UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE
14A
Proxy Statement Pursuant to Section 14(a)
of
the Securities Exchange Act of 1934
Filed by the Registrant
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Filed by a Party other than the Registrant
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under Rule 14a-12
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Cannapharmarx, Inc.
(Name of Registrant as Specified in its
Charter)
(Name of Person(s) Filing Proxy Statement
if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offering fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of the filing.
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CANNAPHARMARX, INC.
(a Delaware corporation)
Notice of Annual Shareholder Meeting
and
Proxy Statement
CANNAPHARMARX, INC.
3600
888-3rd Street SW
Calgary, Alberta, Canada T2P 5C5
July 1, 2020
To our Stockholders:
On behalf of our Board
of Directors, I cordially invite you to attend our 2020 Annual Meeting of Stockholders. This meeting will be held at our principal
place of business located at 3600, 888 - 3rd St., SW, Calgary, Alberta, Canada T2P 5C5 on Friday, August 21, 2020, at
10:00 a.m., local time. During the meeting, we will discuss the items of business described in the accompanying Notice of Annual
Meeting and Proxy Statement, update you on important developments in our business and respond to any questions that you may have
about us.
Information about the
matters to be acted upon at the meeting is contained in the accompanying Notice of Annual Meeting and Proxy Statement. Included
with this Proxy Statement please find your proxy card instructions for voting. You are being asked to elect directors, ratify the
appointment of our auditors and conduct any other business properly raised at the meeting or any adjournments or postponements
thereof.
Your vote is very important.
Please take a moment now to cast your vote whether you plan to attend the meeting by completing, signing, dating and returning
the enclosed proxy using the enclosed self-addressed, stamped envelope. You may still vote in person at the meeting, even if you
return a proxy.
I look forward to seeing
you at the meeting.
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Yours truly,
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Dominic Colvin
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Chairperson of the Board of Directors
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CANNAPHARMARX, INC.
Suite 3600
888-3rd Street SW
Calgary, Alberta, Canada T2P 5C5
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 21, 2020
Important Notice Regarding the Availability of Proxy Materials for the
Shareholder Meeting
to Be Held August 21, 2020
The Notice of 2020 Annual Meeting, Proxy Statement and 2019 Annual Report
to Shareholders are available at www.Cannapharmarx.com /proxy.
To the Shareholders of CANNAPHARMARX, INC.
Pursuant to the Company’s
Bylaws, please take notice that an Annual Meeting of Shareholders of Cannapharmarx, Inc. will be held at the Company’s principal
place of business located at 3600, 888 - 3rd St., SW, Calgary, Alberta, Canada T2P 5C5 on Friday, August 21, 2020,
at 10:00 a.m. local time and vote on the following matters:
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1.
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To elect five (5) persons to our Board of Directors to serve for a term of one year;
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To ratify the appointment of BF Borgers CPA P.C. as the Company’s independent registered public accountant to audit the Company’s financial books and records for its fiscal year ending December 31, 2019;
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To transact such other business as may properly come before the meeting or any adjournment thereof.
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June 1, 2020 has been
fixed as the record date of the shareholders entitled to vote at the meeting and only holders of shares of Common Stock, Series
A Convertible Preferred Stock and Series B Convertible Preferred Stock of record at the close of business on that day will be entitled
to vote. The stock transfer books will not be closed.
All shareholders
are cordially invited to attend the meeting. To insure your representation at the meeting, please complete and promptly mail
your proxy, which is solicited by the Board of Directors, in the return envelope provided. If desired, you may also complete
your proxy card, scan it as a PDF or JPEG file, and send it to proxy@Cannapharmarx.com no later than August 20, 2020.
Submission of your proxy by mail or email will not prevent you from voting in person, should you so desire, but will help to
secure a quorum and avoid added solicitation costs.
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By Order of the Board of Directors
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Dominic Colvin, Chairperson of the Board of Directors
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Dated: July 1, 2020
Please
date and sign the accompanying Proxy Card
and
either mail or email it promptly to the Street or E-Mail address as provided herein. If by regular mail, please send to the attention
of John Cassels, Secretary,
Cannapharmarx
Inc., Suite 3600, 888 - 3rd street, calgary, alberta, canada
T2P
5C5
Proxies
man also be emailed to: proxy@cannapharmarx.com
Votes
not received via mail or email by August 20, 2020 will be considered to be non-timely and may, at the determination of the Chairperson
not be included for consideration
Cannapharmarx, Inc.
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
To Be Held August 21, 2020
This Proxy Statement is furnished in
conjunction with the solicitation of proxies by the Board of Directors of Cannapharmarx, Inc., a Delaware corporation (the
“Company”), to be used at the Company’s Annual Meeting of Shareholders (the “Meeting”) to be
held on Friday, August 21, 2020 , at 10:00 a.m. at the Company’s principal place of business located at Suite 3600, 888
3rd St., SW, Calgary, Alberta, Canada T2P5C5 and at any adjournments or postponements thereof.
