UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 |
☐ |
Check the appropriate box:
| ☒ | Preliminary Proxy Statement |
| ☐ | Confidential, For Use of the Commission Only (As Permitted
by Rule 14a-6(e)(2)) |
| ☐ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material under Rule 14a-12 |
LQR HOUSE INC.
(Name of Registrant as Specified in its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other
than the Registrant)
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) per
Exchange Act Rules 14a-6(i)(1) and 0-11 |
LQR HOUSE INC.
6538 Collins Ave. Suite 344
Miami Beach, Florida 33141
(786) 389-9771
www.lqrhouse.com
[*], 2025
Dear Stockholder:
We are pleased to invite you to attend the 2025
Annual Meeting of Stockholders of LQR House Inc. (the “Annual Meeting”). The Annual Meeting will be held virtually via live
webcast on Friday, May 30, 2025 at 5:00 p.m. Eastern Time.
Stockholders will NOT be able to attend
the Annual Meeting in person. The Annual Meeting will be accessible only over the internet. Please see “Questions and Answers
About the Meeting and Voting— What do I need to do now to vote at the Annual Meeting?” in the proxy statement (the “Proxy
Statement”) accompanying this letter for information on how to attend, submit questions and vote at the Annual Meeting
We are making available to you the accompanying
Notice of Annual Meeting (“Notice”), Proxy Statement and form of proxy card or voting instruction form on or about [*], 2025.
We have elected to utilize the “full set delivery” option of providing paper copies of all of our proxy materials by mail.
Our proxy materials are also electronically available at www.proxyvote.com. Additional details
regarding admission to, and the business to be conducted at, the Annual Meeting are described in the accompanying Notice and Proxy Statement.
Only stockholders of record at the close of business
on April 3, 2025 are entitled to notice of, and to vote at, the Annual Meeting.
Your vote is important. Regardless of whether
you plan to attend the Annual Meeting, we hope that you will vote as soon as possible. You may vote over the internet, by telephone or
by mailing in a proxy card. Please review the instructions on the proxy card or voting instruction form regarding each of these voting
options. Voting will ensure your representation at the Annual Meeting regardless of whether you attend the Annual Meeting.
Thank you for your on-going support of LQR House
Inc.
Sincerely,
| /s/ Sean Dollinger |
|
| Sean Dollinger |
|
| Director and Chief Executive Officer |
|
LQR HOUSE INC.
6538 COLLINS AVE. SUITE 344
MIAMI BEACH, FLORIDA 33141
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
ON
FRIDAY, MAY 30, 2025 AT 5:00 PM, EASTERN TIME
VIA A LIVE WEBCAST ONLY
ITEMS OF BUSINESS:
The 2025 Annual Meeting of Stockholders (the “Annual
Meeting”) of LQR House Inc. (“LQR,” “LQR House,” or the “Company”)
will be held virtually via live webcast on Friday, May 30, 2025 at 5:00 p.m. Eastern Time for the following purposes:
| (1) | to elect Sean
Dollinger, Yilin Lu, Lijun Chen, Jing Lu, and Hong Chun Yeung as directors of the Board of Directors
of the Company to serve until the 2026 Annual Meeting of the Stockholders of the Company; |
| (2) | to ratify the appointment of
Enrome LLP as the independent registered public accounting firm for the Company for the fiscal year ending December 31, 2025 (the “Auditor
Appointment Proposal”); |
| (3) | to approve an amendment to the Company’s Articles of
Incorporation to increase the number of shares of common stock, par value $0.0001 per share, authorized for issuance thereunder from
10,000,000 to 350,000,000 (the “Increase of Authorized Stock Proposal”). |
| (4) | to approve adjourning
the Annual Meeting, if necessary, to solicit additional proxies in the event there are not sufficient votes in favor of the proposals
listed above at the time of the Annual Meeting (the “Adjournment Proposal”). |
These items of business are more fully described
in the proxy statement (“Proxy Statement”) accompanying this Notice of Annual Meeting of Stockholders (“Notice”).
We are not aware of any other business to come before the Annual Meeting.
After careful consideration, the Board has determined
that each proposal listed above is in the best interests of the Company and its stockholders and has approved each proposal. The Board
recommends a vote “FOR” the election of each director nominee (Proposal 1), “FOR” the Auditor Appointment Proposal
(Proposal 2), “FOR” the Increase of Authorized Stock Proposal (Proposal 3), and “FOR” the Adjournment Proposal
(Proposal 4).
All stockholders are invited to attend the Annual
Meeting virtually and no stockholder will be able to attend the Annual Meeting in person. The Annual Meeting will be accessible via the
internet in accordance with the instructions contained in the Proxy Statement. Please see “Questions and Answers About the Meeting
and Voting— What do I need to do now to vote at the Annual Meeting?” in the Proxy Statement accompanying this Notice for
information on how to attend, submit questions and vote at the Annual Meeting.
WHO CAN VOTE?
You can vote at the Annual Meeting if you were
a stockholder of record as of the close of business on April 3, 2025 (the “Record Date”). Only stockholders of record
on the Record Date are entitled to receive this Notice and to vote at the Annual Meeting or at any postponement(s) or, continuations(s)
or adjournment(s) of the Annual Meeting.
ANNUAL REPORT
A copy of our 2024 Annual Report on Form 10-K
(the “2024 Annual Report”), accompanies the Proxy Statement.
REVIEW THE PROXY MATERIALS AND ANNUAL REPORT
ON OUR WEBSITE
You may also read the 2024 Annual Report, this
Notice and Proxy Statement at www.proxyvote.com.
AVAILABLE DATE
This Notice, the Proxy Statement and the form
of proxy are collectively first being made available to stockholders on or about [*], 2025 at vwww.virtualshareholdermeeting.com/YHC2025.
YOUR VOTE IS IMPORTANT. YOU MAY VOTE OVER THE
INTERNET, BY TELEPHONE OR BY MAILING BACK A PROXY CARD. PLEASE REVIEW THE INSTRUCTIONS IN THE PROXY STATEMENT OR ON THE PROXY CARD OR
VOTING INSTRUCTION FORM REGARDING EACH OF THESE VOTING OPTIONS.
We hope you are able to attend the Annual Meeting
virtually via the internet. Whether or not you attend, it is important that your stock be represented and voted at the meeting. I urge
you to please complete, date and return the proxy card in the enclosed envelope, vote your shares electronically or vote by telephone
using the information provided in the attached Proxy Statement prior to the Annual Meeting date. The vote of each stockholder is very
important. You may revoke your written proxy at any time before it is voted at the Annual Meeting by giving written notice to the Company’s
Chief Financial Officer, by submitting a properly executed paper proxy bearing a later date or by attending the Annual Meeting virtually
and voting online during the meeting. Stockholders may also revoke their proxies by entering a new vote over the internet or by telephone.
By Order of the Board of Directors
| /s/ Lijun Chen |
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| Lijun Chen |
|
| Chairman of the Board of Directors |
|
Important Notice Regarding the Availability
of Proxy Materials for the Annual Meeting of Stockholders to Be Held on May 30, 2025: Pursuant to the rules of the Securities and Exchange
Commission, with respect to the Annual Meeting, we have elected to utilize the “full set delivery” option of providing paper
copies of all of our proxy materials by mail.
The Notice of the Annual Meeting, the Annual
Report on Form 10-K, and the Proxy Statement are electronically available at www.proxyvote.com.
TABLE OF CONTENTS
Important Notice Regarding the Availability
of Proxy Materials for the Annual Meeting of Stockholders to Be Held on May 30, 2025: Pursuant to the rules of the SEC, with respect to
the Annual Meeting, we have elected to utilize the “full set delivery” option of providing paper copies of all of our proxy
materials by mail.
The Notice of the Annual
Meeting, the Annual Report on Form 10-K, and Proxy Statement are electronically available at www.proxyvote.com.
Forward-Looking Statements. The Proxy Statement
may contain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995, which statements are subject to substantial risks and uncertainties and are based on estimates and assumptions.
All statements other than statements of historical facts included in the Proxy Statement are forward-looking statements. In some cases,
you can identify forward-looking statements by terms such as “may,” “might,” “will,” “objective,”
“intend,” “should,” “could,” “can,” “would,” “expect,” “believe,”
“design,” “estimate,” “predict,” “potential,” “plan” or the negative of these
terms, and similar expressions intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties
and other factors that could cause our actual results to differ materially from the forward-looking statements expressed or implied in
the Proxy Statement. Such risks, uncertainties and other factors include those risks described in “Risk Factors” section of
in the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2025 and other subsequent documents that we file with
the SEC. The Company expressly disclaims any obligation to update or alter any statements whether as a result of new information, future
events or otherwise, except as required by law.
LQR HOUSE INC.
6538 Collins Ave. Suite 344
Miami Beach, Florida 33141
PROXY STATEMENT
For Annual Meeting of Stockholders to Be Held
on May 30, 2025
The Board of Directors (the “Board”)
of LQR House Inc., a Nevada corporation (“LQR,” “LQR House,” “Company,” “we,”
“us” or “our”), solicits the enclosed proxy for use at the 2025 Annual Meeting of Stockholders of
the Company (“Annual Meeting”) to be held on May 30, 2025, only via live webcast accessible by following the instructions
set forth here at “Questions and Answers About the Meeting And Voting—What do I need to do now to vote at the Annual
Meeting?” This proxy statement (“Proxy Statement”) and the accompanying Notice of Annual Meeting of Stockholders
(the “Notice”), our 2024 Annual Report to Stockholders (the “2024 Annual Report”), and form of proxy
are collectively first being made available to stockholders on or about [*], 2025.
The executive offices of the Company are located
at, and the mailing address of the Company is 6538 Collins Ave. Suite 344, Miami Beach, Florida 33141.
This Proxy Statement contains information about
the matters to be voted on at the Annual Meeting and the voting process, as well as information about our directors and executive officers.
We have opted to provide our materials pursuant
to the “full set delivery option” in connection with the Annual Meeting. Under the full set delivery option, a company delivers
paper copies of all proxy materials to each stockholder. The approximate date on which the proxy materials will first be mailed to our
stockholders is on or around [*], 2025. In addition to delivering proxy materials to our stockholders, we have posted all proxy materials
on a publicly accessible website. Accordingly, you should have received our proxy materials by mail. We are soliciting proxies pursuant
to this Proxy Statement for use at the Annual Meeting. Our Proxy Statement and other proxy materials are electronically available at
www.proxyvote.com.
Important Note Regarding the 2025 Reverse Stock
Split
Effective on April 21, 2025, we effected a one-for-thirty-five
reverse stock split of our issued, outstanding and authorized common stock (the “Reverse Stock Split”). The Reverse
Stock Split became effective at 12:01 a.m. Eastern Time on April 21, 2025, and our common stock began trading on a post-split basis
on April 21, 2025. In addition, the number of shares of common stock available for issuance under our equity incentive plans and issuable
upon the exercise of stock options, warrants and restricted stock units outstanding prior to the Reverse Stock Split were proportionately
adjusted. Accordingly, common stock share and per share amounts for all periods presented in this proxy statement have been retroactively
adjusted to reflect the Reverse Stock Split.
QUESTIONS AND ANSWERS ABOUT THE MEETING AND
VOTING
Q: What is a proxy?
A: A proxy is another person that you legally
designate to vote your stock. If you designate someone as your proxy in a written document, that document is also called a “proxy”
or a “proxy card.” By using the methods discussed below, you will be appointing Sean Dollinger, the Chief Executive Officer,
and Alexandra Hoffman, the Secretary and director of the Company, as your proxy. The proxy agent will vote on your behalf and will have
the authority to appoint a substitute to act as proxy. If you are unable to attend the Annual Meeting, please vote by proxy so that your
shares may be voted.
Q: What is a proxy statement?
A: A proxy statement is a document that
regulations of the SEC require that we give to you when we ask you to sign a proxy card to vote your stock at the Annual Meeting.
Q: What is the purpose of the Annual Meeting?
A: At our Annual Meeting, stockholders
will vote on: (i) the election of five (5) directors; (ii) ratification of the appointment of Enrome
LLP as the independent registered public accounting firm for the Company for the fiscal year ending December 31, 2025 (the “Auditor
Appointment Proposal”); (iii) an amendment to the Company’s Articles of Incorporation to increase the number of
shares of common stock, par value $0.0001 per share, authorized for issuance thereunder from 10,000,000 to 350,000,000 (the “Increase
of Authorized Stock Proposal”); (iv) approval of adjourning the Annual Meeting, if necessary,
to solicit additional proxies in the event there are not sufficient votes in favor of the proposals listed above at the time of the Annual
Meeting (the “Adjournment Proposal”), and (v) such other matters
as may come before the meeting. In addition, following the meeting our management will report on the Company’s performance over
the last fiscal year and respond to questions from stockholders.
Q: Why am I receiving these materials?
A: The Board has made these materials available
to you over the internet at www.proxyvote.com, and has delivered printed versions of these materials to you by mail, in connection
with the Board’s solicitation of proxies for use at the Annual Meeting. The Annual Meeting is scheduled to be held on Friday, May
30, 2025 at 5:00 p.m. Eastern Time, via live webcast. This solicitation by the Board is for proxies for use at the Annual Meeting.
Q: How do I obtain the materials for the Annual
Meeting?
A: We have opted to provide our materials
pursuant to the “full set delivery option” in connection with the Annual Meeting. Under the full set delivery option, a company
delivers paper copies of all proxy materials to each stockholder. The approximate date on which the proxy materials will first be mailed
to our stockholders is on or around [*], 2025. In addition to delivering proxy materials to stockholders, we have posted all proxy materials
on a publicly accessible website. Accordingly, you should have received our proxy materials by mail. These proxy materials are also available
electronically at www.proxyvote.com.
