UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14C INFORMATION
Information
Statement Pursuant to Section 14(c)
of
the Securities Exchange Act of 1934
Check
the appropriate box:
| ☒ |
Preliminary
Information Statement |
| ☐ |
Confidential,
for use of the Commission only (as permitted by Rule 14c-5(d)(2)) |
| ☐ |
Definitive
Information Statement |
| |
ELEVAI
LABS INC. |
|
| |
(Name of Registrant As Specified
In Charter) |
|
Payment
of Filing Fee (Check the appropriate box):
| ☐ |
Fee paid previously with
preliminary materials. |
| ☐ |
Fee computed on table in
exhibit required by Item 25(b) of Schedule 14A (17 CFR 240.14a-101) per Item 1 of this Schedule and Exchange Act Rules 14c-5(g) and
0-11 |
ELEVAI
LABS INC.
120
Newport Center Drive
Newport
Beach, CA 92660
INFORMATION
STATEMENT
(Preliminary)
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED
NOT TO SEND US A PROXY
NOTICE
OF SHAREHOLDER ACTION BY WRITTEN CONSENT
GENERAL
INFORMATION
To
the Holders of Common Stock of Elevai Labs Inc.:
This
Information Statement is first being mailed on or about August 26, 2024 to the holders of record of the outstanding voting stock, $0.0001
par value per share (“Common Stock”), of Elevai Labs Inc., a Delaware corporation (the “Company”), as of the
close of business on August 12, 2024 (the “Record Date”), pursuant to Rule 14c-2 promulgated under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”). This Information Statement relates to actions taken by written consent in lieu
of a meeting (the “Written Consent”) of the shareholders of the Company owning a majority of the voting power of the outstanding
shares of stock (the “Majority Shareholders”) as of the Record Date. Except as otherwise indicated by the context, references
in this Information Statement to “we,” “us” or “our” are references to Elevai Labs Inc., a Delaware
corporation.
The
Written Consent:
| 1. |
approved an amendment to
our third amended and restated certificate of incorporation (“Certificate of Incorporation”), to effect a reverse stock
split (the “Split”) of our common stock at a reverse stock split ratio ranging from 1:2 to 1:40 inclusive, as determined
by our Board in its sole discretion (the “Approval of Certificate of Incorporation Amendment for Split”); and |
| |
|
| 2. |
approved an amendment to
our Certificate of Incorporation to increase the total number of authorized shares (the “Increase in Authorized Shares”)
from three hundred seventy-five million (375,000,000) shares to two billion five hundred million (2,500,000,000) shares, consisting
of two billion (2,000,000,000) shares of common stock and five hundred million (500,000,000) shares of preferred stock (the “Approval
of Certificate of Incorporation Amendment for Increase in Authorized Shares”). |
| |
|
The
Written Consent constitutes the consent of a majority of the voting power of the outstanding shares of stock and is sufficient under
the Delaware General Corporation Law and our amended and restated bylaws (“Bylaws”) to approve the actions described herein.
Accordingly, the Approval of Certificate of Incorporation Amendment for Split and the Approval of Certificate of Incorporation Amendment
for Increase in Authorized Shares are not presently being submitted to our other shareholders for a vote. Pursuant to Rule 14c-2 under
the Exchange Act, the action described herein will not be implemented until a date at least twenty (20) days after the date on which
this Information Statement has been first mailed to the shareholders.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND A PROXY.
This
Information Statement has been filed with the U.S. Securities and Exchange Commission (the “SEC”) and is being furnished,
pursuant to Section 14C of the Exchange Act to the holders of voting and non-voting stock (“Shareholders”) to notify the
Shareholders of the approval of the Approval of Certificate of Incorporation Amendment for Split and the Approval of Certificate of Incorporation
Amendment for Increase in Authorized Shares. Shareholders of record at the close of business on August 12, 2024 are entitled to notice
of the Written Consent. Because this action has been approved by the holders of the required majority of the voting power of our outstanding
shares of stock, no proxies were or are being solicited. The Approval of Certificate of Incorporation Amendment for Split and the Approval
of Certificate of Incorporation Amendment for Increase in Authorized Shares will not be effected until at least 20 calendar days after
the mailing of the Information Statement accompanying this notice. We will mail the Notice of Shareholder Action by Written Consent to
the Shareholders on or about August 26, 2024.
PLEASE
NOTE THAT THIS IS NOT A NOTICE OF A HEREIN. THIS INFORMATION STATEMENT IS BEING FURNISHED TO YOU SOLELY FOR THE PURPOSE OF INFORMING
SHAREHOLDERS OF THE MATTERS DESCRIBED HEREIN PURSUANT TO SECTION 14(C) OF THE MEETING OF SHAREHOLDERS AND NO SHAREHOLDERS MEETING WILL
BE HELD TO CONSIDER THE MATTERS DESCRIBED EXCHANGE ACT AND THE REGULATIONS PROMULGATED THEREUNDER, INCLUDING REGULATION 14C.
| |
By Order of the Board of Directors, |
| |
|
| |
/s/
Braeden Lichti |
| |
Chairman of the Board of Directors |
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August 26, 2024 |
INTRODUCTION
This
Information Statement is being first mailed on or about August 26, 2024 to the Shareholders by the Board of Directors of the Company
(“Board”) to provide material information regarding the Approval of Certificate of Incorporation Amendment for Split and
the Approval of Certificate of Incorporation Amendment for Increase in Authorized Shares that have been approved by the Written Consent
of the Majority Shareholders.
Only
one copy of this Information Statement is being delivered to two or more shareholders who share an address unless we have received contrary
instruction from one or more of such shareholders. We will promptly deliver, upon written or oral request, a separate copy of the Information
Statement to a security holder at a shared address to which a single copy of the document was delivered. If you would like to request
additional copies of the Information Statement, or if in the future you would like to receive multiple copies of information statements
or proxy statements, or annual reports, or, if you are currently receiving multiple copies of these documents and would, in the future,
like to receive only a single copy, please so instruct us by writing to the corporate secretary at the Company’s executive offices
at the address specified above.
PLEASE
NOTE THAT THIS IS NOT A REQUEST FOR YOUR VOTE OR A PROXY STATEMENT, BUT RATHER AN INFORMATION STATEMENT DESIGNED TO INFORM YOU OF THE
MATTERS DESCRIBED HEREIN.
The
entire cost of furnishing this Information Statement will be borne by the Company. We will request brokerage houses, nominees, custodians,
fiduciaries and other like parties to forward this Information Statement to the beneficial owners of the shares of stock held of record
by them.