QUESTIONS AND ANSWERS ABOUT THE ANNUAL
MEETING
What will stockholders be voting on
at the Meeting?
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1.
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To elect five (5) persons to our Board of Directors, each to serve for a term of one year;
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2.
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To ratify the appointment of BF Borgers, CPA P.C. as the Company’s independent registered public accountant to audit the Company’s financial books and records for its fiscal year ending December 31, 2020;
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To transact such other business as may properly come before the meeting or any adjournment thereof.
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Who is entitled to vote at the Meeting
and how many votes do they have?
Common stockholders of record at the
close of business on the Record Date, June 1, 2020, may vote at the Meeting. Each share of Common Stock has one vote.
There were 36,640,939 shares of our Common Stock, 60,000 shares of Series “A” Convertible Preferred Stock and
475,000 shares of Series “B” Convertible Preferred Stock outstanding on the Record Date. Each share of Series
“A” Convertible Preferred Stock entitles the holder thereof to 1,250 votes on all matters submitted to a vote of
the shareholders. Each share of Common Stock and Series B Convertible Preferred Stock entitles the holder to 1 vote.
What percentage of our Common Stock
do the directors and executive officers own?
Our current Board of Directors owns 71.6%
of our issued and outstanding voting stock in the aggregate.
How do I vote?
You must be present, or represented by
proxy, at the Meeting to vote your shares. Even if you plan to attend the Meeting, we encourage you to vote your shares by proxy.
Since we expect that many of our common stockholders will be unable to attend the Meeting in person, we send proxy cards to all
our common stockholders to enable them to vote either by direct mail, email submission, or via delivered electronic means.
What is a proxy?
A proxy is a person you appoint to vote
on your behalf. If you complete and return the enclosed proxy card, your shares will be voted in accordance with your instructions
by the proxies identified on the proxy card.
By completing and returning this proxy
card, who am I designating as my proxy?
You will be designating Dominic Colvin,
our Chief Executive Officer as your proxy. He may act on your behalf and will have the authority to appoint a substitute to act
as proxy.
How will my proxy vote my shares?
Your proxy will vote according to the instructions
on your proxy card.
We do not intend to bring any other matter
for a vote at the Meeting, and we do not know of anyone else who intends to do so. However, your proxies are authorized to vote
on your behalf, in their discretion, on any other business that properly comes before the Meeting or any adjournments or postponements
thereof.
How do I vote using my proxy card?
Simply complete, sign and date the enclosed
proxy card and return it in the postage-paid, self-addressed envelope provided or via email (PDF or JPEG format attachment) to
proxy@Cannapharmarx.com.
How do I change or revoke my proxy?
You may change or revoke your proxy at
any time before your shares are voted at the Meeting by:
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executing and delivering another later dated proxy card;
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notifying the Company’s Corporate Secretary, in writing at that you are changing or revoking your proxy; or
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attending and voting by ballot in person at the Meeting.
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Attendance at the Meeting will not itself
revoke a proxy. All signed proxies that have not been revoked will be voted at the Meeting. If your proxy contains any specific
instructions, they will be followed.
Who will count the votes?
An inspector of election designated by
the Board will count the votes.
What constitutes a quorum?
A quorum, which is necessary to conduct
business at the Meeting, constitutes a majority of the outstanding shares of our Common Stock entitled to be cast at the Meeting,
present in person or represented by proxy. If you sign and return your proxy card, your shares will be counted in determining the
presence of a quorum, even if you withhold your vote or abstain from voting. If a quorum is not present at the Meeting, the Chairperson
of the Meeting or the stockholders present in person or by proxy may adjourn the Meeting to a date not more than 120 days after
the Record Date, until a quorum is present.
What are my voting choices when voting
on director nominees, and what vote is needed to elect directors?
When voting on the election of director
nominees to serve until the 2021 Annual Meeting of Stockholders and until their successors are elected, you may:
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vote in favor of all nominees;
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withhold votes as to all nominees; or
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withhold votes as to one or more specific nominees.
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A nominee is elected to the Board if a
plurality of votes cast in the election of directors is cast “for” the nominee. Any votes withheld will not be counted
in determining the number of votes cast and, therefore, will have no effect on the outcome of the proposal. In the event that any
nominee for director is unavailable for election, the Board may either reduce the number of directors or choose a substitute nominee.
If the Board chooses a substitute nominee, the shares represented by a proxy will be voted for the substitute nominee, unless other
instructions are given in the proxy.
The Board recommends that the stockholders
vote “FOR” all of the nominees.
What vote is required to approve each Proposal?