You may also view the following proxy materials
on the Company’s website at www.lqrhouse.com:
| ● | the Company’s 2024 Annual Report; and |
| ● | the Company’s 2025 Proxy Statement. |
You may not vote on the Company’s website.
Q: Who may attend the Annual Meeting?
A: The Annual Meeting is open to all stockholders
of record as of close of business on April 3, 2025 (the “Record Date”), or their duly appointed proxies.
Q: What will I need in order to attend the
Annual Meeting Online?
A: We will be hosting the meeting live
via the Internet. There will not be a physical location for the meeting. Our virtual meeting allows stockholders to submit questions and
comments during the meeting. After the meeting, we will spend up to 10 minutes answering stockholder questions. Our virtual format also
allows stockholders from around the world to participate and ask questions and for us to give thoughtful responses. Any stockholder can
listen to and participate in the meeting live via the internet at www.virtualshareholdermeeting.com/YHC2025. Stockholders may begin submitting
written questions through the internet portal at 5:00 p.m. (Eastern Time) on May 30, 2025, and the webcast of the annual meeting will
begin at 5:00 a.m. (Eastern Time) that day.
Stockholders may also vote while connected to
the meeting on the Internet. You will need the sixteen-digit control number included on your Notice or your proxy card (if you received
a printed copy of the proxy materials) in order to be able to vote your shares or submit questions. Instructions on how to connect and
participate via the internet, including how to demonstrate proof of stock ownership, are posted at www.virtualshareholdermeeting.com/YHC2025.
We will have technicians ready to assist you with
any technical difficulties you may have accessing the virtual meeting. If you encounter any difficulties accessing the virtual meeting
during the check-in or meeting time, please call the technical support number that will be posted on the virtual shareholder meeting log
in page.
If you do not have your control number, you will
be able to listen to the meeting only - you will not be able to vote or submit questions.
Q: May stockholders ask questions?
A: Yes. Representatives of the Company
will answer stockholders’ questions of general interest after the adjournment of the Annual Meeting. Depending upon the number of
persons asking questions, the Chairman of the meeting may limit the number of questions one person may ask in order to give a greater
number of stockholders an opportunity to ask questions. If you choose to attend the online meeting, you may submit a question during the
Annual Meeting webcast by using your sixteen-digit control number. Questions will be answered as time allows.
Q: Who may vote?
A: You may vote if you owned LQR House
common stock as of the close of business on the Record Date. Each share of LQR House common stock is entitled to one vote. As of the Record
Date, the Company had 37,107,807 shares of common stock outstanding (before effecting the Reverse Stock Split).
Q: What is the difference between a stockholder
of record and a stockholder who holds the Company’s shares in street name?
A: If your shares are registered in your name,
you are a stockholder of record. If your shares are held in the name of your broker, bank or other holder of record, your shares are held
in street name.
Q: What shares are included on the enclosed
proxy card?
A: If you are a stockholder of record only, you
will receive one proxy card from Broadridge for all shares of common stock of the Company that you hold. If you hold your shares in street
name through one or more banks, brokers and/or other holders of record, you will receive proxy materials, together with voting instructions
and information regarding the consolidation of your votes, from the third party or parties through which you hold your shares. If you
are a stockholder of record and hold additional shares in street name, you will receive proxy materials from Broadridge and the third
party or parties through which you hold your shares.
Q: What am I voting on?
A: You will be voting on the following
items of business at the Annual Meeting:
| ● | the election of five (5) directors to serve until the 2026
Annual Meeting of stockholders and until their respective successors are duly elected and qualified; |
| ● | the approval of the Auditor Appointment Proposal; |
| ● | the approval of the Increase of Authorized Stock Proposal;
and |
| ● | the approval of the Adjournment Proposal. |
Q: How does the Board recommend that I vote?
A: Our Board recommends that you vote your
shares:
| ● | “FOR” each of the nominees
named in this Proxy Statement for election to the Board; |
| ● | “FOR” the approval of the Auditor Appointment
Proposal; |
| ● | “FOR” the approval of the Increase of
Authorized Stock Proposal; and |
| ● | “FOR”
the approval of the Adjournment Proposal. |
Q: What do I need to do now to vote at the
Annual Meeting?
A: The Board is soliciting proxies for use at
the Annual Meeting. Stockholders may submit proxies to instruct the designated proxies to vote their shares in any of three ways:
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PHONE |
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| If you received printed proxy materials, mailing your signed proxy card or voter instruction card. If you choose to submit your proxy by mail, simply mark, date and sign your proxy and return it in the postage-paid envelope provided or to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, New York 11717. The signed proxy must be received prior to the Annual Meeting. |
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Submitting your proxy online at www.proxyvote.com. Internet proxy voting is available 24 hours a day, seven days a week, until 11:59 p.m., Eastern Daylight Time, on May 29, 2025. |
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Submitting your proxy by telephone by using the toll-free
telephone number provided on your Notice or your proxy card (1-800-690-6903). Telephone voting is available 24 hours a day, seven days
a week, and will close at 11:59 p.m., Eastern Daylight Time, on May 29, 2025. |
You may also participate in the Annual Meeting
online at www.virtualshareholdermeeting.com/YHC2025 and vote your shares online at that time, even if you have previously submitted
your vote. To do so, you will need the sixteen-digit control number included on your Notice, your proxy card or the instructions from
your broker that accompanied your proxy materials.
For shares of common stock held in street name,
holders may submit a proxy online or by telephone before the date of the Annual Meeting if their broker, bank and/or other holder of record
makes these methods available. If you submit a proxy online or by telephone, DO NOT request and return a printed proxy card from
us or from your broker, bank and/or other holder of record. If you hold your shares through a broker, bank and/or other holder of record,
follow the voting instructions you receive from your broker, bank and/or other holder of record.
Q: If I hold my shares in street name, will
my broker, bank or other holder of record vote my shares for me?
A: If you hold your shares of common stock in
street name, you must provide your broker, bank and/or other holder of record with instructions in order to vote these shares. If you
do not provide voting instructions, whether your shares can be voted depends on the type of item being considered for a vote.
Non-Discretionary Items. The election of
directors and approval of the increase of authorized stock are non-discretionary items and may NOT be voted on by your broker,
bank and/or other holder of record absent specific voting instructions from you. If you do not provide your bank, broker and/or other
holder of record with voting instructions, your shares of common stock will be represented by “broker non-votes” in the case
of these proposals.
Discretionary Items. The ratification of
appointment of Enrome LLP as the independent auditor of the Company for the fiscal year ending
December 31, 2025 and the approval of the adjournment of the Annual Meeting for solicitation to permit further solicitation of proxies,
if necessary or appropriate, are discretionary items. Generally, brokers, banks and/or other holders of record that do not receive voting
instructions from you may vote on these proposals in their discretion and these votes will be counted for purposes of determining a quorum.
Q: What effect do abstentions and broker non-votes
have on quorum requirements and the voting results for each proposal to be voted on at the Annual Meeting and are there dissenters’
rights?
A: Abstentions and shares represented by broker
non-votes are counted as present for purposes of determining a quorum. Abstentions are treated as shares present and entitled to vote
and, as a result, have the same effect as a vote against any proposal for which the voting standard is based on the number of shares present
at the Annual Meeting (e.g., approval of adjournment meeting) and have no impact on the vote on any proposal for which the vote standard
is based on the votes cast at the meeting (e.g., the election of directors). Shares represented by broker non-votes are not treated as
shares entitled to vote and, as a result, have no effect on the outcome of any of the proposals to be voted on by stockholders at the
Annual Meeting. Stockholders will not be entitled to dissenters’ rights with respect to any matter to be considered at the Annual
Meeting.
Q: Can I change my mind after I vote?
A: Yes. If you are a stockholder of record,
you may change your vote or revoke your proxy at any time before the polls close at the Annual Meeting by:
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submitting a later-dated proxy relating to the same shares online, by telephone or by mail before the date of the Annual Meeting; |
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delivering a written notice, bearing a date later than your proxy, stating that you revoke the proxy; or |
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participating in the Annual Meeting and voting online at that time at www.virtualshareholdermeeting.com/YHC2025 (although virtual attendance at the Annual Meeting will not, by itself, change your vote or revoke a proxy). |
To change your vote or revoke your proxy before
the date of the Annual Meeting, follow the instructions provided on your Notice, proxy card or proxy materials to do so online or by telephone,
or send a written notice or a new proxy card to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, New York 11717.
If you hold your shares of common stock through
a broker, bank and/or other holder of record, follow the instructions that you receive from your broker, bank and/or other holder of record
if you wish to change your vote or revoke your proxy.
Q: Who will count the votes?
A: A person that is affiliated with Broadridge
Financial Solutions, Inc. and its affiliates (collectively, “Broadridge”), who is an independent inspector and not
affiliated with the Company or any director, director nominee or officer of the Company, will count the votes and will serve as the inspector
of election.
Q: What if I return my proxy card but do not
provide voting instructions?
A: If you vote by proxy card, your shares
will be voted as you instruct by the individuals named as proxies on the proxy card. If you sign and return a proxy card but do not specify
how your shares are to be voted, the persons named as proxies on the proxy card will vote your shares in accordance with the recommendations
of the Board. These recommendations are:
| ● | FOR the election of the five (5) nominees for directors
named in this Proxy Statement (Proposal 1); |
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FOR the ratification of the selection by our Board of Enrome LLP as our independent auditor for the fiscal year ending December 31, 2025 (Proposal 2); |
| ● | FOR the approval of an amendment to the Company’s
Articles of Incorporation to increase the number of shares of common stock, par value $0.0001 per share, authorized for issuance thereunder
from 10,000,000 to 350,000,000 (Proposal 3); and |
| ● | FOR the approval
of the adjournment of the Annual Meeting, if necessary, to solicit additional proxies in the event there are not sufficient votes in
favor of any of the proposals listed above at the time of the Annual Meeting (Proposal 4). |
Q: What does it mean if I receive more than
one proxy card?
A: It means that you have multiple accounts
with brokers and/or our transfer agent. Please vote all of these shares. We recommend that you contact your broker and/or our transfer
agent to consolidate as many accounts as possible under the same name and address. Our transfer agent is Vstock Transfer, LLC, which may
be reached at (212) 828-8436.
Q: Will my shares be voted if I do not provide
my proxy?
A: Your shares may be voted if they are
held in the name of a brokerage firm, even if you do not provide the brokerage firm with voting instructions. Brokerage firms have the
authority under the rules of Nasdaq to vote shares for which their customers do not provide voting instructions on certain “routine”
matters. The proposal to ratify the selection of Enrome LLP as our independent auditor for
fiscal year 2025 is considered a routine matter for which brokerage firms may vote shares for which they have not received voting instructions.
The other proposals to be voted on at our Annual Meeting are not considered “routine” under applicable rules. When a proposal
is not a routine matter and the brokerage firm has not received voting instructions from the beneficial owner of the shares with respect
to that proposal, the brokerage firm cannot vote the shares on that proposal. This is called a “broker non-vote.” Abstentions
and broker non-votes will have no effect on the outcome of the vote on these proposals.
Q: How many votes must be present to hold the
Annual Meeting?
A: Your shares are counted as present at
the Annual Meeting if you attend the Annual Meeting online or if you properly return a proxy by internet, telephone or mail. In order
for us to conduct our Annual Meeting, a 33 1/3 % of the outstanding shares of stock, as of the Record Date, entitled to vote
must be present or represented by proxy at the Annual Meeting. This is referred to as a quorum. Shares of the Company’s common stock
represented by proxy will be treated as present at the Annual Meeting for purposes of determining whether there is a quorum, without regard
to whether the proxy is marked as casting a vote or abstaining. Abstentions and broker non-votes will be counted for purposes of establishing
a quorum at the Annual Meeting.
Q: How many votes are needed to elect directors?
A: You may vote “FOR” each
nominee or “WITHHOLD AUTHORITY” to vote for each nominee. Unless you mark “WITHHOLD AUTHORITY” with respect to
a particular nominee or nominees, your proxy will be voted “FOR” each of the director nominees named in this proxy statement.
In an uncontested election, a nominee will be elected as a director if the number of “FOR” votes exceeds the number of votes
withholding authority. In a contested election, a nominee will be elected director if he receives more votes than another nominee. Thus,
the five (5) directors with the most votes “FOR” will be elected to the Board. Broker non-votes and withheld votes will not
affect the outcome of the vote on directors.
Q: How many votes are needed to approve Increase
of Authorized Stock Proposal?
A: The affirmative vote of the holders
of a majority of the voting power of the issued and outstanding shares as of the Record Date and entitled to vote at the Annual Meeting
is required to approve Increase of Authorized Stock Proposal. As a result, abstentions and broker non-votes, if any, will have the effect
of a vote “AGAINST” Proposal 3. Accordingly, it is particularly important that beneficial owners instruct their brokers how
they wish to vote their shares.
Q: How many votes are needed to approve the
other proposals?
A: The affirmative vote of a majority of
the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote is required to approve the
Auditor Appointment Proposal and the Adjournment Proposal. Abstentions will be treated as votes against these proposals. Brokerage
firms do not have authority to vote customers’ unvoted shares held by the firms in street name on these proposals other than the
Auditor Appointment Proposal and the Adjournment Proposal. If a broker does not exercise this authority, such broker non-votes will have
no effect on the results of this vote. We are not required to obtain the approval of our stockholders to appoint our independent registered
public accounting firm. However, if our stockholders do not ratify the appointment of Enrome LLP
as our independent registered public accounting firm for the fiscal year ending December 31, 2025, the audit committee of our Board
(“Audit Committee”) will reconsider its appointment.
Q: Is voting confidential?
A: We will keep all the proxies, ballots
and voting tabulations private. We only let our Inspectors of Election, representatives of Broadridge, examine these documents. Management
will not know how you voted on a specific proposal unless it is necessary to meet legal requirements. We will, however, forward to management
any written comments you make on the proxy card or that you otherwise provide.
Q: When will the Company announce the voting
results?
