UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE 14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed
by the Registrant
|
☒
|
|
|
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 Pursuant to §240.14a-12
|
Check
the appropriate box:
SINO-GLOBAL
SHIPPING AMERICA, LTD.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
☒
|
No
fee required.
|
|
|
☐
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
|
|
(1)
|
Title
of each class of securities to which transaction applies:
|
|
|
|
|
(2)
|
Aggregate
number of securities to which transaction applies:
|
|
|
|
|
(3)
|
Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
|
|
|
|
|
(4)
|
Proposed
maximum aggregate value of transaction:
|
|
|
|
|
(5)
|
Total
fee paid:
|
|
|
|
|
|
☐
|
Fee
paid previously with preliminary materials.
|
|
|
☐
|
Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date
of its filing.
|
|
|
|
(1)
|
Amount
Previously Paid:
|
|
|
|
|
(2)
|
Form,
Schedule or Registration Statement No.:
|
|
|
|
|
(3)
|
Filing
Party:
|
|
|
|
|
(4)
|
Date
Filed:
|
PRELIMINARY
PROXY STATEMENT – SUBJECT TO COMPLETION
Sino-Global
Shipping America, Ltd.
1044 Northern Boulevard, Suite 305
Roslyn, New York 11576-1514
December 27, 2019, at 10:00 a.m., Eastern Time
To
the shareholders of Sino-Global Shipping America, Ltd.:
The
Annual Meeting of Shareholders of Sino-Global Shipping America, Ltd. (the “Company” or “Sino-Global”)
for the fiscal year ended June 30, 2019 will be held on December 27, 2019, at 10:00 a.m., Eastern Time, at the offices of Pryor
Cashman LLP, located at 7 Times Square, New York, New York 10036.
The
accompanying Notice of Annual Meeting and Proxy Statement, which you are urged to read carefully, provides important information
regarding the business to be conducted at the annual meeting.
You
are requested to complete, date and sign the enclosed proxy card and promptly return it in the enclosed envelope or vote by telephone
or Internet, whether or not you plan to attend the annual meeting. If you attend the meeting, you may vote in person even if you
have previously submitted a proxy card. Regardless of the number of shares you own or whether you plan to attend the annual
meeting, it is important that your shares be represented and voted. If you hold your shares in “street name” (that
is, through a broker, bank or other nominee), please complete, date and sign the voting instruction form that has been provided
to you by your broker, bank or other nominee and promptly return it in the enclosed envelope or review the instructions in the
materials forwarded by your broker, bank or other nominee regarding the option to vote on the Internet or by telephone. If you
hold your shares directly and plan to attend the meeting in person, please remember to bring a form of personal identification
with you and, if you are acting as a proxy for another shareholder, please bring written confirmation from the record owner that
you are acting as a proxy. If you hold your shares in “street name” and plan to attend the meeting in person, please
remember to bring a form of personal identification with you and proof of beneficial ownership.
On
behalf of the Board of Directors, I thank you for your support and continued interest in Sino-Global.
Sincerely,
Lei
Cao
Chairman
of the Board of Directors of
Sino-Global Shipping America, Ltd.
This
Notice and the Proxy Statement are first being mailed to shareholders on or about December [ ], 2019.
SINO-GLOBAL
SHIPPING AMERICA, LTD.
NOTICE
OF 2019 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FRIDAY, DECEMBER 27, 2019
|
|
|
Date
and Time
|
|
December
27, 2019, at 10:00 a.m., Eastern Time
|
Place
|
|
Pryor
Cashman LLP located at 7 Times Square, New York, New York 10036
|
Items
of Business
|
|
(1)
To elect each of the two Class I nominees named in the attached proxy statement to serve
on the Board of Directors until the annual meeting of shareholders for the fiscal year
ended 2022 or until his successor is duly elected and qualified;
|
|
|
(2)
To ratify the appointment of Friedman LLP as the Company’s independent registered
public accounting firm for our fiscal year ending June 30, 2020;
|
|
|
(3)
To vote on an advisory, nonbinding resolution to approve the compensation of the Company’s
named executive officers as disclosed in the attached proxy statement pursuant to the
compensation disclosure rules of the Securities and Exchange Commission;
(4)
To approve the Articles of Amendments to our Articles of Incorporation to effect a reverse stock split of our common stock,
no par value per share, at a ratio of up to one-for-five, such ratio to be determined in the discretion of the Company’s
Board of Directors;
|
|
|
(5)
To authorize an adjournment of the Annual Meeting, if necessary, to solicit additional
proxies if there are not sufficient votes in favor of Proposal 4; and
|
|
|
(6)
To transact any other business properly coming before the meeting.