AUTHORIZATION
BY THE BOARD OF DIRECTORS
AND
THE MAJORITY SHAREHOLDERS
Under
the Delaware General Corporation Law and the Company’s Bylaws, any action that can be taken at an annual or special meeting of
shareholders may be taken without a meeting, without prior notice and without a vote, if the holders of outstanding stock having not
less than the minimum number of votes that will be necessary to authorize or take such action at a meeting at which all shares entitled
to vote thereon were present and voted to consent to such action in writing. The approval of the Approval of Certificate of Incorporation
Amendment for Split and the Approval of Certificate of Incorporation Amendment for Increase in Authorized Shares requires the affirmative
vote or written consent of a majority of the voting power of the issued and outstanding shares of stock. Each holder of Common Stock
is entitled to one vote per share of Common Stock held of record on any matter which may properly come before the shareholders.
On
the Record Date, the Company had 20,1992,114 shares of Common Stock issued and outstanding, with the holders thereof being entitled to
cast one vote per share. On August 12, 2024, the Majority Shareholders adopted resolutions approving the Approval of Certificate of Incorporation
Amendment for Split and the Approval of Certificate of Incorporation Amendment for Increase in Authorized Shares.
CONSENTING
SHAREHOLDERS
On
August 12, 2024, the Majority Shareholders, being the record holder of 11,395,682 shares of Common Stock adopted resolutions, among other
things, approving the adoption of the Approval of Certificate of Incorporation Amendment for Split and the Approval of Certificate of
Incorporation Amendment for Increase in Authorized Shares. The voting power held by the Majority Shareholders represented approximately
52.93% of the total voting power of all issued and outstanding stock of the Company as of the Record Date.
We
are not seeking written consent from any other shareholder of the Company, and the other shareholders will not be given an opportunity
to vote with respect to the Approval of Certificate of Incorporation Amendment for Split and the Approval of Certificate of Incorporation
Amendment for Increase in Authorized Shares. All necessary corporate approvals have been obtained. This Information Statement is furnished
solely for the purposes of advising shareholders of the action taken by Written Consent and giving shareholders notice of such actions
taken as required by the Exchange Act.
As
the Approval of Certificate of Incorporation Amendment for Split and the Approval of Certificate of Incorporation Amendment for Increase
in Authorized Shares actions were taken by Written Consent, there will be no security holders’ meeting and representatives of the
principal accountants for the current year and for the most recently completed fiscal year will not have the opportunity to make a statement
if they desire to do so and will not be available to respond to appropriate questions from our shareholders.
APPROVAL
OF CERTIFICATE OF INCORPORATION AMENDMENT TO EFFECT A REVERSE STOCK SPLIT OF OUR COMMON STOCK AT A REVERSE STOCK SPLIT RATIO RANGING
FROM 1:2 TO 1:40, INCLUSIVE, AS DETERMINED BY OUR BOARD IN ITS SOLE DISCRETION
Reverse
Stock Split
The
Majority Shareholders approved an amendment to our Certificate of Incorporation to effect a reverse stock split of our Common Stock at
a reverse stock split ratio ranging from 1:2 to 1:40, inclusive, as may be determined at the appropriate time by our Board in its sole
discretion (the “Reverse Stock Split”). This means that our Board will be able to decide whether and when to effect the Reverse
Stock Split without further action from the stockholders.
Reasons
for a Reverse Stock Split
Maintaining
our Listing on Nasdaq
The
primary purpose of the Reverse Stock Split is to raise the per share trading price of our common stock in order to maintain our listing
on The Nasdaq Capital Market. Delisting from Nasdaq may adversely affect our ability to raise additional financing through the public
or private sale of our equity securities, may significantly affect the ability of investors to trade in our securities and may negatively
affect the value and liquidity of our Common Stock. Delisting may also have other negative impacts, including potential loss of employee
confidence, the loss of institutional investors, the loss of analyst coverage or the loss of business development opportunities.
Potentially
Improving the Marketability and Liquidity of our Common Stock
The
Board believes that an increased stock price may also improve the marketability and liquidity of our Common Stock. For example, many
brokerages, institutional investors and funds have internal policies that either prohibit them from investing in low-priced stocks or
tend to discourage individual brokers from recommending low-priced stocks to their customers by restricting or limiting the ability to
purchase such stocks on margin. Additionally, investors may be dissuaded from purchasing stocks below certain prices because brokers’
commissions, as a percentage of the total transaction value, can be higher for low-priced stocks.
Decreasing
the Risk of Market Manipulation of our Common Stock
The
Board believes that the potential increase in stock price may reduce the risk of market manipulation of our Common Stock, which we believe
is enhanced when our stock trades below $1.00 per share. By reducing market manipulation risk, we may also thereby potentially decrease
the volatility of our stock price.
Providing
us the Ability to Issue Additional Securities
A
Reverse Stock Split is expected to increase the number of authorized, but unissued and unreserved, shares of our common stock. These
additional shares would provide flexibility to us for raising capital; repurchasing debt; providing equity incentives to employees, officers,
directors, consultants and advisors (including pursuant to our equity compensation plan); expanding our business through the acquisition
of other businesses and for other purposes. However, at present, we do not have any specific plans, arrangements, understandings or commitments
for the additional shares that would become available.
Accordingly,
for these and other reasons, the Board believes that a Reverse Stock Split is in the best interests of us and our stockholders. A copy
of the draft of the amendment to our Certificate of Incorporation providing for the Reverse Stock Split is attached hereto as Annex A.
Criteria
to be Used for Determining Whether to Implement a Reverse Stock Split
This
proposal gives our Board the discretion to select a Reverse Stock Split ratio from within a range between and including 1:2 and 1:40
on a date selected by the Board based on its then-current assessment of the factors below, and in order to maximize Company and stockholder
interests. In determining whether to implement the Reverse Stock Split, and which ratio to implement, if any, the Board may consider,
among other factors:
| ● | the
historical trading price and trading volume of our Common Stock; |
| ● | the
then-prevailing trading price and trading volume of our Common Stock and the expected impact of the Reverse Stock Split on the trading
market in the short- and long-term; |
| ● | the
continued listing requirements for our Common Stock on The Nasdaq Stock Market LLC (“Nasdaq”) or other applicable exchanges,
if then applicable; |
| ● | the
number of shares of Common Stock outstanding; and |
| ● | which
Reverse Stock Split ratio would result in the least administrative cost to us; and |
| ● | the
historical trading price and trading volume of our Common Stock. |
Certain
Risks and Potential Disadvantages Associated with a Reverse Stock Split
We
cannot assure stockholders that the proposed Reverse Stock Split will sufficiently increase our stock price or, that our stock will trade
at a price that is equal to at least $1.00 per share for a period of 10 consecutive days prior to September 3, 2024, which is the
date that we must regain compliance with Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”). If we do not regain compliance
with the Bid Price Rule prior to September 3, 2024, and we are not deemed eligible for an additional period of time to regain compliance
with the Bid Price Rule, our listed securities may be subject to delisting. The effect of a Reverse Stock Split on our stock price cannot
be predicted with any certainty, and the history of reverse stock splits for other companies in various industries is varied, particularly
since some investors may view a reverse stock split negatively. It is possible that our stock price after a Reverse Stock Split will
not increase in the same proportion as the reduction in the number of shares outstanding, causing a reduction in our overall market capitalization.