A: The Company may announce preliminary
voting results after the adjournment of the Annual Meeting and will announce the final voting results of the Annual Meeting on a Current
Report on Form 8-K filed with the SEC within four business days after the Annual Meeting.
Q: Do any directors or officers of the Company
have a personal interest in the matter to be acted upon at the Annual Meeting?
A: Except for those directors who are nominated
for election at the Annual Meeting, no officer or director has any substantial interest, direct or indirect, by security holdings or otherwise,
in Proposal 2, Proposal 3, and Proposal 4 that is not shared by all other stockholders.
Q: What if other matters are presented for
consideration at the Annual Meeting?
A: The Company knows of no other matters
to be submitted to the stockholders at the Annual Meeting, other than those described herein. If other matters do arise, the Board has
made no recommendation as to how the proxies will vote on such other matters. If any other matters properly come before the stockholders
at the Annual Meeting, it is the intention of the persons named on the proxy card as proxies to vote the shares represented thereby on
such matters in their discretion and in accordance with their best judgment.
Q: Whom do I call if I have questions?
A: If you have any questions, need additional
material, or need assistance in voting your shares, please feel free to contact LQR House Inc. Investor Relations via e-mail info@lqrhouse.com
or via telephone at (786)-389-9771.
Q: Where can I find more information about
the Company?
A: The Company filed its 2024 Annual Report
with the SEC on March 31, 2025. That report, together with other corporate filings are available for your review on the Internet by visiting
the SEC’s website located at www.sec.gov. Copies of any reports, including exhibits, will be furnished to stockholders upon
written request. All written requests should be directed to: LQR House Inc. Secretary, LQR House Inc., 6538 Collins Ave. Suite 344, Miami
Beach, Florida 33141. We also make available free of charge on or through our website, www.lqrhouse.com, our Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to such reports filed pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as soon as reasonably practicable after filing.
We are subject to the informational requirements
of the Exchange Act, which requires that we file reports, proxy statements and other information with the SEC. The SEC maintains a website
on the Internet that contains reports, proxy and information statements and other information regarding registrants, including us, that
file electronically with the SEC. The SEC’s website address is www.sec.gov. In addition, our Exchange Act filings may be
inspected and copied at the public reference facilities of the SEC located at 100 F Street, N.E., Washington, D.C. 20549. Copies of the
material may also be obtained upon request and payment of the appropriate fee from the Public Reference Section of the SEC located at
100 F Street, N.E., Washington, D.C. 20549.
MATTERS REQUIRING STOCKHOLDER ACTION
PROPOSAL 1
ELECTION OF DIRECTORS (Item 1 on the Proxy Card)
Nominees
There are five (5) nominees recommended by the
nominating and corporate governance committee of the Board (the “Nominating and Corporate Governance Committee”) for
election this year to hold office until the 2026 Annual Meeting of the Stockholders and until their respective successors are elected
and qualified. Our Board has nominated: (i) Sean Dollinger, (ii) Yilin Lu,
(iii) Lijun Chen, (iv) Jing Lu, and (v) Hong Chun Yeung, and our management has no
reason to believe that any nominee will be unable to serve. Their biographies are provided on pages 11 to 13. The biographies of each
of the nominees contain information regarding the person’s service as a director, business experience, public-company director positions
held currently or at any time during the last five years, information regarding involvement in certain legal or administrative proceedings,
if applicable, and the experiences, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee
and the Board to determine that the person should serve as a director for the Company. In addition to the information presented below
regarding each nominee’s specific experience, qualifications, attributes and skills that led our Board to the conclusion that he
or she should serve as a director, we also believe that all of our director nominees have a reputation for integrity, honesty and adherence
to high ethical standards. They each have demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment
to service to LQR House and our Board. Finally, we value their significant experience on other public company boards of directors and
board committees.
A nominee will be elected as a director if he
or she receives a plurality of the votes cast, in person or by proxy, at the Annual Meeting. This means that the nominees for election
as director who receive the highest number of affirmative votes at the Annual Meeting will be elected as director. Withheld votes and
broker non-votes will have no effect on the outcome of the vote.
Unless otherwise instructed, the proxy holders
will vote the proxies received by them “FOR” each of the nominees named above. If any nominee becomes unavailable for
election as a result of an unexpected occurrence, shares that would have been voted for that nominee will instead be voted for the election
of a substitute nominee proposed by our Board.
The Board recommends that you vote “FOR”
the election of all of these nominees.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information
regarding our current directors and executive officers:
| Name (1) | |
Age | |
Position | |
Director Since | |
Board Committee |
| Sean Dollinger | |
45 | |
Chief Executive Officer | |
January 2023 | |
None |
| | |
| |
| |
| |
|
| Kumar Abhishek | |
48 | |
Chief Financial Officer | |
— | |
— |
| | |
| |
| |
| |
|
| Jaclyn Hoffman | |
35 | |
Chief Marketing Officer | |
— | |
— |
| | |
| |
| |
| |
|
| Alexandra Hoffman* | |
36 | |
Director, Secretary and Technical Writer | |
April 2023 | |
None |
| | |
| |
| |
| |
|
| James O’Brien* | |
39 | |
Director | |
August 2023 | |
Audit-Chairman; Compensation-Chairman; Nominating and Corporate Governance |
| | |
| |
| |
| |
|
| Lijun Chen | |
57 | |
Director, Chairman of the Board | |
December 2024 | |
Audit; Nominating and Corporate Governance |
| | |
| |
| |
| |
|
| Jing Lu | |
60 | |
Director | |
December 2024 | |
Audit; Compensation; Nominating and Corporate Governance - Chair |
| | |
| |
| |
| |
|
| Hong Chun Yeung | |
41 | |
Director | |
December 2024 | |
None |
| | |
| |
| |
| |
|
| Yilin Lu | |
43 | |
Director | |
December 2024 | |
None |
| * | Has not been nominated for election and will no longer
be a member of the Board after the Annual Meeting. |
Sean Dollinger has served as our
Chief Executive Officer and as a member of our Board since January 2023, and he founded our company in January 2021. Since December 2019
Mr. Dollinger has been involved in the founding and development of Jiva Technologies (formerly PlantX Life Inc.) (CSE: JIVA), an exchange
listed and public company in Canada. From June 2015 to February 2019, Mr. Dollinger acted as the Founder, Chief Executive Officer, and
President of Lifeist Wellness Inc. (formerly Namaste Technologies Inc., or Namaste), a registered company under the Canadian securities
laws that is a portfolio of wellness companies, where he oversaw the day-to-day operations of the company and its growth strategies. In
October 2018, Mr. Dollinger became a part of a British Columbia Securities Commission compliance review of Namaste, a Canadian class action
lawsuit, and a United States class action lawsuit, by way of his position as Chief Executive Officer and President of Namaste. For more
information, see the risk factor in our Annual Report on Form 10-K for the year ended December 31, 2024 that starts “Our Chief
Executive Officer and Director, Sean Dollinger, has been the subject of a compliance review that was initiated by the British Columbia
Securities Commission, and has not formally been concluded.” Mr. Dollinger has a wealth of experience in e-commerce, where he
has had success across numerous different digital markets. We believe that Mr. Dollinger is qualified to serve on our Board due to his
extensive operational experience, background in ecommerce, and international capital markets experience.
Kumar Abhishek has served as
our Chief Financial Officer since May 2023. Prior to joining our company as Chief Financial Officer, Mr. Abhishek was the owner
and director of Boston Crest Private Limited, a knowledge processing output company located in India, where he simultaneously oversaw
multiple companies’ financial and daily operations and was responsible for managing a team of 10+ accountants who assisted controllers
and auditors in ensuring the financial success of each company. Through his work at Boston Crest, Mr. Abhisek has served as the director
of finance and operations at PlantX Life Inc., a publicly listed company in Canada, since January 2020. Through his work at Boston
Crest, Mr. Abhishek also served as our director of finance and operations from January 2021 to May 2023. Moreover, at Aspen
Communications Pvt LTD, another knowledge processing output company in India, he served as director of finance and operations at Lifeist
Wellness Inc. (formerly Namaste Technologies Inc.) from November 2015 to October 2020. Mr. Abhishek holds a Bachelor of
Computer Applications degree from Ranchi University, Ranchi, Jharkhand, India.
Jaclyn Hoffman has served as
the Chief Marketing Officer for LQR House since January 2021, where she oversees internal design projects, as well as design projects
for partnering brands. She is also responsible for brand development, brand communication, and digital campaigns. Since October 2021,
Jaclyn has worked as the Creative Director at PlantX Life Inc, where she oversees all creative projects for PlantX and its subsidiaries.
This role includes working closely with teams of graphic designers, copywriters, web developers, and email marketing specialists to support
the overall marketing strategy with creative content. From November 2019 until September 2021, Ms. Hoffman worked as a Web Design
and Development Manager for Falcon Marketing, LLC, a marketing and search engine optimization agency, where she worked with graphic designers
and web developers to create optimized websites for a wide range of clients. From October 2018 to November 2019, Ms. Hoffman
worked as a Branding Consultant for Joyva Corp, a specialty candy company founded in 1907, where she helped modernize the brand’s
identity. From September 2016 to August 2018, Ms. Hoffman worked as a graphic designer for Lakeside Photoworks, a print, photo
and signage shop in New Orleans, LA, where she was responsible for building the brand identity of several local businesses. Ms. Hoffman
holds a Bachelor of Arts from McGill University in Montreal, QC, and an Associate in Graphic Design degree from Delgado Community College
in New Orleans, LA.
Alexandra Hoffman has served as
a member of our Board since April 2023. From January 2021 to May 2023 Ms. Hoffman provided the Company with marketing and
branding services. On May 1, 2023, Ms. Hoffman entered into an employment agreement with the Company as a Technical Writer. Since
January to October 2023, she served as the Chief Marketing Officer of Veg House Holdings Inc. where she oversaw all marketing activities
from branding to web design and messaging both print and digital. Since March 2023, Ms. Hoffman has serves as a member of the Board of
Directors and since October 2023 as the Chief Executive Officer of Veg House Holdings Inc. Since April 2019, Ms. Hoffman has served
as Chief Marketing Officer and Director at PlantX Life Inc. (CSE: VEGA), where she oversees all marketing activities, manages design &
development teams, digital marketing teams, and PlantX Life’s overall branding and messaging for all of its subsidiaries. Additionally,
between June 2018 and June 2023, Ms. Hoffman has served as a Director of Marketing and Technical Writer at Falcon Marketing LLC,
a marketing and search engine optimization agency, where she oversees all marketing activities within the agency and is responsible for
Falcon Marketing’s overall strategy as well as tailored strategies for its clients. From May 2017 to June 2018, Ms. Hoffman
served as a technical Writer and Marketing Manager at Fabuwood Cabinetry Corporation, a kitchen cabinet fabrication company, where she
managed a team of designers and developers, wrote strategic content for marketing manuals and search engine optimization. Ms. Hoffman
holds a Bachelor of Commerce degree from Concordia University in Montreal, Quebec.
James O’Brien was appointed
to serve as a member of our Board of Directors in August 2023. Mr. O’Brien is a Founder of Oakridge Law Professional Corporation
(“Oakridge”), a boutique law firm based in Toronto, Ontario that specializes in M&A and Securities. Oakridge will officially
open its doors January 6, 2025. Since October of 2024, Mr. O’Brien has operated Blackthorn Law Corporation, also specializing in
M&A and Securities. From January 2019 to December 2023, Mr. O’Brien has been a partner at MLT Aikins LLP, one of Western
Canada’s leading law firms, where he practices primarily in the areas of corporate and commercial law with a specific focus on mergers
and acquisitions and corporate finance and securities. Before that, he joined MLT Aikins LLP as an associate attorney in 2012. Mr. O’Brien
received his Bachelor of Laws degree from the University of Manitoba in 2010. He also received his Bachelor of Science degree from the
University of Manitoba in 2007. Mr. O’Brien is admitted to practice law in Manitoba, Canada and has passed Levels 1 and 2 of
the Chartered Financial Analyst programs.
Lijun Chen has
served as a Chairman of our Board of Directors since December 2024. Mr. Lijun Chen is a dedicated leader with a rich background in various
sectors. Mr. Chen graduated from the Central University of Finance and Economics with a Bachelor’s degree in Industrial Economics
in 1989. He began his career at Shijiazhuang Changlu Trading Company, where he worked diligently as the Head of the Import and Export
Trade Department and later as General Manager, contributing to the company’s operations in coal trading and daily necessities,
from October 1989 to May 2004. In 2004, Mr. Chen co-founded Fuli Real Estate Development Co. Ltd., where he served as Executive Director
until May 2014. His efforts in this role helped shape the company’s growth in the real estate market through thoughtful development
and sales strategies. Following this, he founded Hebei Jiujiukang Biotechnology Development Co. Ltd. in 2014, focusing on biotechnology
research and pharmaceutical production, where Mr. Chen served until July 2018. Since August 2018, Mr. Chen has been serving as the Chairman
of Shenzhen Yihu Tea Technology Innovation Group Co. Ltd., where he is involved in e-commerce and technology promotion. His journey reflects
a commitment to learning and adapting across different industries, and he remains grateful for the opportunities to contribute to each
organization he has been part of. We believe that Mr. Chen is qualified to serve on our Board of Directors due to his extensive experience
in various sectors.