|
Record
Date
|
|
You
can vote if, at the close of business on November 29, 2019 (the “Record Date”),
you were a holder of record of our common stock.
|
Proxy
Voting
|
|
All
shareholders are cordially invited to attend the Annual Meeting in person. However, to ensure your representation at the Annual
Meeting, you are urged to vote promptly by signing and returning the enclosed proxy card or by telephone or Internet, or if
you hold your shares in street name using the voting instruction form provided by your broker, bank or nominee, or by accessing
the website or toll-free number indicated on the voting instructions accompanying your proxy card to vote via the Internet
or phone.
|
The
Board of Directors unanimously recommends that you vote to:
|
●
|
elect
each of the two Class I nominees named in the attached proxy statement;
|
|
●
|
ratify
the appointment of Friedman LLP as the Company’s independent registered public accounting firm for the Company’s
fiscal year ending June 30, 2020;
|
|
|
|
|
●
|
approve
the compensation of the Company’s named executive officers as disclosed in this proxy statement;
|
|
●
|
approve
the Articles of Amendments to our Articles of Incorporation to effect a reverse stock split of our common stock, no par value
per share, at a ratio of up to one-for-five, such ratio to be determined in the discretion of the Company’s Board of
Directors (the “Reverse Stock Split Proposal”); and
|
|
|
|
|
●
|
authorize
an adjournment of the Annual Meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor
of the Reverse Stock Split Proposal.
|
By
Order of the Board of Directors,
Lei
Cao
Chairman
of the Board Of Directors of
Sino-Global Shipping America, Ltd.
STATEMENTS
REGARDING FORWARD-LOOKING INFORMATION
This
proxy statement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements relate to the financial condition, results of operations, cash flows, financing plans, business
strategies, capital and other expenditures, competitive positions, growth opportunities for existing products, plans and objectives
of management and other matters. Statements in this document that are not historical facts are identified as forward-looking statements
for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange
Act, and Section 27A of the Securities Act of 1933, as amended, or the Securities Act.
When
we use the words “anticipate,” “estimate,” “project,” “intend,” “expect,”
“plan,” “believe,” “should,” “likely” and similar expressions, we are making forward-looking
statements. These forward-looking statements are found at various places throughout this proxy statement and any other documents
we incorporate by reference in this proxy statement. We caution you not to place undue reliance on these forward-looking statements,
which speak only as of the date they were made. We do not undertake any obligation to publicly release any revisions to these
forward-looking statements to reflect events or circumstances after the date of this proxy statement or to reflect the occurrence
of unanticipated events.
These
forward-looking statements, including statements relating to our future business prospects, revenues, working capital, liquidity,
capital needs and income, wherever they occur in this proxy statement, are estimates reflecting our best judgment. These forward-looking
statements involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested
by the forward-looking statements. Forward-looking statements should, therefore, be considered in light of various important factors,
including those set forth in this proxy statement and those discussed from time to time in our Securities and Exchange Commission,
or SEC, reports, including our annual report on Form 10-K for the year ended June 30, 2019 filed with the SEC on September 30,
2019 and our subsequently filed quarterly reports on Form 10-Q. You should read and consider carefully the information about these
and other risks set forth under the caption “Risk Factors” in such filings.
As
used in this proxy statement, the terms “we,” “us,” “our,” the “Company,” and
“Sino-Global” refer to Sino-Global Shipping America Ltd. and our subsidiaries and affiliates, unless the context indicates
otherwise.
QUESTIONS
AND ANSWERS ABOUT THE PROXY MATERIALS
AND THE ANNUAL MEETING OF SHAREHOLDERS
FOR
THE FISCAL YEAR ENDED JUNE 30, 2019
Why
am I receiving these materials?
The
Board of Directors of Sino-Global Shipping America Ltd., or our Board of Directors, is providing these proxy materials to you
in connection with our annual meeting of common shareholders for the year ended June 30, 2019, which will take place on Friday,
December 27, 2019. Our common shareholders are invited to attend the annual meeting and are entitled to and requested to vote
on the proposals described in the attached proxy statement.
What
information is contained in the attached proxy statement?