Proposal No. l. Election of Directors.
The election of each director nominee requires the affirmative vote of a plurality of the votes cast, if a quorum is present, in
the election of directors.
Proposal No. 2. Ratification of Auditors.
An affirmative vote of a majority of the votes cast at the Meeting, if a quorum is present, is required for ratification of the
selection of BF Borgers, CPA P.C., as independent auditors for the fiscal year ending December 31, 2020.
What are my voting choices when voting
on the ratification of the appointment of BF Borgers, CPA P.C. as our independent registered public accounting firm?
When voting on the ratification of the
appointment of BF Borgers, CPA P.C. as our independent registered public accounting firm, you may:
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vote in favor of the ratification;
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vote against the ratification; or
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The affirmative vote of a majority of the
votes cast is required for approval of the ratification of BF Borgers, CPA P.C. Abstentions will not be counted in determining
the number of votes cast and, therefore, will have no effect on the outcome of the proposal.
The Board recommends that the stockholders
vote “FOR” the ratification of BF Borgers, CPA P.C.
What if I do not specify a choice for
a matter when returning a proxy?
If you sign your proxy but do not give
voting instructions, the individuals named as proxy holders on the proxy card will vote “FOR” the election of all nominees
and “FOR” the ratification of BF Borgers, CPA P.C. and in their discretion on any other matters that may properly come
before the Meeting.
Will my shares be voted if I do not
provide my proxy or vote at the Meeting?
If you do not provide your proxy or vote
at the Meeting and you are a stockholder whose shares of Common Stock are registered directly in your name with our transfer agent
(Mountain Share Transfer, LLC.), your shares of Common Stock will not be voted.
If you do not provide your proxy or vote
at the Meeting and you are a stockholder whose shares of Common Stock are held in street name with a bank, brokerage firm or other
nominee (i.e., in “street name”), your nominee may vote your shares in its discretion on the proposal to elect directors
and the proposals to ratify BF Borgers, CPA P.C. The election of directors and the ratification of our independent registered public
accounting firm are “routine matters” on which nominees are permitted to vote on behalf of their clients if no voting
instructions are furnished.
Who is soliciting my proxy, how is it
being solicited and who pays the cost?
The Board is soliciting your proxy for
the Meeting. The solicitation process is being conducted primarily by mail. However, proxies may also be solicited in person, by
telephone, facsimile or other electronic means. We pay the cost of soliciting proxies and may use employees to solicit proxies
and also reimburse stockbrokers and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for
forwarding proxy and solicitation material to the owners of our Common Stock.
What does it mean if I receive more
than one proxy card?
If you receive more than one proxy card,
it means you have multiple accounts with our transfer agent, and to vote all your shares you will need to sign and return all proxy
cards.
May stockholders ask questions at the
Meeting?
Yes. At the end of the meeting our representatives
will answer questions from stockholders.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain
information regarding the ownership of Common Stock as of the date of this Proxy Statement, by (i) each person known to us to own
more than 5% of our outstanding Common Stock as of the date of this Proxy Statement, (ii) each of our directors, (iii) each of
our executive officers, and (iv) all of our directors and executive officers as a group. Unless otherwise indicated,
all shares are owned directly and the indicated person has sole voting and investment power. The address for each Beneficial Owner
named is the address of our principal executive office. The percentage of ownership is based upon 36,486,999 Common Shares, 60,000
Series A Convertible Preferred Shares and 475,000 Series B Convertible Preferred Shares issued and outstanding as of the date hereof.
Title of Class
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Name of Beneficial Owner
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Amount and Nature of Beneficial Ownership
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Percent of Class
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Common
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Dominic Colvin(1)
Suite 206
1180 Sunset Drive
Kelowna, BC, Canada Z1Y 9W6
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6,988,963 (3)
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6.2%
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Series A Preferred
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James Samuelson(1)
2 Park Plaza
Suite 1200B
Irvine, CA 92614
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31,000,000 (2)
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27.7%
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Series A Preferred
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Matt Nicosia(1)
2 Park Plaza
Suite 1200B
Irvine, CA 92614
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32,500,000 (2)(4)
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29%
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Series A Preferred
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Andrew Steedman(1)
3600, 888 – 3rd Street SW
Calgary, Alberta
Canada T2P 5C5
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5,000,000(2)
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4.5%
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Series A Preferred
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John Cassels(1)
3600, 888 - 3rd Street SW
Calgary, Alberta
Canada T2P 5C5
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5,000,000(2)
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4.5%
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Common and Series A Preferred
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All Officers and Directors as a Group (7 persons)
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80,488,963 (2)
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71.9%
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(1)
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Officer and/or Director of the Company.