Jing Lu has served as a member
of our Board of Directors since December 2024. From April 2023, Dr. Lu serves as Chief Financial Officer of Bowen Acquisition Corporation,
a Nasdaq-listed SPAC company. From August 2024, Dr. Lu also serves as an independent director of Autozi Internet Technology (Global) Ltd,
auto-parts e-commerce company listed on Nasdaq. From February 2021 to April 2024, she served as Chief Financial Officer of Keyarch Acquisition
Corporation, also a Nasdaq-listed SPAC company, which went successfully from independent IPO in 2022 to De-SPAC IPO in 2024. Before that,
from September 2019 to February 2021, Dr. Lu served as Chief Investment Officer of the New Hope Fertility Center in New York, sourcing
and managing PE investments, bank loans and government PPP loans. Dr. Lu also served as a Managing Director and then Chief Operating Officer
of China Bridge Capital International Inc., a PE/VC investment advisory company specialized in innovative technologies from 2017 to 2019
and from March 2021 to January 2022. Prior to that, Dr. Lu was President of ACE AV Consulting Inc. from 2005 to 2017. Dr. Lu was an Executive
Director at CIBC World Markets in 2001 working on corporate securities. Between 1998 and 2001, Dr. Lu worked at the Federal Reserve Bank
of New York as a bank regulator and supervisor. Before moving to New York, Dr. Lu was a professor of economics at York University in Canada
for four years, specializing her teaching and research in Macroeconomics, Institutional Economics, and Econometrics. Dr. Lu received a
Ph.D. and M.A. in Economics from Western University in Canada, a Graduate Certificate in Economics from the People’s University
in China, and a B.A in World Economy from Fudan University in China. We believe that Dr. Lu is qualified to serve on our Board of Directors
due to her extensive experience in the financial service industry.
Hong Chun Yeung has served as the
member of our Board of Directors since December 2024. Hong Chun Yeung has been serving as a Director of Zhonghui Anda CPA, a CPA firm,
specializing in audit and assurance, starting August 2014. Prior to that, he had worked in international firm RSM Hong Kong for over five
years. He has around 13-year experience in auditing and business consultation. He has extensive experience in providing audit and assurance
service, M&A advisory service and pre-listing advisory service to listed and pre-listing companies operating in a variety of industries
including manufacturing, mining, logistics, engineering, etc. Mr. Hong Chun Yeung holds a Bachelor of Business Administration degree in
Accounting from Hong Kong Baptist University. He is a practicing member of the Hong Kong Institute of Certified Public Accountant. We
believe that Mr. Hong Chun Yeung is qualified to serve on our Board due to his accounting experience as well as experience in providing
advisory services to listed company.
Yilin Lu has served as the member
of our Board of Directors since December 2024. Since June 2023, Mr. Lu has served as the Founder and CEO of Senchi Morgan Capital
Market and Senchi Morgan Asset Management, broker dealers and asset management firms. Mr. Lu started his investment banking career at
Goldman Sachs in 2006. He joined China International Capital Corporation (CICC) later and was named the responsible offer of CICC US Securities
(Hong Kong) Ltd in 2011. He also held positions as managing director with Cantor Fitzgerald Capital Markets in Hong Kong, Which he left
to set up his own investment bank in 2016. From July 2018 to June 2023, Mr. Lu served as a Founder and the CEO of Cheung On Securities
Limited, a broker dealer and asset management firm. He has over 15 years of experience in equity investment and trading. Mr. Lu is a Chartered
Financial Analyst (CFA) and a Financial Risk Manager (FRM). We believe that Mr. Lu is qualified to serve on our Board due to his experience
in portfolio management, investment analysis, financial analysis and reporting as well as financial advisory services.
Family Relationships
Alexandra Hoffman, a member of our board of directors
and a Technical Writer for the Company, and Jaclyn Hoffman, our Chief Marketing Officer, are sisters. There are no other family relationships
among any of our executive officers or directors.
Legal Proceedings
To the best of our knowledge, none of our directors
or executive officers have, during the past ten years, been involved in any legal proceedings described in subparagraph (f) of Item 401
of Regulation S-K.
CORPORATE GOVERNANCE
The business and affairs of the Company are managed
under the direction of the Board. The Board believes that good corporate governance is a critical factor in achieving business success
and in fulfilling the Board’s responsibilities to the Company’s stockholders. The Board believes that its practices align
management and stockholder interests.
The Governance section of the Company website
makes available the Company’s corporate governance materials, including the Articles of Incorporation, as corrected and amended
(“Articles of Incorporation”), and bylaws, the charters for each Board committee, the Company’s Code of Ethics
and Business Conduct and information about how to report concerns about the Company. To access these documents on the Company’s
website, please visit https://invest.lqrhouse.com/governance-documents/.
Board Composition/Election
Our Board presently consists of seven (7) directors
whose terms expire at this Annual Meeting. Our directors are elected annually.
The Board has fixed the number of directors at
five (5) to be effective from the date of the Annual Meeting.
As discussed in more detail later in this section,
the Board has determined that four (4) of the five (5) individuals standing for election are independent under the rules of Nasdaq.
Board Meetings
During its fiscal year ended December 31, 2024,
Board formally met a total of 6 times and our Audit Committee met 3 times in 2024. The Board also acted by written consent on numerous
occasions.
Selection of Nominees for The Board of Directors
The Nominating and Corporate Governance Committee
considers candidates for Board membership suggested by its members and other Board members, as well as management and stockholders. The
Nominating and Corporate Governance Committee’s charter provides that it may retain a third-party search firm to identify candidates
from time to time. Our Board seeks members from diverse professional backgrounds who combine a broad spectrum of experience and expertise
with a reputation for integrity. Directors should have experience in positions with a high degree of responsibility, be leaders in the
companies or institutions with which they are affiliated and are selected based upon contributions they can make to the Board and management.
The Nominating and Corporate Governance Committee’s assessment of a proposed candidate may include a review of the person’s
judgment, skill, experience with other organizations of comparable purpose, complexity and size, independence, understanding of the Company’s
business or other related industries, the interplay of his or her experience with the experience of other Board members, his or her ability
to contribute to the effective management of the Company, the extent to which he or she would be a desirable addition to the Board and
any of its committees, and such other more specific factors that the Nominating and Corporate Governance Committee determines are relevant
in light of the needs of the Board. The Nominating and Corporate Governance Committee believes that its nominees should reflect a diversity
of experience, gender, race, ethnicity and age. The Board does not have a specific policy regarding director diversity. The Nominating
and Corporate Governance Committee also considers such other relevant factors as it deems appropriate, including the current composition
of the Board, the balance of management and independent directors, and the evaluations of other prospective nominees, if any.
In connection with this evaluation, it is expected
that each member of the Nominating and Corporate Governance Committee will interview the prospective nominee before the prospective nominee
is presented to the full Board for consideration. After completing this evaluation and interview process, the Nominating and Corporate
Governance Committee will make a recommendation to the full Board as to the person(s) who should be nominated by the Board, and the Board
determines the nominee(s) after considering the recommendation and report of the Nominating and Corporate Governance Committee. We look
for director candidates who have the skills and experience necessary to help us achieve success within our industry.
We believe that each of our directors has the
necessary qualifications to be a value-added member of our Board. As noted in the director biographies, our directors have experience,
qualifications and skills across a wide range of public and private companies, possessing a broad spectrum of experience both individually
and collectively.
There are no arrangements or understanding between
any of the directors or the director nominee or officers of our Company or any other person pursuant to which any officer or director
or director nominee was or is to be selected as an officer or director or director nominee.
Nominees for Director
The Board nominated Sean Dollinger, Yilin Lu,
Lijun Chen, Jing Lu, and Hong Chun Yeung to stand for election for the five (5) Board seats. Each such individual has consented to serve
if elected.
If elected, we expect that all of the aforementioned
nominees will serve as directors and hold office until the 2026 Annual Meeting of Stockholders and until their respective successors have
been elected and qualified or until their death, retirement or resignation.
Stockholder Nominations
For nominations or other business to be properly
brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of
the Company.
To be timely, a stockholder’s notice shall
be delivered to the Secretary by registered mail at the principal executive offices of the Company not later than the close of business
on the ninetieth (90th) day nor earlier than the close of business on the one hundred twentieth (120th) day prior
to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual
meeting is advanced more than thirty (30) days prior to or delayed by more than thirty (30) days after the anniversary of the preceding
year’s annual meeting, notice by the stockholder to be timely must be so received (i) not earlier than the close of business on
the one hundred twentieth (120th) day prior to the currently proposed annual meeting and not later than the close of business
on the later of the ninetieth (90th) day prior to such annual meeting or (ii) by the tenth (10th) business day following
the day on which public announcement of the date of such meeting is first made, whichever of (i) or (ii) occurs first. In the event that
an annual meeting has not been previously held, notice by the stockholder to be timely must be so received not later than the close of
business on the tenth (10th) business day following the day on which public announcement of the date of such meeting is first made. In
no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a stockholder’s
notice as described above.
Such stockholder’s notice shall set forth:
(A) as to each person whom the stockholder proposed 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, or is otherwise
required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and Rule 14a-4(d) thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to
serving as a director if elected); (B) 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 the beneficial owner, if any, on whose behalf the proposal is made; and (C) as to the stockholder
giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made: (i) the name and address of such
stockholder, as they appear on the Company’s books, and of such beneficial owner, (ii) the class and number of shares of the Company
that are owned beneficially and of record by such stockholder and such beneficial owner and (iii) whether either such stockholder or beneficial
owner intends to deliver a proxy statement and form of proxy to holders of, in the case of the proposal, at least the percentage of the
Company’s voting shares required under applicable law to carry the proposal or, in the case of a nomination or nominations, a sufficient
number of holders of the Company’s voting shares to elect such nominee or nominees.
Nominations and the solicitation notice should
be sent to the Secretary, LQR House Inc., 6538 Collins Ave. Suite 344, Miami Beach, Florida 33141.
As of the date of this Proxy Statement, we have
not received timely notice of any nomination by a stockholder.
Ethical Guidelines
LQR House’s Code of Ethics and Business
Conduct (“Code of Ethics”) was adopted to emphasize the Company’s commitment to the highest standards of business
conduct. The Code of Ethics applies to all of our directors, officers and employees, including our principal executive officer, principal
financial officer and principal accounting officer. The Code of Ethics is available on our corporate website at https://invest.lqrhouse.com/governance-documents/.
The Code of Ethics addresses, among other things, honesty and ethical conduct, conflicts of interest, compliance with laws, regulations
and policies, including disclosure requirements under the federal securities laws, and reporting of violations of the Code of Ethics.
The Code of Ethics requires compliance with applicable law, discusses how conflicts of interest are handled, requires familiarity with
the Company’s disclosure requirements and provides for waivers under certain circumstances.
We are required to disclose any amendment to,
or waiver from, a provision of our Code of Ethics applicable to our principal executive officer, principal financial officer, principal
accounting officer, controller, or persons performing similar functions. We intend to use our website as a method of disseminating this
disclosure as well as by SEC filings, as permitted or required by applicable SEC rules. Any such disclosure will be posted to our website
within four (4) business days following the date of any such amendment to, or waiver from, a provision of our Code of Ethics.
Board Leadership
The Nominating and Corporate Governance Committee
annually reviews the Board’s leadership structure and evaluates the performance and effectiveness of the Board. The Board retains
the authority to modify its leadership structure in order to stay current with our Company’s circumstances and advance the best
interests of the Company and its stockholders as and when appropriate. The Board’s annual self-evaluation includes questions regarding
the Board’s opportunities for open communication and the effectiveness of executive sessions.
Director Independence
Our Board is composed of a majority of “independent
directors” as defined under the rules of Nasdaq. We use the definition of “independence” applied by Nasdaq to
make this determination. Nasdaq Listing Rule 5605(a)(2) provides that an “independent director” is a person other than
an officer or employee of the company or any other individual having a relationship which, in the opinion of the Board, would interfere
with the exercise of independent judgment in carrying out the responsibilities of a director. The Nasdaq listing rules provide that a
director cannot be considered independent if:
| ● | the director is, or at any time during the past three years
was, an employee of the company; |
| ● | the director or a family member of the director accepted
any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the 3 years preceding the independence
determination (subject to certain exemptions, including, among other things, compensation for board or board committee service); |
| ● | the director or a family member of the director is a partner
in, controlling shareholder of, or an executive officer of an entity to which the company made, or from which the company received, payments
in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year
or $200,000, whichever is greater (subject to certain exemptions); |
| ● | the director or a family member of the director is employed
as an executive officer of an entity where, at any time during the past three years, any of the executive officers of the company served
on the compensation committee of such other entity; and |
| ● | the director or a family member of the director is a current
partner of the Company’s outside auditor, or at any time during the past three years was a partner or employee of the Company’s
outside auditor, and who worked on the Company’s audit. |
Under such definitions, our Board has undertaken
a review of the independence of each director. Based on the information provided by each director concerning his or her background, employment
and affiliations, our Board has determined that Hong Chun Yeung, Yilin Lu, Jing Lu, Lijun Chen and
James O’Brien are independent directors of the Company.
Role of Board in Risk Oversight Process
The board of directors oversees that the assets
of our company are properly safeguarded, that the appropriate financial and other controls are maintained, and that our business is conducted
wisely and in compliance with applicable laws and regulations and proper governance. Included in these responsibilities is the board’s
oversight of the various risks facing our company. In this regard, our board seeks to understand and oversee critical business risks.
Our board does not view risk in isolation. Risks are considered in virtually every business decision and as part of our business strategy.
Our board recognizes that it is neither possible nor prudent to eliminate all risk. Indeed, purposeful and appropriate risk-taking is
essential for our company to be competitive on a global basis and to achieve its objectives.
While the board oversees risk management, company
management is charged with managing risk. Management communicates routinely with the board and individual directors on the significant
risks identified and how they are being managed. Directors are free to, and indeed often do, communicate directly with senior management.
Our board administers its risk oversight function
as a whole by making risk oversight a matter of collective consideration. Much of this work has been delegated to committees, which will
meet regularly and report back to the full board. The audit committee oversees risks related to our financial statements, the financial
reporting process, accounting and legal matters, the compensation committee evaluates the risks and rewards associated with our compensation
philosophy and programs, and the nominating and corporate governance committee evaluates risk associated with management decisions and
strategic direction.