Further, even if we implement a Reverse Stock Split, our stock price may decline due to various factors, including our future performance
and general industry, market and economic conditions. This percentage decline, as an absolute number and as a percentage of our overall
market capitalization, may be greater than would occur in the absence of a Reverse Stock Split. If we fail to meet Nasdaq’s continued
listing requirements, Nasdaq could suspend trading in our Common Stock and commence delisting proceedings.
The
proposed Reverse Stock Split may decrease the liquidity of our Common Stock and result in higher transaction costs. The liquidity of
our Common Stock may be negatively impacted by the reduced number of shares outstanding after the Reverse Stock Split, which would be
exacerbated if the stock price does not increase following the split. In addition, a Reverse Stock Split would increase the number of
stockholders owning “odd lots” of fewer than 100 shares, trading in which generally results in higher transaction costs.
Accordingly, a Reverse Stock Split may not achieve the desired results of increasing marketability and liquidity as described above.
The
implementation of a Reverse Stock Split would result in an effective increase in the authorized number of shares of Common Stock available
for issuance, which could, under certain circumstances, have anti-takeover implications. The additional shares of Common Stock available
for issuance could be used by us to oppose a hostile takeover attempt or to delay or prevent changes in control or in our management.
Although the Reverse Stock Split has been prompted by business and financial considerations, and not by the threat of any hostile takeover
attempt (nor is the Board currently aware of any such attempts directed at us), stockholders should be aware that approval of the Reverse
Stock Split could facilitate future efforts by us to deter or prevent changes in control, including transactions in which stockholders
might otherwise receive a
premium for their shares over then-current market prices.
Stockholders
should also keep in mind that the implementation of a Reverse Stock Split does not have an effect on the actual or intrinsic value of
our business or a stockholder’s proportional ownership interest (subject to the treatment of fractional shares). However, should
the overall value of our common stock decline after a Reverse Stock Split, then the actual or intrinsic value of shares held by stockholders
will also proportionately decrease as a result of the overall decline in value.
Effects
of a Reverse Stock Split
As
of the effective date of the Reverse Stock Split:
| ● | a
certain number shares of Common Stock outstanding (depending on the Reverse Stock Split ratio selected by the Chief Executive Officer)
will be combined, automatically and without any action on the part of the Company or its stockholders, into one new share of Common Stock; |
| ● | no
fractional shares of Common Stock will be issued; instead, stockholders who would otherwise receive a fractional share will receive a
whole share in lieu of any fractional share of Common Stock (as detailed below); |
| ● | proportionate
adjustments will be made to the number of shares issuable upon the exercise or vesting of all then-outstanding stock options and warrants
which will result in a proportional decrease in the number of shares of Common Stock reserved for issuance upon exercise or vesting of
such stock options and warrants and, in the case of stock options, a proportional increase in the exercise price of all such stock options; |
| ● | the
number of shares of Common Stock then reserved for issuance under our equity compensation plan will be reduced proportionately; and |
| ● | the
total number of authorized shares of Common Stock will remain at 300,000,000 (or 2,000,000,000 after the filing of the Certificate of
Amendment). |
The
following table summarizes, for illustrative purposes only, the anticipated effects of a Reverse Stock Split on our shares available
for issuance based on information as of the Record Date (unless otherwise noted below) and without giving effect to the treatment of
fractional shares.
Assuming
the Reverse Stock Split is implemented by the Board:
| Status |
|
Number of
Shares of
Common
Stock
Authorized |
|
|
Number of
Shares of
Common
Stock
Issued and
Outstanding |
|
|
Number of
Shares of
Common
Stock
Reserved
for Future
Issuance(1) |
|
|
Number of
Shares of
Common
Stock
Authorized but
Unissued and
Unreserved |
|
|
Hypothetical
Initial
Market
Value of
Shares of
Common
Stock
Authorized but
Unissued and
Unreserved* |
|
| Pre-Reverse Stock Split |
|
|
300,000,000 |
|
|
|
20,192,114 |
|
|
|
2,034,962 |
|
|
|
277,772,924 |
|
|
$ |
88,609,562 |
|
| Post-Reverse Stock Split 1:2 |
|
|
300,000,000 |
|
|
|
10,096,057 |
|
|
|
1,017,481 |
|
|
|
288,886,462 |
|
|
$ |
92,154,781 |
|
| Post-Reverse Stock Split 1:40 |
|
|
300,000,000 |
|
|
|
504,803 |
|
|
|
50,874 |
|
|
|
299,444,323 |
|
|
$ |
95,522,739 |
|
| * | Based on a hypothetical post-split stock price calculated by multiplying
the closing stock price on August 15, 2024 of $0.319 by the split ratio. |
| (1) | Includes
shares of Common Stock reserved for issuance (i) upon the exercise of currently exercisable warrants and options and (ii) under
the Elevai Labs Inc. 2022 Equity Incentive Plan less any exercised or converted awards. |
A
Reverse Stock Split would affect all stockholders uniformly. As of the effective date of the Reverse Stock Split which shall be determined
by the Board in its sole discretion (“Effective Date”), each stockholder would own a reduced number of shares of Common Stock.
Percentage ownership interests, voting rights and other rights and preferences would not be affected, except to the extent that the Reverse
Stock Split would result in fractional shares (as described below).
A
Reverse Stock Split would not affect the registration of our Common Stock under Section 12(b) of the Exchange Act and
we would continue to be subject to the periodic reporting and other requirements of the Exchange Act. Barring delisting by Nasdaq,
our Common Stock would continue to be listed on Nasdaq under the symbol “ELAB,” but would have a new Committee on Uniform
Securities Identification Procedures number after the effective date.
Fractional
Shares
No
fractional shares of common stock will be issued as a result of the Reverse Stock Split. In lieu of any fractional shares to which a
stockholder of record would otherwise be entitled, we will issue a whole share in lieu of any fractional share of Common Stock.
As
of August 16, 2024, there were 59 common stockholders of record. We do not intend for this transaction to be the first step in a series
of plans or proposals of a “going private transaction” within the meaning of Rule 13e-3 of the Exchange Act.