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(2)
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Of these shares, an aggregate of 20,000 Series
A Preferred Shares were transferred to Messrs. Samuelson and Nicosia from a former officer and director of the Company due to
his failure to pay for these shares. Each share of Series A Preferred entitles the holder thereof to 1,250 votes on all
submitted to a vote of the shareholders,
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(3)
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Includes 4,229,454 shares held in the name of PLC International Investments Inc..
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(4)
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These shares are owned by OCIFG, Inc. which is a company owned by a trust to which Mr. Nicosia is trustee. As such he controls the disposition of these shares.
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The primary responsibility of the Board is to foster the long-term
success of the Company consistent with its fiduciary duty to the stockholders. The Board has responsibility for establishing broad
corporate policies, setting strategic direction, and overseeing management, which is responsible for the day-to-day operations
of the Company. In fulfilling this role, each director must act in good faith in a manner he reasonably believes to be in the best
interests of the Company with the care an ordinarily prudent person in a like position would use under similar circumstances. The
directors are regularly kept informed about our business at meetings of the Board and through supplemental reports and communications.
The Board held one (1) meetings in FY 2019
and took action by consent pursuant to the laws of the State of Delaware on twelve (12) occasions. Directors are expected to
attend Board meetings, the Annual Meeting of Stockholders and meetings of the Committees on which they serve, with the understanding
that on occasion a director may be unable to attend a meeting. During 2019, each nominee for a director who was a director during
2019 attended more than 75% of the aggregate number of meetings of the Board.
Communications
with the Board
Stockholders and other interested parties
who wish to communicate with the Board may do so by writing to:
Dominic Colvin, CEO
Cannapharmarx, Inc.
3600, 888 3rd St., SW
Calgary, Alberta, Canada T2P5C5
Committees
of the Board
As of the date of this Proxy Statement
we have not established any committees but expects to do so in the immediate future.
PROPOSAL 1—ELECTION OF DIRECTORS
In accordance with our current Bylaws,
Board members are elected to one-year terms. Our Bylaws provide for the election of directors at the Annual Meeting of shareholders.
Each director serves until his or her successor is elected and qualified, or until his or her resignation or removal. Directors
are elected by a plurality of the votes cast, so that only votes cast “for” directors are counted in determining which
directors are elected.
The size of the Board of Directors will
remain as previously set at five directors, all of whom are running for re-election. Therefore, the five directors receiving the
most votes “for” will be elected. Broker non-votes (if any) and withheld votes will be treated as shares present for
purposes of determining the presence of a quorum but will have no effect on the vote for the election of directors. Information
with respect to the nominees proposed for election is set forth below.
The Board of Directors recommends a vote
FOR the director nominees. The persons named in the accompanying proxy card will vote for the election of the nominees named
in this proxy statement unless shareholders specify otherwise in their proxies. If any nominee at the time of election is unable
to serve, or otherwise is unavailable for election, and if other nominees are designated by the Board of Directors, the persons
named as proxy holders on the accompanying proxy card intend to vote for such nominees. Management is not aware of the existence
of any circumstance which would render the nominees named below unavailable for election. All of the nominees are currently directors
of the Company.
Nominees for Directors
Set forth below are the names and ages of the nominees for directors
of our Company.
Dominick Colvin, 52, was
appointed as our Chief Executive Officer, President and a director in April 2018. He resigned these positions in November 2018
but was re-appointed to these positions again in February 2019. In addition to his positions with our Company, since June 2007
Mr. Colvin has been President of PLC International Investments, Inc., a private held Canadian company engaged in power production,
oil and coal mining.
Matthew
Nicosia, 45, was appointed as a director of our Company in April 2018. Since November 2006, Mr. Nicosia has also been
the Chairman and CEO of Vivakor Inc., a Nevada corporation based in Irvine, CA, whose common stock trades on the OTC Markets, which
is an asset acquisition company focused on the natural resources and precious metals industry. In addition, from January 2011
through March 2012, Mr. Nicosia was founder, Chairman and CEO of Regeneca, Inc. a Southern California-based skin care company,
which produced consumer, prescription and OTC products distributed through plastic surgeons and dermatologists as well as through
retail and other mass-marketing channels. Mr. Nicosia received his Bachelor of Arts degree in International Relations and Portuguese
from Brigham Young University in 1997 and an MBA from Pepperdine University in 2002. Mr. Nicosia is fluent in Portuguese
and Spanish.
James Samuelson, 50 was appointed
as a director of our Company in April 2018. In November 2018, he was appointed as our President and CEO, positions he held until
February 2019, when he resigned his positions as an officer of our Company but has remained as a director. Since June 2017, Mr.