Board Committees
The Board has established three standing committees:
(i) Audit Committee; (ii) Compensation Committee of the Board (“Compensation Committee”); and (iii) Nominating and
Corporate Governance Committee. Each of the committees operates pursuant to its charter. The committee charters will be reviewed annually
by the Nominating and Corporate Governance Committee. If appropriate, and in consultation with the chairs of the other committees, the
Nominating and Corporate Governance Committee may propose revisions to the charters. The responsibilities of each committee are described
in more detail below. After the Annual Meeting James O’Brien will no longer be a director of the Company and will not serve on any
Board Committees.
Audit Committee.
Jing Lu, James O’Brien, and Lijun Chen,
each of whom satisfies the “independence” requirements of Rule 10A-3 under the Exchange Act and Nasdaq’s rules serve
on our audit committee with James O’Brien serving as the chairman. Our board has determined that James O’Brien qualifies as
an “audit committee financial expert.” The audit committee oversees our accounting and financial reporting processes and the
audits of the financial statements of our company.
The audit committee is responsible for, among
other things: (i) retaining and overseeing our independent accountants; (ii) assisting the board in its oversight of the integrity of
our financial statements, the qualifications, independence and performance of our independent auditors and our compliance with legal and
regulatory requirements; (iii) reviewing and approving the plan and scope of the internal and external audit; (iv) pre-approving any audit
and non-audit services provided by our independent auditors; (v) approving the fees to be paid to our independent auditors; (vi) reviewing
with our chief executive officer and principal financial officer and independent auditors the adequacy and effectiveness of our internal
controls; (vii) reviewing hedging transactions; and (viii) reviewing and assessing annually the audit committee’s performance and
the adequacy of its charter.
Compensation Committee.
James O’Brien, and Jing Lu each of whom
satisfies the “independence” requirements of Rule 10C-1 under the Exchange Act and Nasdaq’s rules serve on our compensation
committee, with James O’Brien serving as the chairman. The members of the compensation committee are also “outside directors”
as defined in Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and “non-employee
directors” within the meaning of Section 16 of the Exchange Act. The compensation committee assists the board in reviewing and approving
the compensation structure, including all forms of compensation relating to our directors and executive officers.
The compensation committee is responsible for,
among other things: (i) reviewing and approving the remuneration of our executive officers; (ii) making recommendations to the board regarding
the compensation of our independent directors; (iii) making recommendations to the board regarding equity-based and incentive compensation
plans, policies and programs; and (iv) reviewing and assessing annually the compensation committee’s performance and the adequacy
of its charter.
Nominating and Corporate Governance Committee.
James O’Brien, Lijun Chen, and Jing Lu each
of whom satisfies the “independence” requirements of Nasdaq’s rules, serve on our nominating and corporate governance
committee, with Jing Lu, serving as the chairman. The nominating and corporate governance committee assists the board of directors in
selecting individuals qualified to become our directors and in determining the composition of the board and its committees.
The nominating and corporate governance committee
is responsible for, among other things: (i) identifying and evaluating individuals qualified to become members of the board by reviewing
nominees for election to the board submitted by stockholders and recommending to the board director nominees for each annual meeting of
stockholders and for election to fill any vacancies on the board; (ii) advising the board with respect to board organization, desired
qualifications of board members, the membership, function, operation, structure and composition of committees (including any committee
authority to delegate to subcommittees), and self-evaluation and policies; (iii) advising on matters relating to corporate governance
and monitoring developments in the law and practice of corporate governance; (iv) overseeing compliance with our Code of Ethics; and (v)
approving any related party transactions.
The nominating and corporate governance committee’s
methods for identifying candidates for election to our board of directors (other than those proposed by our stockholders, as discussed
below) include the solicitation of ideas for possible candidates from a number of sources — members of our board of directors, our
executives, individuals personally known to the members of our board of directors, and other research. The nominating and corporate governance
committee may also, from time-to-time, retain one or more third-party search firms to identify suitable candidates.
In making director recommendations, the nominating
and corporate governance committee may consider some or all of the following factors: (i) the candidate’s judgment, skill, experience
with other organizations of comparable purpose, complexity and size, and subject to similar legal restrictions and oversight; (ii) the
interplay of the candidate’s experience with the experience of other board members; (iii) the extent to which the candidate would
be a desirable addition to the board and any committee thereof; (iv) whether or not the person has any relationships that might impair
his or her independence; and (v) the candidate’s ability to contribute to the effective management of our company, taking into account
the needs of our company and such factors as the individual’s experience, perspective, skills and knowledge of the industry in which
we operate.
In addition, our board of directors may, from
time to time, designate one or more additional committees, which shall have the duties and powers granted to it by our board of directors.
Insider Trading Policy
In March 2024, we adopted
an insider trading policy governing the purchase, sale, and/or other dispositions of our securities by our directors, officers, and employees,
to promote compliance with insider trading laws, rules and regulations, and applicable Nasdaq listing standards applicable to us. Our
insider trading policy, among other things, prohibits our directors, officers, and employees from holding our securities in a margin account
or pledging our securities as collateral for a loan. In addition, our insider trading policy prohibits employees, officers, and directors
from engaging in put or call options, short selling, or similar hedging activities involving our stock.
AUDIT COMMITTEE REPORT
The Audit Committee: The members of the
Audit Committee (for purposes of this report, the “Committee”) are Messrs. James O’Brien, who serves as Chairman,
Jing Lu, and Lijun Chen. The Board has determined that all of the members of the Committee are independent within the meaning of applicable
SEC regulations and the listing standards of the Nasdaq and that Mr. O’Brien, the Chair of the Committee, is qualified as an audit
committee financial expert within the meaning of SEC regulations. The Board has also determined that Mr. O’Brien has accounting
and related financial management expertise within the meaning of the listing standards of the Nasdaq and that each member of the Committee
is financially literate within the meaning of the Nasdaq listing standards.
Audit Committee Charter: The Audit Committee
operates under a written charter adopted by the Board. The charter is reviewed by management at least annually, and any recommended changes
are presented to the Committee for review and approval. The charter is available on our website at: https://invest.lqrhouse.com/governance-documents/.
Audit Committee Responsibilities: The Committee
assists the Board in fulfilling its responsibilities for general oversight of the integrity of the Company’s financial statements,
the adequacy of the Company’s system of internal controls and procedures and disclosure controls and procedures, the Company’s
risk management, the Company’s compliance with legal and regulatory requirements, the independent auditors’ qualifications
and independence and the performance of the Company’s internal audit function and independent auditors. The Committee has the authority
to obtain advice and assistance from outside legal, accounting or other advisors as the Committee deems necessary to carry out its duties
and receive appropriate funding, as determined by the Committee, from the Company for such advice and assistance.
The Committee has sole authority over the selection
of the Company’s independent auditors and manages the Company’s relationship with its independent auditors (who report directly
to the Committee). Each year, the Committee evaluates the performance, qualifications and independence of the independent auditors. The
Committee is also involved in the selection of the lead audit partner. In evaluating the Company’s independent auditors, the Committee
considers the quality of the services provided, as well as the independent auditors’ and lead partner’s capabilities and technical
expertise and knowledge of the Company’s operations and industry.
The Committee had 3 official meetings during the
fiscal year ended 2024. The Committee schedules its meetings with a view to ensuring that it devotes appropriate attention to all of its
tasks. The Committee’s meetings generally include private sessions with the Company’s independent auditors, without the presence
of the Company’s management. In addition to the scheduled meetings, senior management confers with the Committee or its Chair from
time to time, as senior management deems advisable or appropriate, in connection with issues or concerns that arise throughout the year.
Management is responsible for the Company’s
financial reporting process, including its system of internal control over financial reporting, and for the preparation of consolidated
financial statements in accordance with accounting principles generally accepted in the United States. The Company’s independent
auditors are responsible for auditing those financial statements in accordance with professional standards and expressing an opinion as
to their material conformity with U.S. generally accepted accounting principles and for auditing the effectiveness of the Company’s
internal control over financial reporting. The Committee’s responsibility is to monitor and review the Company’s financial
reporting process and discuss management’s report on the Company’s internal control over financial reporting. It is not the
Committee’s duty or responsibility to conduct audits or accounting reviews or procedures. The Committee has relied, without independent
verification, on management’s representations that the financial statements have been prepared with integrity and objectivity and
in conformity with accounting principles generally accepted in the U.S. and that the Company’s internal control over financial reporting
is effective. The Committee has also relied, without independent verification, on the opinion of the independent auditors included in
their report regarding the Company’s financial statements and effectiveness of internal control over financial reporting.
Oversight Matters: As part of its oversight
of the Company’s financial statements, the Committee reviews and discusses with both management and the Company’s independent
auditors all annual and quarterly financial statements prior to their issuance. With respect to each 2024 fiscal reporting period, management
advised the Committee that each set of financial statements reviewed had been prepared in accordance with accounting principles generally
accepted in the U.S., and reviewed significant accounting and disclosure issues with the Committee. These reviews included discussions
with the independent auditors of matters required to be discussed pursuant to Public Company Accounting Oversight Board (“PCAOB”)
Auditing Standard No. 1301 (Communication with Audit Committees), including the quality (not merely the acceptability) of the Company’s
accounting principles, the reasonableness of significant judgments, the clarity of disclosures in the financial statements and disclosures
related to critical accounting practices. The Committee has also discussed with dbbmckennon matters relating to their respective
independence, including a review of audit and non-audit fees and the written disclosures and letter received from dbbmckennon required
by applicable requirements of the PCAOB regarding their respective communications with the Committee concerning independence. The Committee
also considered whether non-audit services provided by the independent auditors are compatible with the independent auditors’ independence.
The Committee also received regular updates, and written summaries as required by the PCAOB rules (for tax and other services), on the
amount of fees and scope of audit, audit-related, tax and other services provided.
In addition, the Committee reviewed key initiatives
and programs aimed at strengthening the effectiveness of the Company’s internal and disclosure control structure. As part of this
process, the Committee continued to monitor the scope and adequacy of the Company’s internal auditing program, reviewing staffing
levels and steps taken to implement recommended improvements in internal procedures and controls. The Committee also reviews and discusses
legal and compliance matters with management, and, as necessary or advisable, the Company’s independent auditors.
Audit Committee Recommendation: Based on
the Committee’s discussions with management and the independent auditors and the Committee’s review of the representations
of management and the report of the independent auditors to the Board and stockholders, and subject to the limitations on the Committee’s
role and responsibilities referred to above and in the Audit Committee Charter, the Committee recommended to the Board that it include
the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
2024 for filing with the SEC.
This report has been furnished by the members
of the Audit Committee:
James O’Brien, Chairman
Jing Lu
Lijun Chen
DIRECTOR COMPENSATION
The Compensation Committee establishes and reevaluates
if it deems necessary or prudent in its discretion, the cash and equity awards (amount and manner or method of payment) to be made to
non-employee directors for such fiscal year. In making this determination, the Compensation Committee may utilize such market standard
metrics as it deems appropriate, including, without limitation, an analysis of cash compensation paid to our peer group’s independent
directors.
The Compensation Committee has the power and discretion
to determine in the future whether non-employee directors should receive annual or other grants of options to purchase shares of common
stock or other equity incentive awards in such amounts and under such policies as the Compensation Committee may determine utilizing such
market standard metrics as it deems appropriate, including, without limitation, an analysis of equity awards granted to independent directors
of our peer group.
| | |
Cash | | |
Equity | | |
Total | |
| | |
Compensation | | |
Compensation | | |
Compensation | |
| James O’Brien | |
$ | 80,000 | | |
$ | - | | |
$ | 80,000 | |
| James Huber | |
| 60,000 | | |
| - | | |
| 60,000 | |
| Jay Dhaliwal | |
| 54,000 | | |
| - | | |
| 54,000 | |
| Gary Herman | |
| 39,000 | | |
| - | | |
| 39,000 | |
| Yilin Lu (1) | |
| - | | |
| 79,500 | | |
| 79,500 | |
| Hong Chun Yeung (1) | |
| - | | |
| 79,500 | | |
| 79,500 | |
| Lijun Chen (1) | |
| - | | |
| 79,500 | | |
| 79,500 | |
| Jing Lu (1) | |
| - | | |
| 79,500 | | |
| 79,500 | |
| | |
$ | 233,000 | | |
$ | 318,000 | | |
$ | 551,000 | |
| (1) | In December 2024 Yilin Lu, Hong Chun Yeung, Lijun Chen and Jing Lu were appointed as directors of
the Board. Each of them is entitled to receive annual cash fee of $36,000 to be paid in monthly installments. In addition, each of
these directors shall also receive equity compensation in form of 50,000 RSUs (1,429 shares of common stock on post-split basis)
vesting in eight (8) equal quarterly installments commencing in the first quarter of 2025. Equity compensation has a grant-date fair
value of $79,500. |
EXECUTIVE COMPENSATION
Summary Compensation Table
The following summary compensation table provides
information concerning all cash and non-cash compensation that have been or will be awarded to, earned by or paid during our fiscal year
ended December 31, 2024 and December 31, 2023 to our Chief Executive Officer (principal executive officer), Chief Financial Officer, and
our Chief Marketing Officer. We refer to these individuals as our “named executive officers” (“NEO”) None
of our other executives received compensation in excess of $100,000 during 2024 or 2023.
| Name and Principal Position | |
Year | | |
Salary
($) | | |
Bonus
($) | | |
Stock
Awards
($) | | |
Option
Awards
($) | | |
All Other
Compensation
($) | | |
Total
($) | |
| Sean Dollinger, | |
2024 | | |
| 586,700 | | |
| 200,000 | | |
| - | | |
| - | | |
| 850,000 | (1) | |
| 1,636,700 | |
| Chief Executive Officer | |
2023 | | |
| 337,572 | | |
| 100,000 | | |
| 5,000,100 | (3) | |
| - | | |
| - | | |
| 5,437,672 | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Kumar Abhishek, | |
2024 | | |
| 73,271 | | |
| - | | |
| - | | |
| - | | |
| 550,000 | (2) | |
| 623,271 | |
| Chief Financial Officer | |
2023 | | |
| 88,600 | | |
| 25,000 | | |
| - | | |
| - | | |
| | | |
| 113,600 | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Jaclyn Hoffman, | |
2024 | | |
| 99,600 | | |
| - | | |
| - | | |
| - | | |
| 285,000 | (4) | |
| 384,600 | |
| Chief Marketing Officer | |
2023 | | |
| 64,100 | | |
| - | | |
| - | | |
| - | | |
| | | |
| 64,100 | |
| (1) | In October 2024, the Company entered into a retention agreement
with its Chief Executive Officer, and entities affiliated with the CEO, whereby a retention bonus of $850,000 was awarded for continued
services. As of December 31, 2024, $800,000 remained unpaid and has been paid in January 2025. |
| (2) | In October 2024, the Company entered into a retention agreement
with its Chief Financial Officer whereby a retention bonus of $550,000 was awarded for continued services. As of December 31, 2024, $250,000
remained unpaid and has been paid in 2025. |
| (3) | Represents the grant-date fair value of 25,000 restricted
stock units (714 shares of common stock on post-split basis) issued to Mr. Dollinger in 2023. |
| (4) | In October 2024, the Company entered into a retention agreement
with its Chief Marketing Officer whereby a retention bonus of $285,000 was awarded for continued services. As of December 31, 2024, $255,000
remained unpaid. Of this amount, $100,000 was paid in January 2025, and $155,000 remained unpaid. |
Employment Agreements
We have executed the following employment agreements
and consulting agreements with our NEOs. The material terms of each of those arrangements are summarized below. The summaries are not
complete descriptions of all provisions of the employment arrangements and are qualified in their entirety by reference to the written
employment arrangements, each filed as an exhibit to our 2024 Annual Report.