The
information included in the attached proxy statement relates to the proposals to be voted on at the annual meeting, the voting
process, information including compensation concerning directors and our most highly paid executive officers, and certain other
required information.
What
am I voting on at the annual meeting?
You
will be voting on the following proposals:
(1)
To elect each of the two Class I nominees named in the attached proxy statement to serve on the Board of Directors until the annual
meeting of shareholders for the fiscal year ended June 30, 2022 when his successor is duly elected and qualified or until his
earlier resignation, removal from office, death or incapacity;
(2)
To ratify the appointment of Friedman LLP as the Company’s independent registered public accounting firm for the fiscal
year ending June 30, 2020;
(3)
To vote on an advisory, nonbinding resolution to approve the compensation of the Company’s named executive officers as disclosed
in this proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission;
(4)
To approve the Articles of Amendments to our Articles of Incorporation to effect a reverse stock split of our common stock, no
par value per share, at a ratio of up to one-for-five, such ratio to be determined in the discretion of the Company’s Board
of Directors;
(5)
To authorize an adjournment of the Annual Meeting, if necessary, to solicit additional proxies if there are not sufficient votes
in favor of Proposal 4; and
(6)
To transact any other business properly coming before the meeting.
How
does the Board of Directors recommend I vote?
Our
Board of Directors unanimously recommends that you vote your shares of common stock:
(1) “FOR” each of the Class I nominees named in the attached proxy statement to serve on the Board of Directors;
(2)
“FOR” the ratification of the appointment of Friedman LLP as the Company’s independent registered public
accounting firm for the fiscal year ending June 30, 2020;
(3)
“FOR” an advisory, nonbinding resolution to approve the compensation of the Company’s named executive
officers;
(4)
“FOR” the approval of the Articles of Amendments to our Articles of Incorporation to effect a reverse stock
split of our common stock, no par value per share, at a ratio of up to one-for-five, such ratio to be determined in the discretion
of the Company’s Board of Directors; and
(5)
“FOR” the authorization of an adjournment of the Annual Meeting, if necessary, to solicit additional proxies
if there are not sufficient votes in favor of Proposal 4.
What
shares can I vote?
You
may vote shares of our common stock owned by you as of the close of business on November 29, 2019 (the “Record Date”).
Each share of common stock is entitled to one vote. As of November 29, 2019, we had [ ] shares of common stock outstanding.
How
do I vote before the meeting?
If
you are a registered shareholder, meaning that you hold your shares in certificate form, you have three voting options:
(1)
By Internet, which we encourage if you have Internet access, at the address shown on your proxy card;
(2)
By telephone, using any touch-tone telephone to transmit your voting instructions by calling the number specified on your
proxy card; or
(3)
By mail, by completing, signing and returning your proxy card.
If
you hold your shares through an account with a bank or broker, your ability to vote by the Internet depends on their voting procedures.
Please follow the directions that your bank or broker provides.
May
I vote at the annual meeting?
If
you are a registered shareholder, you may vote your shares owned by you as of November 29, 2019, at the annual meeting if you
attend in person. If you hold your shares through an account with a bank or broker, please follow the directions provided to you
by your bank or broker. If you wish to vote in person at the meeting, please contact your bank or broker to learn the procedures
necessary to allow you to vote your shares in person. Even if you plan to attend the meeting, we encourage you to vote your shares
by proxy. You may vote by proxy through the Internet, by telephone or by mail.
Can
I change my mind after I return my proxy?
You
may change your vote at any time before the polls close at the conclusion of voting at the meeting. You may do this by (1) signing
another proxy card with a later date and returning it to us before the meeting, (2) voting again over the Internet prior to 1:00
a.m., New York time, on December 27, 2019, (3) voting again via the telephone prior to 1:00 a.m., New York time, on December 27,
2019, or (4) voting at the meeting if you are a registered shareholder or have obtained a legal proxy from your bank or broker.
What
if I return my proxy card but do not provide voting instructions?
Proxies
that are signed and returned but do not contain instructions will be voted in favor of all proposals and in accordance with the
best judgment of the named proxies on any other matters properly brought before the meeting.
What
does it mean if I receive more than one proxy card or instruction form?
It
indicates that your shares are registered differently and are in more than one account. To ensure that all shares are voted, please
either vote each account by telephone or on the Internet, or sign and return all proxy cards. We encourage you to register all
your accounts in the same name and address. Those holding shares through a bank or broker should contact your bank or broker and
request consolidation.