Samuelson has served as a consultant to Vivakor, Inc., a Nevada corporation based in
Irvine, CA, whose common stock trades on the OTC Markets which is an asset acquisition company focused on the natural resources
and precious metals industry. From January 2006 to June 2016, Mr. Samuelson served as CEO and President of Mid-America Renewable
Fuels, Inc., a privately held company engaged in the development and acquisition of renewable energy facilities. Prior to 2006,
Mr. Samuelson served as the Chief Financial Officer of a publicly traded technology company headquartered in Berlin, Germany and
worked as an investment banker in Paris, France and Vienna, Austria. Mr. Samuelson received a B.S.B.A. in 1992 and a MBA in 1996,
both from Creighton University.
Marc Branson, 44 was appointed
as a director of our Company in April 2019. In addition, since January 2018 has the owner and co-founder of Titan Technologies,
Inc., Vancouver, British Columbia, Canada, a development stage privately held technology company focused on AI powered block chain
solutions for businesses. Since October 2016 he has also been the President and director of Catalina Gold Corp., a publicly traded
Canadian company. Previously, from October 2013 through June 2015 he was President and a director of Lightning Ventures Inc., a
publicly held manufacturer and distributor of specialty oil and gas products. Since 2007 he has also been President and a director
of CapWest Investments., a private investment corporation that focuses on development stage companies. He received a degree in
International Business from Open Learning University in 2000 and received a Business Management certificate from Capilano College
in 1997.
Richard D. Orman, 71, was
appointed as a director of our Company in April 2019. In addition, he is currently the President of PLM Consultants, LTD, Calgary,
Alberta, Canada, a privately held business consulting company, a position he has held since 1982. In 1986 Mr. Orman was elected
to the Legislative Assembly of Alberta and was appointed to the provincial cabinet as Minister of Career Development and Employment.
In 1988 he was appointed Minister of Labour. He was re-elected in 1989 and was then appointed Minster of Energy. He has over 35
years of experience with publicly traded companies in Canada, including Chairman and CEO of Kappa Energy Company, Inc., from 19914
to2001, a director of Vanguard Oil Corp. from 1998 through 2001, and Executive Vice Chairman of Exceed Energy Company, Inc. from
2003 through 2005, Each of the aforesaid companies had their securities traded on the Toronto Stock Exchange. In addition, he was
Vice Chairman of Novatel Inc., a company traded on NASDAQ from 2004 through 2007 and from 2007 through 2011 he was the lead director
of Daylight Energy Ltd, also traded on the TSX. From 2015 through February 2019 he was a consultant and senior counsel at Canadian
Strategy Group, a government relations firm located in Edmonton, Alberta. In 2012 he was elected to the Board of Directors and
currently services as Chairman of the Board of Wescan Energy Corp. a company traded on the TSX. In 2016 he was elected and currently
serves an independent non-executive director of Persta Resources, Inc., a company traded on the Hong Kong Stock Exchange. Mr. Orman
received a Bachelor of Arts degree with honors from Eastern Washington University in 1971.
All of the directors nominated to serve
as directors are directors presently. We did not utilize any third-party search firms to assist in identifying potential director
candidates during FY 2018. The Board has affirmatively determined that each of the following nominees for director is independent:
Mr. Orman and Mr. Branson. Dominic Colvin is currently our President and CEO, as well as a director of our Company. Messrs. Samuelson
and Nicosia are currently directors and principal shareholders.
Each of the above persons, if elected,
will serve as directors until the Annual Meeting of Stockholders held in 2020 and the election and qualification of the director’s
respective successor or until the director’s earlier death, removal or resignation.
All nominees have consented to be named
and have agreed to serve if elected. Although it is not anticipated that any of the persons named above will be unable or unwilling
to stand for reelection, a proxy, in the event of such occurrence, may be voted for a substitute nominee to be designated by the
Board, or, as an alternative, the Board may reduce the number of directors to be elected at the Meeting or leave the position(s)
vacant.
Director
Compensation
We paid each of our current officers and
directors a one-time fee of $27,500 in 2018. In January 2019, the Board authorized and approved a monthly director fee of $10,000
(US) for each director. All of these fees have been accrued.
We do not believe
risks arising from our compensation policies and practices for our employees are reasonably likely to have a material adverse effect
upon us
Equity Compensation
Plans
As of the date of this Report we do not
have any equity compensation plan but may adopt one or more in the future.
OUR EXECUTIVE OFFICERS
The following individuals currently serve
as our executive officers. Ages are as of December 31, 2018.
Name
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Age
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Position
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Dominic Colvin
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52
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Chief Executive Officer, President
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John Cassels
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72
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Chief Financial Officer, Secretary
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Andrew Steedman
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59
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Chief Operating Officer
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EXECUTIVE COMPENSATION
Compensation
Discussion and Analysis
We do not have a Compensation Committee
but may appoint one in the future. Our Board of Directors currently handles all compensation issues. The Board’s primary
objectives in determining executive officer compensation has been to:
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develop an overall compensation package that is at market levels and thus fosters executive officer retention; and
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aligning the interests of our executive officers with our stockholders by linking a portion of the compensation package to performance.