Under our employment agreement dated March 29,
2023, as amended on November 1, 2023, with our Chief Executive Officer, Sean Dollinger, effective as of the date of the consummation of
the Company’s IPO, we agreed that, for a 1-year term renewed automatically, unless terminated earlier in accordance with its terms,
we will pay Mr. Dollinger an annual base salary (the “Base Salary”) of $540,000. Mr. Dollinger will also be entitled
to the following types of bonuses:
| (i) | an annual incentive bonus as determined by the Board of Directors
within thirty (30) days of the filing of the Company’s annual reports with the SEC; and |
| (ii) | a monthly performance bonuses (the “Bonuses”),
payable on or before the fifteenth (15th) day of the calendar month immediately following the calendar month with respect to which the
amount of the performance bonus is determined, commencing with the calendar month ending on November 30, 2023, in an amount equal to
One Hundred Thousand Dollars ($100,000.00) for each One Million Dollars ($1,000,000.00) oft gross revenue generated through sales made
on or through the website associated with the domain name www.cwspirits.com (or any successor website) (“Website Revenue”)
for such calendar month; provided, that, within fifteen (15) days of the filing of each of the Company’s quarterly reports with
the SEC, the amount of such bonuses for the months during the applicable fiscal quarter shall be adjusted, upwards or downwards, as the
case may be, based on the Website Revenue for the applicable quarter as reported by the Company in its quarterly filing with the SEC
for such quarter. Any such downwards adjustment shall require Mr. Dollinger to pay the amount of such downwards adjustment to the Company
within ten (10) days of the determination of such adjustment. Any such upwards adjustment shall require the Company to pay the amount
of such upwards adjustment to Mr. Dollinger within ten (10) days of the determination of such adjustment. Notwithstanding the foregoing,
in no event shall the total amount of the Bonuses paid to the Executive in any one fiscal year exceed Five Million Dollars ($5,000,000.00). |
Mr. Dollinger is entitled to 3 weeks of paid vacation
for the first year of his employment and 4 weeks of paid vacation for the second and third years of his employment. The Company also provides
standard indemnification and directors’ and officers’ insurance in addition to the ability to participate in standard employee
benefits, such as health, medical, dental and visions insurance. Mr. Dollinger can be terminated without cause and upon death or disability.
Mr. Dollinger is also subject to certain confidentiality and non-competition provisions.
If Mr. Dollinger’s employment agreement
is terminated by the Company without cause, all compensation payable to Mr. Dollinger shall cease as of the date of termination specified
in the Company’s notice and the Company shall pay Mr. Dollinger, the following sums: (i) the Base Salary on the date of termination
specified in the Company’s notice (the “Termination Date”) for the shorter of (x) six months and (y) the remainder
of the term of the employment agreement (the “Term”) (the applicable period being referred to as the “Severance
Period”), payable in monthly installments; (ii) benefits under group health and life insurance plans in which Mr. Dollinger
participated prior to termination through the Severance Period; (iii) all previously earned, accrued, and unpaid benefits from the Company
and its employee benefit plans, including any such benefits under the Company’s pension, disability, and life insurance plans, policies,
and programs; and (iv) so long as the Company has achieved its budgeted EBITDA level for the period commencing with the end of the Company’s
immediately previous fiscal year through the Termination Date, an amount equal to the product of the bonus paid to Mr. Dollinger in respect
of the immediately preceding fiscal year times the quotient obtained by dividing (x) the number of full calendar months occurring since
the end of the immediately previous fiscal year through the Termination Date, by (y) 12.
If, prior to the date on which the Company’s
obligations to pay Mr. Dollinger the Base Salary on the Termination Date cease, Mr. Dollinger certain covenants as listed in his employment
agreement, then the Company shall have no obligation to make any of the payments that remain payable by the Company in the form of Base
Salary or benefits on or after the date of such violation. The payment of severance may be conditioned by the Company on the delivery
by Mr. Dollinger of a release of any and all claims that Mr. Dollinger may have against the Company.
If the Employment Agreement is terminated by the
Company for cause, death or disability, Mr. Dollinger (or his estate or representative as applicable) shall not receive the Base Salary
but will receive all other sums.
Under our employment agreement dated May 1, 2023
with our Chief Financial Officer, Kumar Abhishek, effective as of May 1, 2023, we agreed that, for a 1-year term renewed automatically,
unless terminated earlier in accordance with its terms, we will pay Mr. Abhishek an annual base salary (the “Base Salary”)
of $72,000, which will increase by no less than 5% on each anniversary of his employment. Mr. Abhishek will be eligible to receive an
annual incentive bonus as determined by the Board of Directors within thirty (30) days of filing of the Company’s annual reports.
Mr. Abhishek is entitled to 3 weeks of paid vacation for the first year of his employment and 4 weeks of paid vacation for the second
and third years of his employment. The Company also provides standard indemnification and directors’ and officers’ insurance
in addition to the ability to participate in standard employee benefits, such as health, medical, dental and visions insurance. Mr. Abhishek
can be terminated without cause and upon death or disability. Mr. Abhishek will also be entitled to certain severance payments if his
employment is terminated with or without cause and on death or disability. Mr. Abhishek is also subject to certain confidentiality and
non-competition provisions. Mr. Abhishek’s employment agreement with the Company is conditioned upon him working at least 35 hours
per week as our Chief Financial Officer.
If Mr. Abhishek’s employment agreement is
terminated by the Company without cause, all compensation payable to Mr. Abhishek shall cease as of the date of termination specified
in the Company’s notice and the Company shall pay Mr. Abhishek, the following sums: (i) the Base Salary on the date of termination
specified in the Company’s notice (the “Termination Date”) for the shorter of (x) six months and (y) the remainder
of the term of the employment agreement (the “Term”) (the applicable period being referred to as the “Severance
Period”), payable in monthly installments; (ii) benefits under group health and life insurance plans in which Mr. Abhishek participated
prior to termination through the Severance Period; (iii) all previously earned, accrued, and unpaid benefits from the Company and its
employee benefit plans, including any such benefits under the Company’s pension, disability, and life insurance plans, policies,
and programs; and (iv) so long as the Company has achieved its budgeted EBITDA level for the period commencing with the end of the Company’s
immediately previous fiscal year through the Termination Date, an amount equal to the product of the bonus paid to Mr. Abhishek in respect
of the immediately preceding fiscal year times the quotient obtained by dividing (x) the number of full calendar months occurring since
the end of the immediately previous fiscal year through the Termination Date, by (y) 12.
If, prior to the date on which the Company’s
obligations to pay Mr. Abhishek the Base Salary on the Termination Date cease, Mr. Abhishek certain covenants as listed in his Employment
Agreement, then the Company shall have no obligation to make any of the payments that remain payable by the Company in the form of Base
Salary or benefits on or after the date of such violation. The payment of severance may be conditioned by the Company on the delivery
by Mr. Abhishek of a release of any and all claims that Mr. Abhishek may have against the Company.
If the employment agreement is terminated by the
Company for cause, death or disability, Mr. Abhishek (or his estate or representative as applicable) shall not receive the Base Salary
but will receive all other sums.
Outstanding Equity Awards at Fiscal Year-End
As of December 31, 2024, no NEO holds any options,
however, Sean Dollinger, our CEO, has 25,000 outstanding restricted stock units (“RSU”), none of which have vested,
and have a grant-date fair value of $5,000,100. No other NEO holds any RSUs.
Policies and Practices for Granting Certain
Equity Awards
Our policies and practices regarding the granting
of equity awards are carefully designed to ensure compliance with applicable securities laws and to maintain the integrity of our executive
compensation program. The Compensation Committee is responsible for the timing and terms of equity awards to executives and other eligible
employees.
The timing of equity award grants is determined
with consideration to a variety of factors, including but not limited to, the achievement of pre-established performance targets, market
conditions and internal milestones. The Company does not follow a predetermined schedule for the granting of equity awards; instead, each
grant is considered on a case-by-case basis to align with the Company’s strategic objectives and to ensure the competitiveness of
our compensation packages.
In determining the timing and terms of an equity
award, the Board or the Compensation Committee may consider material nonpublic information to ensure that such grants are made in compliance
with applicable laws and regulations. The Board’s or the Compensation Committee’s procedures to prevent the improper use of
material nonpublic information in connection with the granting of equity awards include oversight by legal counsel and, where appropriate,
delaying the grant of equity awards until the public disclosure of such material nonpublic information.
The Company is committed to maintaining transparency
in its executive compensation practices and to making equity awards in a manner that is not influenced by the timing of the disclosure
of material nonpublic information for the purpose of affecting the value of executive compensation. The Company regularly reviews its
policies and practices related to equity awards to ensure they meet the evolving standards of corporate governance and continue to serve
the best interests of the Company and its shareholders.
SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information,
as of April 21, 2025, with respect to the holdings of (1) each person who is the beneficial owner of more than 5% of a class of Company
voting stock, (2) each of our directors, (3) each executive officer, and (4) all of our current directors and executive officers as a
group.
Beneficial ownership
of a class of voting stock is determined in accordance with the rules of the SEC and includes any shares of such class of the
Company’s voting stock over which a person exercises sole or shared voting or investment power, or of which a person has a
right to acquire ownership at any time within 60 days. Except as otherwise indicated, we believe that the persons named in this
table have sole voting and investment power with respect to all shares of voting stock held by them. Applicable percentage ownership
in the following table is based on 1,066,798 of common stock outstanding on April 21, 2025, plus, for each individual, any common
stock that individual has the right to acquire within 60 days of April 21, 2025 (on the post-split basis).
To the best of our knowledge, except as otherwise
indicated, each of the persons named in the table has sole voting and investment power with respect to the shares of our common stock
beneficially owned by such person, except to the extent such power may be shared with a spouse. To our knowledge, none of the shares listed
below are held under a voting trust or similar agreement, except as noted. To our knowledge, there is no arrangement, including any pledge
by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the Company.
| Name and Address of Beneficial Owner(1) | |
Title | |
Number(2) | | |
Percent | |
| Officers and Directors | |
| |
| | | |
| | |
| Sean Dollinger(3) | |
Chief Executive Officer and Director | |
| 4,949 | | |
| * | % |
| Kumar Abhishek | |
Chief Financial Officer | |
| 12 | | |
| * | % |
| Jaclyn Hoffman | |
Chief Marketing Officer | |
| 42 | | |
| * | % |
| Alexandra Hoffman | |
Director and Technical Writer | |
| 24 | | |
| * | % |
| James O’Brien(4) | |
Director | |
| 27 | | |
| * | % |
| Yilin Lu(5) | |
Director | |
| 179 | | |
| | % |
| Hong Chun Yeung(6) | |
Director | |
| 179 | | |
| | % |
| Lijun Chen(7) | |
Director | |
| 179 | | |
| | % |
| Jing Lu(8) | |
Director | |
| 179 | | |
| | % |
| David Lazar | |
Director | |
| - | | |
| | |
| All Officers and Directors as a Group (total of 8 persons) | |
| 5,234 | | |
| * | % |
| | |
| |
| | | |
| | |
| 5% Beneficial Owners of a Class of Voting Stock | |
| | | |
| | |
| (1) | Unless otherwise indicated, the address of each beneficial
owner listed in the table below is c/o our Company, LQR House Inc., 6538 Collins Ave. Suite 344, Miami Beach, FL 33141. |
| (2) | Based on 1,066,798 shares of common stock outstanding as of April
21, 2025 (on the post-split basis). |
| (3) | Includes 536 shares of common stock issued upon vesting of RSUs granted to Mr. Dollinger
under the 2021 Plan. |
| (4) | Consists of 27 shares of common stock issued upon vesting
of RSUs granted to Mr. O’Brien under the 2021 Plan. |
| (5) | Consists of 179 shares of common stock issued upon vesting of RSUs granted to Mr. Yilin
Lu on December 19, 2024 pursuant to director agreement. Mr. Yilin Lu is entitled to receive equity
compensation in form of 1,429 RSUs vesting in eight (8) equal quarterly installments commencing in second quarter of 2025. |
| (6) | Consists of 179 shares of common stock issued upon vesting of RSUs granted to Mr.
