Paid Advance in the principal amount of $3 million on February 25, 2025 in exchange for the Promissory Note dated February 24, 2025 (the “Note EVTV-3”). The fourth tranche of the Pre-Paid Advance (the “Note EVTV-4”) will be in the principal amount of $2 million and advanced by the Investor upon the approval by our stockholders of the issuance of shares in excess of the Exchange Cap. As of the Record Date, 3,233,780 shares of Common Stock had been issued upon conversion of the Promissory Notes (not including 64,103 shares of Common Stock issued to the Investor as partial consideration for its commitment under the A&R SEPA (the “Commitment Shares”)) and the aggregate principal amount remaining outstanding under the Promissory Notes was $4,383,342.66. In addition, as of the entry into the Supplemental Agreement, the Note EVTV-2 had been paid in full and was no longer outstanding.

Following the effective date of the Supplemental Agreement, the Promissory Notes accrue interest on the outstanding principal balance at an annual rate equal to, for the Note EVTV-1 only, 0% and, for the Note EVTV-3 and the Note EVTV-4, 5%, which, in each case, will increase to an annual rate of 18% upon the occurrence of an Event of Default (as defined in the Promissory Notes) or a Registration Event (as defined in the Promissory Notes) for so long as such event remains uncured. The Promissory Notes will mature on March 9, 2026, which may be extended at the option of the Investor. The Promissory Notes are convertible at a conversion price equal to the lower of (i) $1.00 per share or (ii) 93% of the lowest daily VWAP during the five consecutive trading days immediately preceding the conversion date (but no lower than the “floor price” then in effect, which is $0.0713 per share, subject to adjustment from time to time in accordance with the terms contained in the Promissory Notes) (the “Conversion Price”).

If there is a balance outstanding under the Promissory Notes, we may only submit an Advance Notice (i) if an Amortization Event (as defined in the Promissory Notes) has occurred and our obligation to make prepayments under the Promissory Notes has not ceased, and (ii) the aggregate purchase price owed to us from such Advances (“Advance Proceeds”) will be paid by the Investor by offsetting the amount of the Advance Proceeds against an equal amount outstanding under the Promissory Notes.

In addition, for so long as there is a balance outstanding under the Promissory Notes, the Investor, at its sole discretion, may deliver to us a notice (an “Investor Notice”) to cause an Advance Notice to be deemed delivered to the Investor and the issuance of shares of Common Stock to the Investor pursuant to an Advance. The Investor may select the amount of the Advance pursuant to an Investor Notice up to the Maximum Advance Amount, provided that the amount of the Advance selected will not exceed the balance owed under the Promissory Notes outstanding on the date of delivery of the Investor Notice. The shares will be issued and sold to the Investor pursuant to an Investor Notice at a per share price equal to the Conversion Price that would be applicable to the amount of the Advance selected by the Investor if such amount were to be converted as of the date of delivery of the Investor Notice. The Investor will pay the purchase price for such shares to be issued pursuant to the Investor Notice by offsetting the amount of the purchase price to be paid by the Investor against an amount outstanding under the Promissory Notes.

The foregoing descriptions of the Original SEPA, the A&R SEPA and the Supplemental Agreement, including the Promissory Notes issued or issuable thereunder, are not complete and are qualified in their entirety by reference to copies of the Original SEPA, the A&R SEPA, the Supplemental Agreement and the form of the Promissory Notes attached thereto, which were filed as exhibits to our Current Reports on Form 8-K filed with the SEC on September 27, 2024, November 6, 2024, and February 25, 2025.

Nasdaq Stockholder Approval Requirements

We are subject to the rules and regulations of Nasdaq because our Common Stock is listed on the Nasdaq Capital Market. Accordingly, in addition to the contractual obligations and conditions described above, we are seeking stockholder approval in order to comply with Nasdaq Listing Rule 5635(d).

Pursuant to Nasdaq Listing Rule 5635(d), stockholder approval is required prior to a 20% Issuance (as defined below) at a price that is less than the Minimum Price (as defined below). For purposes of Nasdaq Listing Rule 5635(d), (i) “20% Issuance” means a transaction, other than a public offering, involving the sale, issuance or potential issuance by us of Common Stock (or securities convertible into or exercisable for Common Stock), which alone or together with sales by our officers, directors or substantial stockholders equals 20% or more of our Common Stock or 20% or more of the voting power outstanding before the issuance, and (ii) “Minimum Price” means a price that is the lower of: (A) the closing price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement, or (B) the average closing price of our Common Stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement.

Under these listing rules, and pursuant to the Investor Agreements, we may not issue or sell to the Investor shares of Common Stock in excess of 3,297,883 shares, which is 19.99% of the shares of Common Stock outstanding immediately prior to the effective date of the Original SEPA (the “Exchange Cap”), unless (i) we obtain stockholder approval to issue shares of Common Stock in excess of the Exchange Cap or (ii) the average price of all applicable sales of Common Stock under the Investor Agreements equals or exceeds $1.868 per share (which represents the lower of (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) on the trading day immediately preceding the effective date of the Original SEPA or (ii) the average Nasdaq Official Closing Price of the Common Stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the effective date of the Original SEPA).

Reasons for Approval

We are requesting our stockholders’ approval of this Proposal 1 because, under certain circumstances, we may need to issue shares of Common Stock to the Investor pursuant to the Investor Agreements in excess of the Exchange Cap at a price that is less than the Minimum Price. In such case, we would not be able to complete such issuances without stockholder approval pursuant to Nasdaq Listing Rule 5635(d).