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SUMMARY COMPENSATION TABLE
Name and Position
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Year
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Salary ($)
|
|
Total ($)
|
Dominic Colvin, CEO (1)
|
|
2019
|
|
64,038
|
|
64,038
|
|
|
2018
|
|
27,500
|
|
27,500
|
|
|
|
|
|
|
|
Gary Herick, CFO, Secretary (2)
|
|
2019
|
|
56,500
|
|
56,500
|
|
|
2018
|
|
199,300
|
|
199,300
|
|
|
|
|
|
|
|
Jim Samuelson (3)
|
|
2018
|
|
27,500
|
|
27,500
|
___________________________
|
(1)
|
Was appointed as our CEO, President and a director in April
2018. Mr. Colvin resigned his positions with our Company in November 2018. In February 2019 he was again appointed as our President,
CEO and a director.
|
|
(2)
|
Mr. Herick was appointed as our, CEO, President, CFO, Secretary
and sole director in April 2016. He resigned his position as CEO in April 2018. He resigned all of his positions with us
in April 2019.
|
|
(3)
|
Mr.
Samuelson was appointed as our President and CEO in November 2018 when Mr. Colvin resigned from those positions. He
resigned as our President and CEO in February 2019 but remains a director.
|
Director
Compensation
Effective
January 1, 2019, our Board of Directors adopted a policy granting each of our directors, except for Mr. Colvin, our CEO, annual
compensation of $120,000, payable in $10,000 increments on a monthly basis. As of the date of this Proxy Statement, all compensation
has been accrued. Further refinement and compensation for officers and directors will be established by the Compensation
Committee in the future once this Committee is formed. Since inception such agreements had been established by our Board of Directors.
Employment Agreements
Each of our officers have an employment
agreement with us that provides for annual compensation of $120,000 (CAD). It also provided for a signing bonus of $20,000 (US),
six weeks annual vacation, reimbursement of expenses and participation in any stock plan and benefit packages adopted by the Company.
As of the date hereof, we have not adopted a stock plan.
The
Board Recommends that You Vote “FOR”
each
of the nominees named in Proposal 1.
PROPOSAL 2—RATIFICATION OF BF BORGERS,
CPA P.C. AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors has appointed BF
Borgers, CPA P.C., as our independent registered public accounting firm for the years ending December 31, 2019, 2018 and 2017.
A representative of BF Borgers, CPA P.C. is expected to be present at the Meeting, will have an opportunity to make a statement
if he so desires and will be available to respond to appropriate questions.
Stockholder ratification of the appointment
of our independent registered public accounting firm is not required by our bylaws or otherwise. However, our Board is submitting
the appointment of BF Borgers, CPA P.C. to the stockholders for ratification as a matter of what it considers to be good corporate
practice. Even if the appointment is ratified, our Board in its discretion may direct the appointment of a different independent
registered public accounting firm at any time during the year if the Board determines that such a change would be in our and our
stockholders’ best interests.
Fees
Paid to Independent Registered Public Accounting Firms
The following table presents fees for professional
audit services rendered by B F Borgers, CPA P.C., our independent auditors, during our fiscal year ended December 31, 2019 and
2018:
|
|
December 31, 2019
|
|
|
December 31, 2018
|
|
Audit Fees
|
|
$
|
125,600
|
|
|
$
|
135,400
|
|
Tax Fees
|
|
|
|
|
|
|
|
|
All Other Fees
|
|
|
|
|
|
|
–
|
|
Total
|
|
$
|
125,600
|
|
|
$
|
135,400
|
|
Audit Fees.
Consist of amounts billed for professional services rendered for the audit of our annual financial statements included in our annual
reports on Form 10-K for the years ended 2019, 2018, 2017, 2016 and 2015 and reviews of our interim financial statements included
in our Quarterly Reports on Form 10-Q.
Tax Fees. Consists
of amounts billed for professional services rendered for tax return preparation, tax planning and tax advice.
All Other Fees.
Consists of amounts billed for services other than those noted above.
The
Board Recommends that You Vote “FOR”
the
ratification of BF Borgers, CPA P.C.
Certain
Relationships and Related Transactions
Related Party Transactions
Accounts payable and accrued payroll-related
parties as of December 31, 2019, included interest-free loans of $75,000 and $250,000 from James Samuelson, a director and the
Company’s CEO and a director, respectively.
We have accrued salaries for officers and
employees of $154,291, and $102,805 of accounts payable due to officers and employees.