Procedure
for Effecting a Reverse Stock Split
Beneficial
Holders of Common Stock
Stockholders
who hold their shares through a bank, broker or other nominee will be treated in the same manner as registered stockholders who hold
their shares in their names. Banks, brokers and other nominees will be instructed to effect the Reverse Stock Split for beneficial owners
of such shares. However, banks, brokers or other nominees may implement different procedures than those to be followed by registered
stockholders for processing the Reverse Stock Split, particularly with respect to the treatment of fractional shares. Stockholders whose
shares of Common Stock are held in the name of a bank, broker or other nominee are encouraged to contact their bank, broker or other
nominee with any questions regarding the procedures for implementing the Reverse Stock Split with respect to their shares.
Registered
Holders of Common Stock
Registered
stockholders hold shares electronically in book-entry form under the direct registration system (i.e., do not have stock certificates
evidencing their share ownership but instead have a statement reflecting the number of shares registered in their accounts) and, as a
result, do not need to take any action to receive post-split shares. If they are entitled to receive post-split shares, they will automatically
receive, at their address of record, a transaction statement indicating the number of post-split shares held following the Effective
Date.
Material
U.S. Federal Income Tax Consequences
The
following is a summary of material U.S. federal income tax consequences of a Reverse Stock Split to stockholders. This summary is
based on the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), U.S. Treasury regulations, administrative
rulings and judicial decisions, all as in effect on the date of this filing, and all of which are subject to change or differing interpretations,
possibly with retroactive effect. Any such change or differing interpretation could affect the tax consequences described below.
We
have not sought and will not seek an opinion of counsel or ruling from the Internal Revenue Service (the “IRS”) with respect
to the statements made and the conclusions reached in the following summary, and there can be no assurance that the IRS or a court will
agree with such statements and conclusions.
This
summary is limited to stockholders that are U.S. holders, as defined below, and that hold our Common Stock as a capital asset (generally,
property held for investment).
This
summary is for general information only and does not address all U.S. federal income tax considerations that may be applicable to
a holder’s particular circumstances or to holders that may be subject to special tax rules, such as, for example, brokers and dealers
in securities, currencies or commodities, banks and financial institutions, regulated investment companies, real estate investment trusts,
expatriates, tax-exempt entities, governmental organizations, traders in securities that elect to use a mark-to-market method of accounting
for their securities, certain former citizens or long-term residents of the U.S., insurance companies, persons holding shares of our
Common Stock as part of a hedging, integrated or conversion transaction or a straddle or persons deemed to sell shares of our Common
Stock under the constructive sale provisions of the Code, persons that hold more than 5% of our Common Stock, persons that hold our Common
Stock in an individual retirement account, 401(k) plan or similar tax-favored account or partnerships or other pass-through entities
for U.S. federal income tax purposes and investors in such entities.
This
summary does not address any U.S. federal tax consequences other than U.S. federal income tax consequences (such as estate
or gift tax consequences), the Medicare tax on net investment income, the alternative minimum tax or any U.S. state, local or foreign
tax consequences. This summary also does not address any U.S. federal income tax considerations relating to any other transaction
other than the Reverse Stock Split.
For
purposes of this summary, a “U.S. holder” means a beneficial owner of our Common Stock that is, for U.S. federal
income tax purposes:
| ● | an
individual who is a citizen or resident of the U.S.; |
| ● | a
corporation created or organized in or under the laws of the U.S., any state thereof or the District of Columbia; |
| ● | an
estate the income of which is subject to U.S. federal income taxation regardless of its source; or |
| ● | a
trust if (1) it is subject to the primary supervision of a court within the U.S. and one or more U.S. persons have the
authority to control all substantial decisions of the trust or (2) it has a valid election in effect under applicable U.S. Treasury
regulations to be treated as a U.S. person. |
If
an entity (or arrangement) classified as a partnership for U.S. federal income tax purposes holds shares of our Common Stock, the
tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership.
If a holder of our Common Stock is a partner of a partnership holding shares of our Common Stock, such holder should consult his or her
own tax advisor.
This
summary of certain U.S. federal income tax consequences is for general information only and is not tax advice. Stockholders are
urged to consult their own tax advisor with respect to the application of U.S. federal income tax laws to their particular situation
as well as any tax considerations arising under other U.S. federal tax laws (such as the estate or gift tax laws) or under the laws
of any state, local, foreign or other taxing jurisdiction or under any applicable tax treaty.
The
Reverse Stock Split is intended to be treated as a recapitalization for U.S. federal income tax purposes. Assuming the Reverse Stock
Split qualifies as a recapitalization, except as described below with respect to cash received in lieu of a fractional share, a U.S. holder
will not recognize any gain or loss for U.S. federal income tax purposes upon the Reverse Stock Split. In the aggregate, a U.S. holder’s
tax basis in the Common Stock received pursuant to the Reverse Stock Split (excluding the portion of the tax basis that is allocable
to any fractional share) will equal the U.S. holder’s tax basis in its Common Stock surrendered in the Reverse Stock Split
in exchange therefor, and the holding period of the U.S. holder’s Common Stock received pursuant to the Reverse Stock Split
will include the holding period of the Common Stock surrendered in the Reverse Stock Split in exchange therefor.
In
general, a U.S. holder who receives a cash payment in lieu of a fractional share will recognize capital gain or loss equal to the
difference between the amount of cash received in lieu of the fractional share and the portion of the U.S. holder’s tax basis
of the Common Stock surrendered in the Reverse Stock Split that is allocable to the fractional share. Such gain or loss generally will
be long-term capital gain or loss if the U.S. holder’s holding period in its Common Stock surrendered in the Reverse Stock
Split is more than one year as of the date of the Reverse Stock Split. The deductibility of net capital losses by individuals and corporations
is subject to limitations. Depending on a stockholder’s individual facts and circumstances, it is possible that cash received in
lieu of a fractional share could be treated as a distribution under Section 301 of the Code, so stockholders should consult their
own tax advisors as to that possibility and the resulting tax consequences to them in that event.
U.S. holders
that have acquired different blocks of our Common Stock at different times or at different prices are urged to consult their own tax
advisors regarding the allocation of their aggregated adjusted basis among, and the holding period of, our Common Stock.
Information
returns generally will be required to be filed with the IRS with respect to the payment of cash in lieu of a fractional share made pursuant
to the Reverse Stock Split unless such U.S. holder is an exempt recipient and timely and properly establishes with the applicable
withholding agent the exemption. In addition, payments of cash in lieu of a fractional share made pursuant to the Reverse Stock Split
may, under certain circumstances, be subject to backup withholding, unless a U.S. holder timely provides to the applicable withholding
agent proof of an applicable exemption or a correct taxpayer identification number, and otherwise complies with the applicable requirements
of the backup withholding rules. Any amounts withheld under the backup withholding rules are not additional tax and may be refunded or
credited against the U.S. holder’s U.S. federal income tax liability, provided that the U.S. holder timely furnishes
the required information to the IRS. U.S. holders should consult their tax advisors regarding their qualification for an exemption
from backup withholding and the procedures for obtaining such an exemption.