If this Proposal 1 is approved, the limitations of the Exchange Cap described in the Investor Agreements and the limitations of Nasdaq Listing Rule 5635(d) will no longer apply. We expect that, upon approval of this Proposal 1, we will (i) be able to issue shares of our Common Stock to the Investor upon its election to convert some or all of the Promissory Notes without the limitations of Nasdaq Listing Rule 5635(d), and (ii) once the Pre-Paid Advances under the Promissory Notes have been repaid in full, be able to continue to raise capital by issuing shares of our Common Stock pursuant to the A&R SEPA without the limitations of Nasdaq Listing Rule 5635(d). However, even if Proposal 1 is approved, any issuances to the Investor pursuant to the Investor Agreements would remain subject to the beneficial ownership limitations and other terms and conditions described therein, and we may choose not to raise capital under the Investor Agreements.

Our Board has determined that it is in our best interests and the best interests of our stockholders to approve this Proposal 1, because being able to sell shares of Common Stock to the Investor under the Investor Agreements in excess of the Exchange Cap will provide us with reliable sources of capital for potential acquisitions, working capital and general corporate purposes. It is also in our best interests to be able to fulfill our obligations to the Investor under the Investor Agreements to issue and sell to the Investor shares of our Common Stock in the event that the Investor elects to convert some or all of the Promissory Notes. Accordingly, our Board believes that providing the Company the flexibility to issue shares of Common Stock in excess of the Exchange Cap is advisable and in the best interests of the Company and our stockholders.

Dilution and Potential Adverse Impact of Approval of this Proposal 1

The issuances of shares of Common Stock under the Investor Agreements and upon conversion of the Promissory Notes, including any shares that may be issued in excess of the Exchange Cap, will result in an increase in the number of shares of Common Stock outstanding, and our stockholders will incur dilution of their percentage ownership as a result. Following such issuances, our current stockholders will own a smaller proportionate interest in the Company and, therefore, have less ability to influence corporate decisions requiring stockholder approval. In particular, as of the Record Date, 3,233,780 shares of Common Stock had been issued upon conversion of the Promissory Notes (not including the Commitment Shares). As a result, the aggregate principal amount remaining outstanding under the Promissory Notes was $4,383,342.66 as of the Record Date. Assuming we receive the fourth tranche of the Pre-Paid Advance in the principal amount of $2 million pursuant to the Note EVTV-4 following the Special Meeting and assuming a Conversion Price of $0.25 per share as of the Record Date, based on the total number of shares of Common Stock outstanding as of the Record Date, up to 25,533,371 additional shares of Common Stock may be issued upon full conversion (and no adjustments to the Conversion Price) of the Promissory Notes, which would reflect approximately 111% of the outstanding shares of our Common Stock as of the Record Date after giving effect to such issuances. Following the conversion in full of the remaining Pre-Paid Advance under the Promissory Notes, the remaining Commitment Amount under the A&R SEPA will be $17 million, and the Company will have the option to request Advances from time to time, subject to the limitations set forth in the A&R SEPA, which will result in further issuances of shares of our Common Stock. The issuance of shares pursuant to the Investor Agreements, including the outstanding Promissory Notes, could also have a dilutive effect on our book value per share and on any future earnings per share, and the sale or any resale of such shares could cause prevailing market prices for our Common Stock to decline.

However, we cannot predict the substance of any future Advances or the market price of our Common Stock at any future date and, therefore, we cannot predict the actual number of shares of Common Stock that will be issued under the Investor Agreements or upon conversion of any Promissory Notes. Because the number of shares of Common Stock that may be issued to the Investor pursuant to the Investor Agreements and upon conversion of the Promissory Notes is determined based on the market price at the time of issuance, the exact magnitude of the dilutive effect cannot be conclusively determined. However, the dilutive effect may be material to our current stockholders.

If Proposal 1 is Not Approved

If stockholder approval is not obtained for this Proposal 1, we may be required to incur additional costs in order to hold additional stockholder meetings to seek such approval and we will not receive the fourth tranche of the Pre-Paid Advance from the Investor until such stockholder approval has been obtained. In addition, we will not be able to continue to raise capital through the issuance of shares pursuant to the Investor Agreements, or issue shares of Common Stock upon the Investor’s election to convert some or all of the Promissory Notes, if any such issuance(s) exceeds the Exchange Cap.

If we are limited in our ability to raise additional capital under the Investor Agreements, we may not be able to continue to operate or may not be able to execute on our strategic plans or potential acquisitions. In addition, we may need to seek alternative sources of capital to fund our operations, which may not be available to us on favorable terms, or at all, and failure to obtain stockholder approval of this Proposal 1 may discourage future investors from engaging in future financings with us. We can provide no assurance that we would be successful in raising funds in the future or that such funds could be raised at prices that would not create substantial dilution for our existing stockholders.

No Appraisal Rights

Our stockholders are not entitled to dissenters’ or appraisal rights under the General Corporation Law of the State of Delaware with respect to this Proposal 1.

Interests of the Company’s Directors and Officers

None of our directors or officers have an interest in this Proposal 1.

Approval of this Proposal 1 requires the affirmative vote of a majority in voting power of the shares of our Common Stock present in person (including via live webcast) or represented by proxy and entitled to vote.

OUR BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE“FOR”** PROPOSAL 1.**