From April 1, 2018 through March 2019,
the Company’s principal place of business was located at 2 Park Plaza, Suite 1200, Irvine, CA 92614. This space was provided
to the Company on a twelve-month term by a company of which Mr. Nicosia, one of the Company’s directors, serves of the President
and CEO. The monthly rent at that location was $1,000, however, as of the date of this report, the Company has not made any rent
payments and continues to accrue those amounts as accounts payable.
Effective on March 2019, the Company changed
its principal place of business to Suite 206 1180 Sunset Drive, Kelowna, BC, Canada Z1Y 9W6, which the Company has rented pursuant
to an oral sublease from PLC International Investments Inc, a company owned and controlled by Dominic Colvin, the Company’s
current CEO, President and a director. This location consists of approximately 500 sq. feet. The Company paid a monthly rent of
$1,500 (CAD).
Effective March 22, 2019, the Company changed
its principal place of business and leases three offices at 3600 888 3 St SW, Calgary, Alberta, Canada, T2P 5C5. The lease may
be terminated by either party on 30 days’ notice. Rent is $4,000 CAD per month. This space was provided by a company to which,
Mr. Orman, one of the Company’s directors, serves as a Director
During the year
ended December 31, 2018 we paid Mr. Herick a total of $121,000 for accrued salary and expenses, plus an additional $50,000 in officer
compensation. We also paid each of our directors, including Mr. Herick, a one-time fee of $27,500 for their service to us.
During the year
ended December 31, 2019, the Company accrued director fees of $10,000 USD per month per director.
In April 2018, we issued 60,000 shares
of our Series A Convertible Preferred Stock at a price of $1.00 per share to our current management, all of whom are accredited
investors. Each share of Series A Convertible Preferred Stock is convertible into 1,250 shares of common stock and vote on an as
converted basis. The rights and designations of these Preferred Shares include the following:
|
·
|
entitles the holder thereof to 1,250 votes on all matters submitted to a vote of the shareholders;
|
|
·
|
The holders of outstanding Series A Convertible Preferred Stock shall only be entitled to receive dividends upon declaration by the Board of Directors of a dividend payable on our Common Stock whereupon the holders of the Series A Convertible Preferred Stock shall receive a dividend on the number of shares of Common Stock in to which each share of Series A Convertible Preferred Stock is convertible;
|
|
·
|
Each Series A Preferred Share is convertible into 1,250 shares of Common Stock; and
|
As of December 30, 2019, there was $150,000
due to claims received from two former directors, which was purported to be accrued salaries arising out of services provided in
2015 and 2016. Management is in the process of reviewing these claims.
There was $150,000
due to two former directors, which consists of accrued salaries arising out of services provided in 2015 and 2016. We are currently
in discussions with these individuals to settle this obligation.
SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange
Act of 1934 requires our executive officers and directors and persons who own more than 10% of our voting securities to file reports
of ownership and changes in ownership of our equity securities with the Securities and Exchange Commission (“SEC”).
Executive officers, directors and greater than 10% stockholders are required by SEC regulations to furnish us with copies of all
Section 16(a) forms they file. To our knowledge, based solely upon a review of Section 16(a) reports furnished to us for fiscal
year 2019 or written representations that no other reports were required, we believe that all of our officers and directors met
their filing requirements under Section 16(a) for fiscal year 2019, except that these reports were filed late.
2019 ANNUAL REPORT TO STOCKHOLDERS
A copy of our 2019 Annual Report to Stockholders
that includes all financial statements and schedules is available on our website, www.cannapharmarx.com, as well as on the SEC
website at www.sec.gov.
OTHER MATTERS
As of the date of this Proxy Statement
the Board does not intend to present any matter for action at the 2020 Annual Meeting of Stockholders other than as set forth in
the Notice of Annual Meeting. If any other matters properly come before the Meeting, or any adjournment or postponement thereof,
it is intended that the holders of the proxies will act in accordance with their best judgment.
STOCKHOLDER PROPOSALS FOR
2021 ANNUAL MEETING OF STOCKHOLDERS
To be eligible for inclusion in the proxy
materials for the Company’s 2021 Annual Meeting of Stockholders, stockholder proposals must be received at the Company’s
principal executive offices, Attention: Corporate Secretary, by December 29, 2020. We will consider written proposals received
by that date for inclusion in our proxy statement in accordance with regulations governing the solicitation of proxies. A stockholder
who wishes to present a proposal at the Company’s 2021 Annual Meeting of Stockholders, but who does not request that the
Company solicit proxies for the proposal, must submit the proposal to the Company’s principal executive offices, Attention:
Corporate Secretary, no earlier than December 29, 2020, and no later than January 28, 2021.
Our Corporate Secretary must receive written
notice of a stockholder’s intent to make such nomination or nominations at the 2020 Annual Meeting of Stockholders not later
than the close of business on January 28, 2020, and not earlier than the close of business on December 29, 2020.