Yeung on December 19, 2024 pursuant to director agreement. Mr. Yeung is entitled to receive equity compensation
in form of 1,429 RSUs vesting in eight (8) equal quarterly installments commencing in second quarter of 2025. |
| (7) | Consists of 179 shares of common stock issued upon vesting of RSUs granted to Mr.
Chen on December 19, 2024 pursuant to director agreement. Mr. Chen is entitled to receive equity compensation
in form of 1,429 RSUs vesting in eight (8) equal quarterly installments commencing in second quarter of 2025. |
| (8) | Consists of 179 shares of common stock issued upon vesting of RSUs granted to Dr.
Jing Lu on December 19, 2024 pursuant to director agreement. Dr. Jing Lu is entitled to receive equity
compensation in form of 1,429 RSUs vesting in eight equal quarterly installments commencing in second quarter of 2025. |
SECTION 16(A) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of
1934, as amended, requires our directors, executive officers and persons who own more than 10% of our outstanding shares of common stock
(“Ten Percent Holders”) to file with the SEC reports of their share ownership and changes in their share ownership
of our common stock. Directors, executive officers and Ten Percent Holders are also required to furnish us with copies of all ownership
reports they file with the SEC. To our knowledge, based solely on a review of the copies of such reports furnished to us, the following
directors, executive officers and Ten Percent Holders did not comply with all Section 16(a) filing requirements as of Record Date as follows:
| (i) | Ms. Alexandra Hoffman filed her form 4 regarding four (4)
transactions as of November 26, 2024, late in 2024. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Except as disclosed herein and regular salary
and bonus payments made to our directors and officers in the ordinary course of business as described in the section “Executive
Compensation,”, no director, executive officer or stockholder holding at least 5% of shares of our common stock, or any family
member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction in which the amount involved
in the transaction exceeds the lesser of $120,000 or one percent of the average of our total assets at the year-end for the last two completed
fiscal years.
Related Party Transactions
Set forth below is a description of certain relationships
and related person transactions since January 1, 2022, between us or our subsidiaries, and our directors, executive officers and holders
of more than 5% of our voting securities that involve the lower of $120,000 or 1% of the average of total assets in the last two fiscal
years. We believe that all of the following transactions were entered into with terms as favorable as could have been obtained from unaffiliated
third parties.
| ● | We, CWS, and Ssquared are parties to an Exclusive Marketing
Agreement dated April 1, 2021. Pursuant to that agreement, CWS and Ssquared granted us exclusive marketing rights regarding any
of CWS and Ssquared’s products. Pursuant to that agreement, Sean Dollinger, our Chief Executive Officer and Director, and 50% owner
of Ssquared, received 8,334 shares of our common stock (238 shares of common stock on a post-split basis), and KBROS, LLC, the owner
of CWS and 50% owner of Ssquared, received 33,333 shares of our common stock (952 shares of common stock on a post-split basis). |
| ● | Mr. Gregory Hoffman, a brother of Ms. Alexandra Hoffman,
our director, entered into an advisor agreement with the Company on June 1, 2023, pursuant to which the Company issued to Mr. Hoffman
12,500 shares of common stock (357 shares of common stock on a post-split basis). |
| ● | We and 1226053 B.C. Ltd, our shareholder, are parties to
a debt settlement agreement, dated September 27, 2023, pursuant to which the Company issued to 1226053 B.C. Ltd 19,130 shares of common
stock. 1226053 B.C. Ltd is a legal entity owned and controlled by Mr. Avtar Dhaliwal, a brother of Mr. Jay Dhaliwal, a former Director
on our Board. |
| ● | In August 2023, the Company entered into an independent contractor
agreement with Catalyst LLC, for investor relations and advisory services with an entity for up to $1,000,000, for which the Company
paid $500,000 through December 31, 2023. The contractor co-owns a company with the Company’s Chief Executive Officer, which is
not controlled by LQR. Therefore, the contractor and his related entities are considered affiliates. |
| ● | On November 1, 2023, LQR House Acquisition Corp. (the “Buyer”),
a wholly owned subsidiary of the Company, and Ssquared entered into a Domain Name Transfer Agreement pursuant to which, Ssquared sold
to the Buyer all right, title, and interest in and to the domain name www.cwspirits.com and trademark rights associated with the domain
name in any jurisdiction, all Internet traffic through the domain name and all website content, together with any goodwill associated
therewith in exchange for the payment by the Buyer of the purchase price of $10,000. The Company’s Chief Executive Officer and
Director, Sean Dollinger, owns 50% of the equity of Ssquared, and the other 50% is owned by a minority shareholder of the Company,
who is considered a related party. |
| ● | On November 1, 2023, the Company entered into the Product
Handling Agreement with KBROS. KBROS acts as the Company’s Product Handler, whereby they are entitled to compensation of $40,000
per month plus reimbursement for shipping and handling fees incurred by them for orders fulfilled through the CWS Platform, and bonus
for reaching certain revenue milestones. The spouse of the Company’s former Chief Executive Officer and Director, is the President
and controlling stockholder of KBROS, the managing member and director of Ssquared, and a minority shareholder with the Company. |
| ● | On November 1, 2023, the Company entered into the Funding
Commitment Agreement with KBROS. Pursuant to this agreement, the Company committed to provide annual funding to the Product Handler from
time to time in the minimum amount of $2,500,000 to enable the Product Handler to purchase inventory from Company-approved vendors. The
spouse of the Company’s former Chief Executive Officer and Director, is the President and controlling stockholder of KBROS, the
managing member and director of Ssquared, and a minority shareholder with the Company. |
| ● | On October 15, 2024, we entered into a Securities Purchase
Agreement with David E. Lazar, our President and Director, pursuant to which he acquired 31,481 shares of common stock (which represented
approximately 19.99% of our outstanding stock on October 15, 2024) at a price of $19.25 per share for proceeds of $606,000. |
| ● | In October 2024, the Company entered into a settlement and
release agreement with KBROS, and its controlling stockholder, for an aggregate amount equal to $4,100,000. The spouse of the Company’s
former Chief Executive Officer and Director, is the President and controlling stockholder of KBROS, the managing member and director
of Ssquared, and a minority shareholder with the Company. |
| ● | In October 2024, the Company entered into a retention agreement
with its Chief Financial Officer whereby a retention bonus of $550,000 was awarded for continued services. |
| ● | In October 2024, the Company entered into a retention agreement
with its Chief Executive Officer, and entities affiliated with the CEO, whereby a retention bonus of $850,000 was awarded for continued
services. |
| ● | In October 2024, the Company entered into a retention agreement
with its Chief Marketing Officer, Jaclyn Hoffman, whereby a retention bonus of $285,000 was awarded for continued services. |
| ● | In October 2024, the Company entered into a retention agreement
with its Director, Alexandra Hoffman, whereby a retention bonus of $600,000 was awarded for continued services. |
| ● | In October 2024, the Company entered into a settlement agreement
with South Doll LP, its former landlord, pursuant to which the Company agreed to pay this entity $40,000. Sean Dollinger our Chief Executive
Officer and Director, owns an entity that acts as a general partner of South Doll LP. |
| ● | In October 2024, the Company entered into settlement agreement
and general and mutual release with its independent director, James O’Brien, pursuant to which the Company settled outstanding
liabilities amongst the parties in the amount of $30,000. |
| ● | In October 2024, the Company entered into settlement agreement
and general and mutual release with each of the following former independent directors of the Company: James Huber and Jay Dhaliwal,
pursuant to which the Company settled outstanding liabilities with each of the directors for a amount of $30,000. |
Related Person Transaction
Policy
Under our policy, if a transaction has been identified
as a related person transaction, including any transaction that was not a related person transaction when originally consummated or any
transaction that was not initially identified as a related person transaction prior to consummation, our management must present information
regarding the related person transaction to our Audit Committee, or, if Audit Committee approval would be inappropriate, to another independent
body of our Board, for review, consideration and approval or ratification. The presentation must include a description of, among other
things, the material facts, the interests, direct and indirect, of the related persons, the benefits to us of the transaction and whether
the transaction is on terms that are comparable to the terms available to or from, as the case may be, an unrelated third party or to
or from employees generally. Under the policy, we will collect information that we deem reasonably necessary from each director, executive
officer and, to the extent feasible, significant stockholder to enable us to identify any existing or potential related person transactions
and to effectuate the terms of the policy. In addition, under our Code of Ethics, our employees and directors will have an affirmative
responsibility to disclose any transaction or relationship that reasonably could be expected to give rise to a conflict of interest. In
considering related person transactions, our Audit Committee, or other independent body of our Board, will take into account the relevant
available facts and circumstances including, but not limited to:
| ● | the risks, costs and benefits to us; |
| ● | the impact on a director’s independence in the event
that the related person is a director, immediate family member of a director or an entity with which a director is affiliated; |
| ● | the availability of other sources for comparable services
or products; and |
| ● | the terms available to or from, as the case may be, unrelated
third parties or to or from employees generally |
The policy requires that, in determining whether
to approve, ratify or reject a related person transaction, our Audit Committee, or other independent body of our Board, must consider,
in light of known circumstances, whether the transaction is in, or is not inconsistent with, our best interests and those of our stockholders,
as our Audit Committee, or other independent body of our Board, determines in the good faith exercise of its discretion.
PROPOSAL 2
APPROVAL OF THE AUDITOR APPOINTMENT PROPOSAL
(Item 2 on the Proxy Card)
Proposal: The Board of Directors is asking
that you vote to ratify the Board’s selection of Enrome LLP as our independent registered public accounting firm for fiscal year
2025.
The Audit Committee is responsible for selecting
the Company’s independent auditors. dbbmckennon served as our independent registered public accounting firm to audit our
books and accounts for the fiscal years ended December 31, 2023 and 2024. dbbmckennon also served as our independent registered
public accountant prior to April 23, 2025.
On April 23, 2025, the Audit Committee accepted
resignation of dbbmckennon and appointed Enrome LLP as the independent auditor of the Company for the 2025 fiscal year. Although
stockholder approval for this appointment is not required, the Audit Committee and the Board are submitting the selection of Enrome LLP
or ratification to obtain the views of stockholders as a matter of good corporate governance. Even if the selection is ratified, the Board
and the Audit Committee may, in their discretion, direct the appointment of a different independent registered public accounting firm
at any time during the year if they determine that such a change would be in the best interests of our Company and our stockholders.
The Company expects representatives of Enrome
LLP to be present at the Annual Meeting and available to respond to questions which may be raised there. These representatives may comment
on the financial statements if they so desire.
Principal Accountant Fees and Services
dbbmckennon served as our independent registered
public accounting firm to audit our books and accounts for the fiscal years ended December 31, 2024 and 2023. The table below presents
the aggregate fees billed for professional services rendered by dbbmckennon for fiscal years 2024 and 2023.
| | |
2024 | | |
2023 | |
| Audit fees | |
$ | 167,247 | | |
$ | 233,473 | |
| Audit-related fees | |
| | | |
| | |
| Tax fee | |
| | | |
| | |
| All other fees | |
| | | |
| | |
| Total fees | |
$ | 167,247 | | |
$ | 233,473 | |
In the above tables, “audit fees”
are fees billed for services provided related to the audit of our annual financial statements, quarterly reviews of our interim financial
statements, and services normally provided by the independent accountant in connection with regulatory filings or engagements for those
fiscal periods. “Audit-related fees” are fees not included in audit fees that are billed by the independent accountant for
assurance and related services that are reasonably related to the performance of the audit or review of our financial statements. “All
other fees” are fees billed by the independent accountant for products and services not included in the foregoing categories. All
audit fees are pre-approved by the Audit Committee.
Audit Committee Pre-Approval Policies
The charter of our Audit Committee provides that
the duties and responsibilities of our Audit Committee include the pre-approval of all audit and non-audit services permitted by law or
applicable SEC regulations (including fee and terms of engagement) to be performed by our external auditor.
All of the services provided above under the caption
“Audit-Related Fees” were approved by our Board or by our Audit Committee pursuant to our Audit Committee’s pre-approval
policies.
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
On April 23, 2025, we were informed by dbbmckennon,
our independent registered public accountant prior to April 23, 2025, that dbbmckennon would resign effective immediately. On April
23, 2025, the Audit Committee appointed Enrome LLP as the Company’s independent registered public accounting firm for the fiscal
year ending December 31, 2025, effective April 23, 2025 (the “Engagement Date”).
dbbmckennon’s audit reports on the
Company’s consolidated financial statements as of and for the fiscal years ended December 31, 2024 and 2023 did not contain an adverse
opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles, except
for an explanatory paragraph in such reports regarding substantial doubt about the Company’s ability to continue as a going concern
and an emphasis of matter paragraph.
During the fiscal years
ended December 31, 2024 and 2023, and in the subsequent interim period through the Engagement Date, the Company has not had any disagreements
(within the meaning of Item 304(a) of Regulation S-K) with dbbmckennon on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedures which, if not resolved to the satisfaction of dbbmckennon, would have caused
them to make reference thereto in their reports on the Company’s financial statements for such years.
During the fiscal years
ended December 31, 2024 and 2023, and in the subsequent interim period through the Engagement Date, there were no reportable events as
such term is defined in Item 304(a)(1)(v) of Regulation S-K, except for the material weaknesses in the Company’s internal controls
over financial reporting due to lack of segregation of duties, described in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2024.