Accounting
Consequences
The
par value per share of our Common Stock will remain unchanged at $0.0001 per share following a Reverse Stock Split. As a result, as of
the Effective Date, the stated capital on our balance sheets attributable to Common Stock will be reduced proportionally based on the
Reverse Stock Split ratio, and the additional paid-in capital will be credited with the amount by which the capital is reduced. The net
income or loss per share of Common Stock will be increased as a result of the fewer shares of common stock outstanding. The Reverse Stock
Split will be reflected retroactively in our consolidated financial statements.
APPROVAL
OF CERTIFICATE OF INCORPORATION AMENDMENT TO INCREASE THE TOTAL NUMBER OF AUTHORIZED SHARES TO TWO BILLION FIVE HUNDRED MILLION (2,500,000,000)
SHARES, CONSISTING OF TWO BILLION (2,000,000,000) SHARES OF COMMON STOCK AND FIVE HUNDRED MILLION (500,000,000) SHARES OF PREFERRED STOCK
Authorized
Share Increase
Our
Board and the Majority Shareholders approved the Authorized Share Increase on August 9, 2024 and August 12, 2024, respectively.
The
effective date of the Authorized Share Increase will be determined at the sole discretion of the Board and will be publicly announced
by us. The Authorized Share Increase will become effective upon the filing of the Certificate of Amendment with the Secretary of State
of the State of Delaware. The Board may determine, in its sole discretion, not to affect the Authorized Share Increase and not to file
any amendment to our Certificate of Incorporation.
Our
Board believes it is in our best interest to increase the number of authorized shares of common stock in order to give us greater flexibility
in considering and planning for future corporate needs, including, but not limited to, potential strategic transactions, including mergers,
acquisitions and business combinations, stock dividends, grants under equity compensation plans, stock splits or financings, as well
as other general corporate transactions. The Board believes that additional authorized shares of common stock will enable us to take
timely advantage of acquisition opportunities that become available to us, as well as market conditions and favorable financing. We do
not have any definitive plans, arrangements, understandings or agreements regarding the issuance of the additional shares of common stock
that will result from the adoption of Authorized Share Increase. Except as otherwise required by law, the newly authorized shares of
common stock will be available for issuance at the discretion of our Board (without further action by our stockholders unless required
by Nasdaq) for various future corporate needs, including those outlined above. While effecting the Authorized Share Increase would not
have any immediate dilutive effect on the proportionate voting power or other rights of existing stockholders, any future issuance of
additional authorized shares of our common stock may, among other things, dilute the earnings per share of our common stock and the equity
and voting rights of those holding equity at the time the additional shares are issued.
Any
newly authorized shares of common stock will be identical to the shares of common stock that are now authorized and outstanding. The
Authorized Share Increase will not affect the rights of current holders of our common stock, none of whom have preemptive or similar
rights to acquire the newly authorized shares.
In
regard to the newly authorized preferred stock, the Board is authorized to determine the qualifications, limitations, voting and other
powers, preferences, and relative, participating, optional or other rights of such Preferred Stock.
A
copy of the draft of the amendment to our Certificate of Incorporation providing for the Increase in Authorized Shares is attached hereto
as Annex B.
Board
Discretion to Implement the Authorized Share Increase
The
Board will implement the Authorized Share Increase only upon a determination that the Authorized Share Increase is in the best interests
of the stockholders at that time. The Board may determine, in its sole discretion, not to affect the Authorized Share Increase.
Effective
Time
The
effective time of the Authorized Share Increase, if the proposed Authorized Share Increase is implemented at the direction of the Board,
will be the date and time that the certificate of amendment affecting the Authorized Share Increase is filed with the Secretary of State
of the State of Delaware or such later time as is specified therein. The exact timing of the Authorized Share Increase will be determined
by our Board based on its evaluation as to when such action will be the most advantageous to us and our stockholders, and the effective
date will be publicly announced by us. The Authorized Share Increase may be delayed or abandoned without further action by the stockholders
at any time prior to the effectiveness of the Certificate of Amendment filed with the Secretary of State of the State of Delaware, notwithstanding
the Majority Shareholder’s approval of the Authorized Share Increase, if the Board, in its sole discretion, determines that it
is in the best interests of the Company and its stockholders to delay or abandon the Authorized Share Increase.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
table below sets forth information regarding the beneficial ownership of the common stock by (i) our directors and named executive officers;
(ii) all the named executives and directors as a group and (iii) any other person or group that to our knowledge beneficially owns more
than five percent of our outstanding shares of common stock.
We have determined beneficial ownership in accordance
with the rules and regulations of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person
has or shares the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof or has the right to acquire
such powers within 60 days. Shares of common stock subject to options that are currently exercisable or exercisable within 60 days of
August 16, 2024, are deemed to be outstanding and beneficially owned by the person holding the options. Shares issuable pursuant to stock
options or warrants are deemed outstanding for computing the percentage ownership of the person holding such options or warrants but are
not deemed outstanding for computing the percentage ownership of any other person. Except as indicated by the footnotes below, we believe,
based on the information furnished to us, that the persons and entities named in the table below will have sole voting and investment
power with respect to all shares of common stock that they will beneficially own, subject to applicable community property laws. The percentage
of beneficial ownership is based on 20,804,614 shares of common stock outstanding on August 16, 2024.