Each notice of a stockholder proposal must set forth:
|
·
|
as to each person whom the stockholder proposes to nominate for election or reelection as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest (even if an election contest is not involved), or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934 (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and
|
|
·
|
as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and of the beneficial owner, if any, on whose behalf the proposal is made.
|
The stockholder giving the notice, and
the beneficial owner, if any, on whose behalf the nomination or proposal is made, must set forth:
|
·
|
the name and address of such stockholder, as they appear on our books, and of such beneficial owner; and
|
|
·
|
the number of shares of each class of our stock which are owned beneficially and of record by such stockholder and such beneficial owner.
|
If the Board has determined that directors
will be elected at a special meeting of stockholders, any stockholder of the Company who is a stockholder of record both at the
time of giving of notice of such meeting and at the time of the special meeting, and who is entitled to vote at the meeting and
who complies with the notice procedures in the next sentence may nominate a person for election to the Company’s Board. Such
stockholder must deliver a notice containing the information described above to the Corporate Secretary not earlier than the close
of business on the 120th day prior to such special meeting and not later than the close of business on the later of
the 90th day prior to such special meeting or the tenth day following the day on which public announcement is first
made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting.
These requirements are separate from the
requirements of the SEC that a stockholder must meet to have a proposal included in our proxy statement.
We will also furnish any stockholder a
copy of our bylaws without charge upon written request to the Corporate Secretary.
|
By Order of the Board,
|
|
|
|
|
|
John Cassels
|
|
Corporate Secretary
|
July 1, 2020
PROXY --- Cannapharmarx, Inc. ---
PROXY
The
undersigned hereby appoints Dominic Colvin with power of substitution, as proxy to vote the shares of Common and/or Series A Preferred
Shares of the undersigned in Cannapharmarx, Inc. at the Annual Meeting of Shareholders to be held at the officer of the Company
located at Suite 206, 1180 Sunset Drive, Kelowna, BC, Canada Z1Y 9W6 on Friday, August 21, 2020 at 10:00 am local time and at any
adjournment thereof, upon all business that may properly come before the meeting, including the business identified (and in the
manner indicated) on this proxy and described in the proxy statement furnished herewith. Indicate your vote by an þ.
It is recommended that you vote FOR all items.
Proposals
1.
|
To elect the following persons as directors of the Company
|
|
Dominic Colvin
|
|
o
|
FOR
|
|
o
|
AGAINST
|
|
o
|
ABSTAIN
|
|
Matt Nicosia
|
|
o
|
FOR
|
|
o
|
AGAINST
|
|
o
|
ABSTAIN
|
|
James Samuelson
|
|
o
|
FOR
|
|
o
|
AGAINST
|
|
o
|
ABSTAIN
|
|
Marc R. Bronson
|
|
o
|
FOR
|
|
o
|
AGAINST
|
|
o
|
ABSTAIN
|
|
Richard D. Orman
|
|
o
|
FOR
|
|
o
|
AGAINST
|
|
o
|
ABSTAIN
|
2.
|
To ratify the appointment of BF Borgers, CPA P.C. as the Company’s independent registered public accountant, to audit the Company’s financial books and records for its fiscal year ending December 31, 2019.
|
o
|
FOR
|
o
|
AGAINST
|
o
|
ABSTAIN
|
(Please
return promptly in the stamped, enclosed envelope.)
THIS PROXY IS SOLICITED ON BEHALF OF THE
COMPANY’S BOARD OF DIRECTORS WHO RECOMMEND VOTING FOR ALL ITEMS. IT WILL BE VOTED AS SPECIFIED. IF NOT SPECIFIED,
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR ALL ITEMS.
_____/_____/_____
|
________________________________________
|
Date
|
Signature
|
|
|
_________________________
|
________________________________________
|
No. of Shares
|
Printed Name
|
Please sign exactly as name(s) appear on
this proxy. If joint account, each joint owner should sign. If signing for a corporation or partnership or as agent, attorney or
fiduciary, indicate the capacity in which you are signing.
ADDITIONAL SIGNATURES:
|
___________________________________________
|
(if necessary)
|
Signature
|
|
|
|
________________________________________
|
|
Printed Name
|
PLEASE DATE AND SIGN THE ACCOMPANYING PROXY
CARD AND EITHER MAIL OR EMAIL IT PROMPTLY TO THE STREET OR E-MAIL ADDRESS AS PROVIDED HEREIN. IF BY REGULAR MAIL, PLEASE SEND TO
THE ATTENTION OF JOHN CASSELS, SECRETARY, 3600, 888 3rd STREET SW, CALGARY, AB, CANADA T20 5C5, OR ELECTRONICALLY TO
PROXY@CANNAPHARMARX.COM.
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