The Audit Committee of
the Company approved the engagement of Enrome LLP. During the two most recent fiscal years and in the subsequent interim period through
the Engagement Date, neither the Company nor anyone on its behalf consulted with Enrome LLP regarding either:
| 1. | The
application of accounting principles to any specified transaction, either completed or proposed, or the type of audit opinion that might
be rendered on the Company’s financial statements, and neither a written report was provided to the Company nor oral advice was
provided that Enrome LLP concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing
or financial reporting issue; or |
| 2. | Any
matter that was either the subject of a disagreement (as defined in Regulation S-K, Item 304(a)(1) (iv) and the related instructions)
or reportable event (as defined in Regulation S-K, Item 304(a)(1)(v)). |
In accordance with Item 304(a)(3) of Regulation
S-K, the Company provided dbbmckennon with a copy of the disclosures made in the Current Report on Form 8-K filed on April 24,
2025 (“Form 8-K”) and requested from dbbmckennon a letter addressed to the SEC indicating whether it agrees with such
disclosures. A copy of dbbmckennon’s letter dated as of April 24, 2025 is attached as Exhibit 16.1 to the Form 8-K.
Vote Required
The affirmative vote of a majority of the votes
cast is required for approval of the Auditor Appointment Proposal. For the purpose of the vote on this proposal, abstentions, broker non-votes
and other shares not voted will not be counted as votes cast and will have no effect on the result of the vote, although they will be
considered present for the purpose of determining the presence of a quorum.
Recommendation
The Board of Directors recommends that you vote
“FOR” approval of this proposal.
PROPOSAL 3
APPROVAL OF THE INCREASE OF AUTHORIZED STOCK
PROPOSAL
(Item 3 on the Proxy Card)
Our Board believes that it is in the best interests
of the Company and our stockholders to amend our Articles of Incorporation to increase the number of authorized shares of common stock.
Upon consultation with our management, our Board unanimously approved, and unanimously recommends for stockholder approval, the proposal
to adopt a Certificate of Amendment to our Articles of Incorporation (the “Certificate of Amendment”), to increase
the number of authorized shares of common stock from 10,000,000 shares to 350,000,000 shares, each share of common stock having a par
value of $0.0001. The form of the text of the amendment (which would be filed with the Nevada Secretary of State on its then prescribed
form of Certificate of Amendment) is set forth as Annex A to this proxy statement (subject to any changes required by applicable
law).
As of the Record Date, there were: (i) [*] shares
of common stock outstanding; (ii) [*] shares of common stock issuable upon the exercise of stock options and restricted stock units outstanding;
(iii) [*] shares of common stock issuable upon the exercise of warrants outstanding; (iv) [*] shares available for future issuance as
awards under our 2021 Equity Incentive Plan, as amended (the “2021 Plan”). The additional shares of common stock to
be authorized by adoption of the amendment would have rights identical to the currently outstanding shares of common stock. Adoption of
the amendment would not affect the rights of the holders of currently outstanding common stock, except, to the extent the additional authorized
shares are issued, for effects incidental to increasing the number of shares of common stock outstanding, such as dilution of earnings
per share and voting rights of current holders of common stock. If the amendment is adopted, it will become effective upon the filing
of the Certificate of Amendment to the Company’s Articles of Incorporation with the Secretary of State of the State of Nevada.
The description of the Certificate of Amendment
should be read in conjunction with and is qualified in its entirety by reference to the text of the proposed Certificate of Amendment
attached to this proxy statement as Appendix A.
Purpose of the Proposal
The approval of the Certificate of Amendment is
important for our ongoing business. Our Board believes it would be prudent and advisable to have the additional shares available to provide
additional flexibility regarding the potential use of shares of common stock for business and financial purposes in the future. Having
an increased number of authorized but unissued shares of common stock would allow us to take prompt action with respect to corporate opportunities
that develop, without the delay and expense of convening a special meeting of stockholders for the purpose of approving an increase in
our authorized shares. The additional shares could be used for various purposes without further stockholder approval. These purposes may
include: (i) raising capital, if we have an appropriate opportunity, through offerings of common stock or securities that are convertible
into or exercisable for shares of common stock; (ii) expanding our business through potential strategic transactions, including mergers,
acquisitions, licensing transactions and other business combinations or acquisitions of new product candidates or products; (iii) establishing
strategic relationships with other companies; (iv) exchanges of common stock or securities that are convertible into or exercisable for
shares of common stock for other outstanding securities; (v) providing equity incentives pursuant to the 2021 Plan, or another plan we
may adopt in the future, to attract and retain employees, officers or directors; (vi) utilizing the Company’s ATM facility; and
(vii) other general corporate purposes.
We intend to use the additional shares of common
stock that will be available to undertake any such issuances described above. As is the case with the shares of common stock which are
currently authorized but unissued, if the Certificate of Amendment is adopted by the stockholders, the Board will only have authority
to issue the additional shares of common stock from time to time without further action on the part of stockholders to the extent not
prohibited by applicable law or by the rules of any stock exchange or market on which our securities may then be listed or authorized
for quotation. Because it is anticipated that our directors and executive officers will be granted additional equity awards under the
2021 Plan, or another plan we adopt in the future, they may be deemed to have an indirect interest in the Certificate of Amendment, because
absent the Certificate of Amendment, we may not have sufficient authorized shares to grant such awards.
The increase in authorized shares of our common
stock will not have any immediate effect on the rights of existing stockholders. However, because our stockholders do not have any preemptive
rights, future issuance of shares of common stock or securities exercisable for or convertible into shares of common stock could have
a dilutive effect on our earnings per share, book value per share, and the voting rights of stockholders and could have a negative effect
on the price of our common stock.
Disadvantages to an increase in the number of
authorized shares of common stock may include:
| |
● |
Stockholders may experience further dilution of their ownership. |
| |
|
|
| |
● |
Stockholders will not have any preemptive or similar rights to subscribe for or purchase any additional shares of common stock that may be issued in the future, and therefore, future issuances of common stock, depending on the circumstances, will have a dilutive effect on the earnings per share, voting power and other interests of our existing stockholders. |
| |
|
|
| |
● |
The additional shares of common stock for which authorization is sought in this proposal would be part of the existing class of common stock and, if and when issued, would have the same rights and privileges as the shares of common stock presently outstanding. |
| |
|
|
| |
● |
The issuance of authorized but unissued shares of common stock could be used to deter a potential takeover of us that may otherwise be beneficial to stockholders by diluting the shares held by a potential suitor or issuing shares to a stockholder that will vote in accordance with the Board’s desires. A takeover may be beneficial to independent stockholders because, among other reasons, a potential suitor may offer such stockholders a premium for their shares of stock compared to the then-existing market price. We do not have any plans or proposals to adopt provisions or enter into agreements that may have material anti-takeover consequences. |
Except as described herein with respect to our
obligation under the Purchase Agreement to increase the number of authorized shares of common stock, we have no specific plan, commitment,
arrangement, understanding or agreement, either oral or written, regarding the issuance of common stock subsequent to this proposed increase
in the number of authorized shares at this time, and we have not allocated any specific portion of the proposed increase in the authorized
number of shares to any particular purpose. However, we have in the past conducted certain public and private offerings of common stock
and warrants, and we will continue to require additional capital in the near future to fund our operations. As a result, it is foreseeable
that we will seek to issue such additional shares of common stock in connection with any such capital raising activities, or any of the
other activities described above. The Board does not intend to issue any common stock or securities convertible into common stock except
on terms that the Board deems to be in the best interests of us and our stockholders. We are therefore requesting our stockholders approve
this proposal to amend our Articles of Incorporation to increase our authorized shares of common stock from 10,000,000 shares to 350,000,000
shares.
Vote Required
The affirmative vote of holders of a majority
of the voting power of the issued and outstanding shares of common stock of the Company is required for approval of the Increase of Authorized
Stock Proposal. For the purpose of the vote on this proposal, abstentions, broker non-votes and other shares not voted will not be counted
as votes cast and will have no effect on the result of the vote, although they will be considered present for the purpose of determining
the presence of a quorum.
Recommendation
The Board of Directors recommends that you vote
“FOR” approval of this proposal.
PROPOSAL 4
APPROVAL
OF THE ADJOURNMENT PROPOSAL (Item 4 on the Proxy Card)
Proposal 4 is to consider and vote upon the proposal
to approve adjourning the Annual Meeting, if necessary or appropriate in the discretion of the Board, to solicit additional proxies in
the event that there are not sufficient votes at the time of the Annual Meeting to any of Proposals 1 through 3.
General
The Annual Meeting may be adjourned to another
time or place, if necessary or appropriate in the discretion of the Board, to permit further solicitation of proxies to obtain additional
votes in favor of any of Proposals 1 through 3 (the “Adjournment”).
If, at the Annual Meeting, the number of shares
of common stock present or represented and voting in favor of any of Proposals 1 through 3 is insufficient to approve either such proposal,
the Company intends to move for the Adjournment in order to enable our Board to solicit additional proxies for approval of such proposal.
We are asking our stockholders to approve this Proposal 4 for the Adjournment if necessary or appropriate in the discretion of the Board.
Vote Required
The affirmative vote of a majority of the votes
cast is required for approval of the Adjournment. For the purpose of the vote on this proposal, abstentions, broker non-votes and other
shares not voted will not be counted as votes cast and will have no effect on the result of the vote, although they will be considered
present for the purpose of determining the presence of a quorum.
Recommendation
The Board recommends that you vote “FOR”
the approval of the Adjournment.
ADDITIONAL INFORMATION
Solicitation Expenses: Expenses in connection
with the solicitation of proxies will be paid by the Company. Proxies are being solicited principally by mail, by telephone and through
the internet. In addition, our directors, officers and regular employees, without additional compensation, may solicit proxies personally,
by e-mail, telephone, fax or special letter. We will reimburse brokerage firms and others for their expenses in forwarding proxy materials
to the beneficial owners of our shares.
How To Receive Additional Paper Copies of the
Proxy Statement: The Company has adopted a procedure called “householding” which has been approved by the SEC. The Company
and some brokers household proxy materials, delivering a single notice and, if applicable, this Proxy Statement and Annual Report, to
multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders or they participate
in electronic delivery of proxy materials. Stockholders who participate in householding will continue to access and receive separate proxy
cards. This process will help reduce our printing and postage fees, as well as save natural resources. If at any time you no longer wish
to participate in householding and would prefer to receive a separate Proxy Statement, or if you are receiving multiple copies of the
Proxy Statement and wish to receive only one, please notify your broker if your shares are held in a brokerage account or us if you hold
registered shares. You can notify us by sending a written request to LQR House Inc., Investor Relations, 6538 Collins Ave. Suite 344,
Miami Beach, Florida 33141 or by calling Investor Relations at (786)-389-9771, or by sending an e-mail to info@lqrhouse.com.
Stockholder Proposals for Consideration at
the 2026 Annual Meeting of Stockholders: Under the rules of the SEC, if a stockholder wants us to include a proposal in our Proxy
Statement and proxy card for presentation at our 2026 Annual Meeting of Stockholders, the proposal must be received by us at our principal
executive offices at LQR House Inc., Investor Relations, 6538 Collins Ave. Suite 344, Miami Beach, Florida 33141 by [*], 2026. The proposal
should be sent to the attention of the Chief Financial Officer.
Under our bylaws, certain procedures are provided
that a stockholder must follow to introduce an item of business, including the nomination of someone as a director, at an Annual Meeting
of Stockholders that is not included in our Proxy Statement. These procedures provide that an item of business to be introduced at an
annual meeting of stockholders must be submitted in writing to our Secretary at our principal executive offices and you must include information
set forth in our bylaws. See “Corporate Governance – Stockholder Nominations” above.
We must receive the notice of your intention to
propose an item of business at our 2026 Annual Meeting no later than the close of business on the ninetieth (90th) day nor
earlier than the close of business on the one hundred twentieth (120th) day prior to the first anniversary of the preceding
year’s annual meeting as specified in our bylaws.
If the 2026 Annual Meeting is not held within
30 days before or after the anniversary of the date of this year’s Annual Meeting, then the item of business must be received (i)
not earlier than the close of business on the one hundred twentieth (120th) day prior to the currently proposed annual meeting and not
later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or (ii) by the tenth (10th) business
day following the day on which public announcement of the date of such meeting is first made, whichever of (i) or (ii) occurs first. Assuming
that our 2026 Annual Meeting is held within 30 days of the anniversary of this Annual Meeting, we must receive notice of your intention
to introduce a nomination or other item of business at that meeting by [*], 2026.
You may contact LQR House’s Secretary at
the address mentioned above for a copy of the relevant bylaw provisions regarding the requirements for making stockholder proposals and
nominating director candidates.
The chairperson of the Annual Meeting may refuse
to allow the transaction of any business, or to acknowledge the nomination of any person, not made in compliance with the foregoing procedures.
2024 Annual Report: A copy of our 2024
Annual Report, as filed with the SEC on March 31, 2025, is available to stockholders without charge upon written request directed to our
Secretary at 6538 Collins Ave. Suite 344, Miami Beach, Florida 33141 or by phone at (786) 389-9771. The Company makes available free of
charge on or through its website, www.lqrhouse.com, its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K and all amendments to such reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable
after filing.
Other Matters To Be Considered At The Annual
Meeting: The Board is not aware of any other matters that are expected to come before the 2025 Annual Meeting other than those referred
to in this proxy statement and as set forth above. The Board has made no recommendation as to how the proxies will vote on such other
matters. If any other matter should come before the Annual Meeting, the individuals named on the proxy card intend to vote the proxies
in accordance with their best judgment.
By Order of the Board of Directors
| /s/ Lijun Chen |
|
| Lijun Chen |
|
| Chairman of the Board |
|
Annex A
ATTACHMENT
AMENDMENT TO
ARTICLES OF INCORPORATION
OF
LQR HOUSE INC.
Article 8 of the Articles of Incorporation of LQR House Inc. (the
“Corporation”) is hereby amended, restated, superseded and replaced in its entirety by the following:
Article 8 – Authorizes
Shares
The number of shares of stock which the Corporation shall have authority to issue is 350,000,000 shares, $0.0001 par value per
share, all of which shares are designated as common stock (“Common Stock”).
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