| Name and Address of Beneficial Owner(1) |
|
Amount and
Nature of
Beneficial
Ownership |
|
|
Percentage of
Beneficial
Ownership Prior to this Offering |
|
| 5% or Greater Shareholders: |
|
|
|
|
|
|
| BWL Investments Ltd.(2) |
|
|
1,906,414 |
|
|
|
9.2 |
% |
| JP Bio Consulting LLC(3) |
|
|
2,851,454 |
|
|
|
13.7 |
% |
| Hatem Abou-Sayed MD MBA FACS, a Professional Medical Corporation(4) |
|
|
1,371,905 |
|
|
|
6.6 |
% |
| Hongyu Wang(5) |
|
|
1,184,747 |
|
|
|
5.7 |
% |
| Hatem Abou-Sayed(6) |
|
|
1,546,905 |
|
|
|
7.4 |
% |
| |
|
|
|
|
|
|
|
|
| Directors, Named Executive Officers and Other Executive Officers: |
|
|
|
|
|
|
|
|
| Jordan R. Plews, former Chief Executive Officer and Director |
|
|
3,034,787 |
(7) |
|
|
14.5 |
% |
| Graydon Bensler, Chief Executive Officer, Chief Financial Officer and Director |
|
|
1,024,787 |
(8) |
|
|
4.9 |
% |
| Braeden Lichti, Chairman of the Board |
|
|
3,794,798 |
(9) |
|
|
18.0 |
% |
| Jeffrey Parry, Director |
|
|
71,667 |
(10) |
|
|
* |
% |
| George Kovalyov, Director |
|
|
- |
|
|
|
- |
% |
| Juliane Daley, Director |
|
|
26,200 |
(11) |
|
|
* |
% |
| All executive officers and directors as a group (6 persons) |
|
|
7,952,239 |
(12) |
|
|
37.0 |
% |
| * | Denotes
less than one (1%) percent. |
| (1) | Unless
otherwise indicated, the business address of each of the individuals is our address of c/o Elevai Labs, Inc., 120 Newport Center Drive,
Ste. 250, Newport Beach, CA 92660. |
| (2) | Braeden
Lichti has sole voting and dipositive power over the shares held by BWL Investments Ltd. The address of BWL Investments Ltd. is 650 West
Georgia Street #3200, British Columbia Canada V6B 4P7. |
| (3) | Jordan
R. Plews has sole voting and dipositive power over the shares held by JP Bio Consulting LLC. The address of JP Bio Consulting LLC is
2615 Q Street, #1, Sacramento, CA 95816. |
| (4) | Consists
of (i) 1,359,342 shares of Common Stock and (ii) 12,563 shares of Common Stock underlying warrants. Hatem Abou-Sayed has sole voting
and dipositive power over the shares held by Hatem Abou-Sayed MD MBA FACS, a Professional Medical Corporation. The address of Hatem Abou-Sayed
MD MBA FACS is 4510 Executive Drive, Suite 210, San Diego, CA 92121. |
| (5) | Consists
of (i) 1,121,710 shares of Common Stock and (ii) 63,037 shares of Common Stock underlying warrants. |
| (6) | Consists
of (i) 1,359,342 shares of Common Stock held by Hatem Abou-Sayed MD MBA FACS of which Dr. Abou-Sayed has sole voting and dipositive power
over the shares, (ii) 12,563 shares of Common Stock underlying warrants and (iii) 175,000 shares of Common Stock that Dr. Abou-Sayed
has the right to acquire from us within 60 days of August 16, 2024, pursuant to the exercise of stock options granted under the 2020
Equity Incentive Plan. |
| (7) | Consists
of (i) 2,851,454 shares of Common Stock held by JP Bio Consulting LLC of which Dr. Plews has sole voting and dipositive power over the
shares and (ii) 183,333 shares of Common Stock that Dr. Plews has the right to acquire from us within 60 days of August 16, 2024, pursuant
to the exercise of stock options granted under the 2020 Equity Incentive Plan. |
| (8) | Consists
of (i) 841,454 shares of Common Stock held by GB Capital Ltd. of which Mr. Bensler has sole voting and dipositive power over the shares
and (ii) 183,333 shares of Common Stock that Mr. Bensler has the right to acquire from us within 60 days of August 16, 2024, pursuant
to the exercise of stock options granted under the 2020 Equity Incentive Plan. |
| (9) | Consists
of (i) 170,833 shares of Common Stock that Mr. Lichti has the right to acquire from us within 60 days of August 16, 2024 pursuant to
the exercise of stock options granted under the 2020 Equity Incentive Plan, (ii) 1,906,414 shares of Common Stock held by BWL Investments
Ltd. of which Mr. Lichti has sole voting and dipositive power over the shares, (iii) 828,000 shares of Common Stock held by BWL Holdings
Ltd. of which Mr. Lichti has sole voting and dipositive power over the shares, (iv) 828,000 shares of Common Stock held by Northstrive
Fund II LP of which Mr. Lichti has sole voting and dipositive power over the shares and (v) 61,551 shares of Common Stock underlying
warrants held by BWL Investments Ltd. |
| (10) | Consists
of (i) 41,667 shares of Common Stock and (ii) 30,000 shares of Common Stock that Mr. Parry has the right to acquire from us within 60
days of August 16, 2024, pursuant to the exercise of stock options granted under the 2020 Equity Incentive Plan. |
| (11) | Consists
of (i) 1,200 shares of Common Stock and (ii) 25,000 shares of Common Stock that Ms. Daley has the right to acquire from us within 60
days of August 16, 2024, pursuant to the exercise of stock options granted under the 2020 Equity Incentive Plan. |
| (12) | Consists
of (i) 8,657,531 shares of Common Stock beneficially owned by our directors and executive officers and (ii) 592,499 shares of Common
Stock underlying outstanding options, exercisable within 60 days of August 16, 2024 and (iii) 74,114 shares of common stock underlying
warrants. |
INTEREST
OF CERTAIN PERSONS IN OR OPPOSITION TO MATTERS TO BE ACTED UPON
No
person who has been our officer or director, or to our knowledge, any of their associates, has any substantial interest, direct or indirect,
by security holdings or otherwise in any matter to be acted upon. None of our directors opposed the actions to be taken by the Company.
ADDITIONAL
INFORMATION
The
Company files annual, quarterly and current reports and other information with the SEC under the Exchange Act. You may obtain copies
of this information by mail from the Public Reference Room of the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may
obtain information on the operation of the public reference rooms by calling the SEC at 1-800-SEC-0330. The SEC also maintains an internet
website that contains reports and other information about issuers that file electronically with the SEC. The address of that website
is www.sec.gov.
DELIVERY
OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS
If
hard copies of the materials are requested, we will send only one Information Statement and other corporate mailings to shareholders
who share a single address unless we received contrary instructions from any shareholder at that address. This practice, known as “householding,”
is designed to reduce our printing and postage costs. However, the Company will deliver promptly upon written or oral request a separate
copy of the Information Statement to a shareholder at a shared address to which a single copy of the Information Statement was delivered.
You may make such a written or oral request by (a) sending a written notification stating (i) your name, (ii) your shared address and
(iii) the address to which the Company should direct the additional copy of the Information Statement, to the Company at 120 Newport
Center Drive, Newport Beach, CA 92660.
If
multiple shareholders sharing an address have received one copy of this Information Statement or any other corporate mailing and would
prefer the Company to mail each shareholder a separate copy of future mailings, you may mail notification to, or call the Company at,
its principal executive offices. Additionally, if current shareholders with a shared address received multiple copies of this Information
Statement or other corporate mailings and would prefer the Company to mail one copy of future mailings to shareholders at the shared
address, notification of such request may also be made by mail or telephone to the Company’s principal executive offices.
This
Information Statement is provided to the shareholders of the Company only for information purposes in connection with the Majority Shareholders’
approval of the Approval of Certificate of Incorporation Amendment for Split and the Approval of Certificate of Incorporation Amendment
for Increase in Authorized Shares, pursuant to and in accordance with Rule 14c-2 of the Exchange Act. Please carefully read this Information
Statement.