Will
my shares be voted if I do not provide my proxy or instruction form?
If
you are a registered shareholder and do not provide a proxy, you must attend the meeting in order to vote your shares. If you
hold shares through an account with a bank or broker, your shares may be voted even if you do not provide voting instructions
on your instruction form. Brokerage firms have the authority to vote shares for which their customers do not provide voting instructions
on certain routine matters. The ratification of Friedman LLP as the Company’s independent registered public accounting firm
for the fiscal year ending June 30, 2020, is considered a routine matter for which brokerage firms may vote without specific
instructions. The other matters are not considered routine matters for which brokerage firms may vote without specific instructions.
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. Shares that a broker
is not authorized to vote are counted as “broker non-votes.”
How
can I attend the meeting?
The
meeting is open to all holders of our common stock as of November 29, 2019.
May
shareholders ask questions at the annual meeting?
Yes.
Representatives of the Company will answer questions of general interest at the end of the meeting.
How
many votes must be present to hold the annual meeting?
In
order for us to conduct our annual meeting, at least one-third (1/3) of our issued and outstanding shares of common stock as of
November 29, 2019, must be present in person or by proxy at the annual meeting. This is referred to as a quorum. Abstentions and
broker non-votes will be counted for purposes of establishing a quorum at the meeting. Your shares are counted as present at the
meeting if you attend the meeting and vote in person or if you properly return a proxy by Internet, telephone or mail.
Where
can I find a copy of the proxy materials?
A
copy of the proxy materials is available online at http://www.edocumentview.com/SGSA.
How
many votes are needed to approve the Company’s proposals?
Proposal
1. The nominees receiving the highest number of “For” votes will be elected as directors.
This number is called a plurality. Shares not voted will have no impact on the election of directors. The proxy given will be
voted “For” the nominees for directors unless a properly executed proxy card is marked “Withhold”
as to a particular nominee for director.
Proposal
2. The ratification of the appointment of Friedman LLP as the Company’s independent registered public accounting
firm for the fiscal year ending June 30, 2020, requires that a majority of the votes cast at the meeting be voted “For”
the proposal, excluding properly executed proxy card marked “Abstain,” which will not be voted or counted for
purposes other than quorum.
Proposal
3. The advisory vote to approve executive officer compensation is advisory in nature and not binding on our Company. A
vote “For” the proposal by a majority of the votes cast at the meeting would be considered an advisory approval
of the proposed executive officer compensation. If a majority of shares do not vote in favor of the proposal, the Compensation
Committee and Board of Directors will carefully consider the outcome when making future compensation decisions.
Proposal 4. The approval
of the Articles of Amendments to our Articles of Incorporation to effect a reverse stock split of our common stock, no par value
per share, at a ratio of up to one-for-five, with such ratio being selected in the discretion of the Company’s Board of Directors,
requires that a majority of the votes entitled to be cast at the meeting be voted “For” the proposal, excluding
properly executed proxy card marked “Abstain,” which will not be voted or counted for purposes other than quorum.
Proposal
5. The authorization of an adjournment of the Annual Meeting, if necessary, to solicit additional proxies if there are
not sufficient votes in favor of the Reverse Stock Split Proposal, will be approved if the
votes cast “For” the adjournment exceed the votes cast “Against” the adjournment. Abstentions and broker
non-votes, if any, will not affect the outcome of the vote on this matter.
Sino-Global
Shipping America, Ltd.
PROXY
STATEMENT
FISCAL YEAR 2019 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FRIDAY, DECEMBER 27, 2019
PROPOSAL
1:
ELECTION OF TWO (2) CLASS I DIRECTORS AND DIRECTOR BIOGRAPHIES
(ITEM 1 ON THE PROXY CARD)
A
brief biography of each director in each class follows. You are asked to vote for the Class I nominees to serve as Class I members
of the Board of Directors. The Class I nominees for our Board of Directors have consented to serve if elected, whose term will
be from the date of election until the annual meeting of shareholders for the fiscal year of 2022. The term of the Class II members
of the Board of Directors continues until the annual meeting of shareholders for the fiscal year of 2020, and the term of the
Class III member of the Board of Directors continues until the annual meeting of shareholders for the fiscal year of 2021.