WHERE
YOU CAN FIND MORE INFORMATION ABOUT US
The
Company is subject to the informational requirements of the Securities Exchange Act of 1934, and in accordance therewith files reports
and other information with the SEC. Such reports and other information and a copy of the registration statement and the exhibits and
schedules that were filed with the registration statement may be inspected without charge at the public reference facilities maintained
by the SEC in 100 F Street, N.E., Washington, D.C. 20549. Information regarding the operation of the public reference rooms may be obtained
by calling the SEC at 1-800-SEC-0330. The SEC maintains a web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the SEC. The address of the web site is www.sec.gov.
| |
By Order of the Board of Directors, |
| |
|
| |
/s/
Braeden Lichti |
| |
Chairman of the Board of Directors |
| |
August 26, 2024 |
Annex
A
FORM
OF CERTIFICATE OF AMENDMENT OF
THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
ELEVAI LABS INC.
(Pursuant
to Sections 242 of the General Corporation Law of the State of Delaware)
Elevai
Labs Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware does hereby
certify:
FIRST:
That the Board of Directors of Elevai Labs Inc. duly adopted resolutions setting forth a proposed amendment of the Third Amended
and Restated Certificate of Incorporation of said corporation (the “Certificate of Incorporation”), declaring said amendments
to be advisable and calling a meeting of the stockholders of said corporation for consideration thereof. The resolution setting forth
the proposed amendment is as follows:
“RESOLVED,
that the Certificate of Incorporation of this corporation be amended by adding paragraph 4 to Section 4.2 of Article Fourth as follows:
“4.
Effective as of 12:01 a.m. Eastern Time on ________ (the “Effective Time”), each [*](1) shares of the Corporation’s
Common Stock issued and outstanding immediately prior to the Effective Time shall, automatically and without any action on the part of
the Corporation or the respective holders thereof, be combined and converted into one share of Common Stock without increasing or decreasing
the par value of each share of Common Stock (the “Reverse Stock Split”). No fractional shares of Common Stock shall be issued
as a result of the Reverse Stock Split and, in lieu thereof, upon surrender after the Effective Time of a certificate or book entry position
which formerly represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time, any person
who would otherwise be entitled to a fractional share of Common Stock as a result of the Reverse Stock Split, following the Effective
Time, shall be entitled to receive one whole share. The Reverse Stock Split shall occur whether or not the certificates representing
such shares of Common Stock are surrendered to the Corporation or its transfer agent. Each certificate or book entry position that immediately
prior to the Effective Time represented shares of Common Stock shall thereafter represent the number of shares of Common Stock into which
the shares of Common Stock represented by such certificate or book entry position has been combined, subject to the right to receive
a whole share in lieu of any fractional share of Common Stock as set forth above.”
| 1 | The
Board of Directors will have the discretion to effect the Reverse Split at a ratio of any whole number between 1-for-2 and 1-for-40. |
SECOND:
That thereafter, the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize
or take such action by written consent, approved of the proposed amendment on August 12, 2024 pursuant to Section 242 of the General
Corporation Law of the State of Delaware.
THIRD:
That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of
Delaware.
[Signature
page follows]
IN
WITNESS WHEREOF, said corporation has caused this certificate to be signed on [*], 2024.
| |
By: |
|
| |
Name: |
Graydon Bensler |
| |
Title: |
Chief Executive Officer
and Chief Financial Officer |
Annex
B
FORM
OF CERTIFICATE OF AMENDMENT OF
THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
ELEVAI LABS INC.
(Pursuant
to Sections 242 of the General Corporation Law of the State of Delaware)
Elevai
Labs Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware does hereby
certify:
FIRST:
That the Board of Directors of Elevai Labs Inc. duly adopted resolutions setting forth a proposed amendment of the Third Amended
and Restated Certificate of Incorporation of said corporation (the “Certificate of Incorporation”), declaring said amendments
to be advisable and calling a meeting of the stockholders of said corporation for consideration thereof. The resolution setting forth
the proposed amendment is as follows:
“RESOLVED,
that the Certificate of Incorporation of this corporation be amended by deleting Article Fourth in its entirety and inserting the
following:
“FOURTH: Capitalization.
Section
4.1 Authorized Capital Stock.
The
aggregate number of shares of capital stock that the Corporation shall have authority to issue is 375,000,000 (Three Hundred Seventy-Five
Million), of which 300,000,000 (Three Hundred Million) shares are classified as common stock, par value $0.0001 per share (“Common
Stock”), and 75,000,000 (Seventy Five Million) shares are classified as preferred stock, par value $0.00001 per share (“Preferred
Stock”).
The
Corporation may issue shares of any class or series of its capital stock from time to time for such consideration and for such corporate
purposes as the Board of Directors of the Corporation (the “Board of Directors”) may from time to time determine. The number
of authorized shares of any class or classes of stock may be increased or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of at least a majority of the voting power of the issued and outstanding shares of
capital stock of the Corporation, voting together as a single class, without a separate vote of the holders of the Preferred Stock, or
any series thereof.
The
following is a statement of the powers, preferences and rights, and the qualifications, limitations or restrictions, of the Preferred
Stock and the Common Stock:
Section
4.2 Common Stock. A statement of the designations of each class of Common Stock and the powers, preferences and rights and
qualifications, limitations or restrictions thereof is as follows:
1. Dividends.
Dividends may be paid on the Common Stock, as the Board of Directors shall from time to time determine, out of any assets of the Corporation
available for such dividends after full cumulative dividends on all outstanding shares of capital stock of all series ranking senior
to the Common Stock in respect of dividends and liquidation rights (referred to in this Section 4 as “stock ranking
senior to the Common Stock”) have been paid, or declared and a sum sufficient for the payment thereof set apart, for all past quarterly
dividend periods, and after or concurrently with making payment of or provision for dividends on the stock ranking senior to the Common
Stock for the then current quarterly dividend period.
2. Subdivision
or Combinations. If the Corporation in any manner subdivides or combines the outstanding shares of one class of Common Stock, the
outstanding shares of the other class of Common Stock will be subdivided or combined in the same manner.
3. Distribution
of Assets. In the event of any liquidation, dissolution or winding up of the Corporation, or any reduction or decrease of its capital
stock resulting in a distribution of assets to the holders of the Common Stock, after there shall have been paid to or set aside for
the holders of the stock ranking senior to the Common Stock the full preferential amounts to which they are respectively entitled, the
holders of the Common Stock shall be entitled to receive, pro rata, all of the remaining assets of the Corporation available for distribution
to its stockholders. The Board of Directors may distribute in kind to the holders of the Common Stock such remaining assets of the Corporation,
or may sell, transfer or otherwise dispose of all or any of the remaining property and assets of the Corporation to any other corporation
or other purchaser and receive payment therefor wholly or partly in cash or property, and/or in stock of any such corporation, and/or
in obligations of such corporation or other purchaser, and may sell all or any part of the consideration received therefor and distribute
the same or the proceeds thereof to the holders of the Common Stock.
3. Voting
Rights. Subject to the voting rights expressly conferred under prescribed conditions upon the stock ranking senior to the Common
Stock, the holders of the Common Stock shall exclusively possess full voting power for the election of directors and for all other purposes.
Section
4.3 Preferred Stock The Board of Directors is authorized, subject to any limitations prescribed by law, to provide for
the issuance of shares of Preferred Stock in one or more series, and to establish from time to time the number of shares to be included
in each such series, and to fix for each such series the designation, power, preferences, and rights of the shares of each such series
and any qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted
by the Board of Directors providing for the issue and powers, preferences and rights of such series (a “Preferred Stock Designation”)
as may be permitted by applicable law. The Board of is authorized to increase or decrease the number of shares within each such series
of Preferred Stock; provided, however, that the Board of Directors may not decrease the number of shares within a series of Preferred
Stock below the number of shares within such series that is then outstanding.
The
authority of the Board of Directors with respect to a Preferred Stock Designation of each such series of Preferred Stock shall include,
but not be limited to, determination of the following:
(1)
the distinctive designation and number of shares of that series;
(2)
the rate of dividends (or the method of calculation thereof) payable with respect to shares of that series, the dates, terms and other
conditions upon which such dividends shall be payable, and the relative rights of priority of such dividends to dividends payable on
any other class or series of capital stock of the Corporation;
(3)
the nature of the dividend payable with respect to shares of that series as cumulative, noncumulative or partially cumulative, and if
cumulative or partially cumulative, from which date or dates and under what circumstances;
(4)
whether shares of that series shall be subject to redemption, and, if made subject to redemption, the times, prices, rates, adjustments
and other terms and conditions of such redemption (including the manner of selecting shares of that series for redemption if fewer than
all shares of such series are to be redeemed);
(5)
the rights of the holders of shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of
the Corporation (which rights may be different if such action is voluntary than if it is involuntary), including the relative rights
of priority in such event as to the rights of the holders of any other class or series of capital stock of the Corporation;
(6)
the terms, amounts and other conditions of any sinking or similar purchase or other fund provided for the purchase or redemption of shares
of that series;
(7)
whether shares of that series shall be convertible into or exchangeable for shares of capital stock or other securities of the Corporation
or of any other corporation or entity, and, if provision be made for conversion or exchange, the times, prices, rates, adjustments, and
other terms and conditions of such conversion or exchange;
(8)
the extent, if any, to which the holders of shares of that series shall be entitled (in addition to any voting rights required by law)
to vote as a class or otherwise with respect to the election of directors or otherwise;
(9)
the restrictions and conditions, if any, upon the issue or reissue of any additional Preferred Stock ranking on a parity with or prior
to shares of that series as to dividends or upon liquidation, dissolution or winding up;
(10)
any other repurchase obligations of the Corporation, subject to any limitations of applicable law; and
(11)
any other designations, powers, preferences, rights, qualifications, limitations or restrictions of shares of that series.
Any
of the Preferred Stock Designations may depend on facts ascertainable outside this Certificate of Incorporation, or outside the resolution
or resolutions providing for the issue of such series of Preferred Stock adopted by the Board of Directors pursuant to authority expressly
vested in it by this Certificate of Incorporation. Except as applicable law or this Certificate of Incorporation otherwise may require,
holders of Common Stock shall not be entitled to vote on any amendment to this Certificate of Incorporation (including any certificate
of designation filed with respect to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series
of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of
one or more other such series, to vote thereon by law or pursuant to this Certificate of Incorporation (including any certificate of
designation filed with respect to any series of Preferred Stock).
The
relative powers, preferences and rights of each series of Preferred Stock in relation to the Preferred Stock Designations of each other
series of Preferred Stock shall, in each case, be as fixed from time to time by the Board of Directors in the resolution or resolutions
adopted pursuant to the authority granted in this Section 4.3 of this Article FOURTH, and the consent, by class or series
vote or otherwise, of holders of Preferred Stock of such series of Preferred Stock as are from time to time outstanding shall not be
required for the issuance by the Board of Directors of any other series of Preferred Stock, whether or not the powers, preferences and
rights of such other series shall be fixed by the Board of Directors as senior to, or on a parity with, the powers, preferences and rights
of such outstanding series, or any of them; provided, however, that the Board of Directors may provide in such resolution
or resolutions adopted with respect to any series of Preferred Stock that the consent of holders of at least a majority (or such greater
proportion as shall be therein fixed) of the outstanding shares of such series voting thereon shall be required for the issuance of shares
of any or all other series of Preferred Stock.
Shares
of any series of Preferred Stock shall have no voting rights except as required by law or as provided in the relative powers, preferences
and rights of such series.
Section
4.4. Other Provisions Applicable to the Corporation’s Capital Stock.
1. Preemptive
Rights. No holder of any stock of the Corporation shall be entitled as of right to purchase or subscribe for any part of any unissued
or treasury stock of the Corporation, or of any additional stock of any class, to be issued by reason of any increase of the authorized
capital stock of the Corporation, or to be issued from any unissued or additionally authorized stock, or of bonds, certificates of indebtedness,
debentures or other securities convertible into stock of the Corporation, but any such unissued or treasury stock, or any such additional
authorized issue of new stock or securities convertible into stock, may be issued and disposed of by the Board of Directors to such persons,
firms, corporations or associations, and upon such terms as the Board of Directors may, in its discretion, determine, without offering
to the stockholders then of record, or any class of stockholders, any thereof, on the same terms or any terms.
2. Votes
Per Share. Any holder of Common Stock of the Corporation having the right to vote at any meeting of the stockholders or of any class
or series thereof shall be entitled to one vote for each share of stock held by such holder of Common Stock, provided that
no holder of Common Stock shall be entitled to cumulate votes for the election of one or more directors or for any other purpose.”
SECOND:
That thereafter, the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize
or take such action by written consent, approved of the proposed amendment on August 12, 2024 pursuant to Section 242 of the General
Corporation Law of the State of Delaware.
THIRD:
That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of
Delaware.
[Signature
page follows]
IN
WITNESS WHEREOF, said corporation has caused this certificate to be signed on [*], 2024.
| |
By: |
|
| |
Name: |
Graydon Bensler |
| |
Title: |
Chief Executive Officer
and Chief Financial Officer |
Annex
B-4
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