|
|
Nominees for election as Class I members of the Board
of Directors to serve a three year term till the annual meeting of shareholders for the
fiscal year of 2022:
|
|
|
|
Jianming Li
Independent Director
Age — 62
Director since 2019
|
|
Mr. Li is presently a business consultant of Zhanjiang Port (Group) Co., Ltd.. Prior to that, Mr. Li was a full-time consultant of Baosteel Group Hong Kong Baoyun Company from February 2015 to November 2017, Deputy General Manager of Baosteel Group Hong Kong Baojin Company from November 2010 to February 2015, Deputy General Manager of Purchasing Center and General Manager of Logistics Department of Baosteel Group. Mr. Li graduated with a Bachelor of Engineering Degree in Navigation and Driving from Shanghai Maritime University in 1982. Mr. Li was chosen to serve as a director because of his knowledge and experiences related to shipping logistics industry.
|
|
|
|
Zhikang Huang
Chief Operating Officer and Director
Age — 43
Director since 2015
|
|
Mr. Huang has been our Chief Operating Officer since 2010. Prior to 2010, he served as Director of Sino-Global Shipping Australia, for which he was responsible for regional operations, marketing and regulation oversight. From 2006 through 2010, Mr. Huang served as our company’s Vice President, with duties focused on company operation and strategy, international shipping and marketing. From 2004 through 2006, Mr. Huang served as our company’s Operations Manager, and from 2002 through 2004, he served as an operator with our company. Mr. Huang obtained his degree in English from Guangxi University in 1999. Mr. Huang’s long-time experience with our company qualifies him to serve a director of the Company.
|
|
|
|
|
|
The Class III member of the Board of Directors whose term continues
to the annual meeting of shareholders for the fiscal year of 2021:
|
|
|
|
Jing Wang
Independent Director
Age — 72
Director since 2007
|
|
Mr. Wang currently serves as Chief Economist to China Minsheng Banking Corp., Ltd. and has held this position since December 2002. Mr. Wang was a Chinese Project Advisor for the World Bank from 1990 until 1994. From 1998 through 2000, Mr. Wang was the vice director of Tianjin Security and Futures Supervision Office, in charge of initial public offerings and listing companies. Mr. Wang is an independent director for Tianjin Binhai Energy & Development Co. Ltd., (Shenzhen Stock Exchange: 000695); Tianjin Marine Shipping Co., Ltd. (Shanghai Stock Exchange: 600751), and ReneSola Company (London Stock Exchange: SOLA). Mr. Wang received a Bachelor degree in Economics from Tianjin University of Finance and Economics. The Board believes that Mr. Wang’s economics background and experience working with public companies qualify him to serve a director of the Company.
|
|
|
|
|
|
Class II members of the Board of Directors whose terms continue to the annual meeting of shareholders for the fiscal year of 2020:
|
|
|
|
Lei Cao
Chief Executive Officer and Director
Age — 56
Director since 2001
|
|
Mr. Cao is our Chief Executive Officer and a director. Mr. Cao founded our company in 2001 and has been the Chief Executive Officer since that time. Mr. Cao has been Chief Executive officer of our company since its formation. Prior to founding our company, Mr. Cao was a Chief Representative of Wagenborg-Lagenduk Scheepvaart BV, Holland, from 1992 – 1993, Director of the Penavico-Beijing’s shipping agency from 1987 through 1992, and a seaman for Cosco-Hong Kong from 1984 through 1987. Mr. Cao received his EMBA degree in 2009 from Shanghai Jiao Tong University. Mr. Cao was chosen as a director because he is the founder of our company and we believe his knowledge of our company and years of experience in our industry give him the ability to guide our company as a director.
|
|
|
|
Tieliang Liu
Independent Director
Age — 60
Director since 2013
|
|
Dr. Liu currently serves as the vice president in charge of accounting and finance to China Sun-Trust Group Ltd. and has held this position since 2001. Dr. Liu was a financial controller for Huaxing Group Ltd from 1998 to 2001. From 1996 through 1998, he was the chief accountant of China Enterprise Consulting Co., Ltd. Before working in industry, Dr. Liu taught accounting and finance in a university for more than ten years and has published dozens of books and articles. Dr. Liu is a CPA in China. He received a PhD, master and bachelor degrees from Tianjin University of Finance and Economics. Dr. Liu has been chosen to serve as a director because of his accounting and business knowledge and experience in working with small and medium-sized companies.
|
CERTAIN
OTHER BOARD INFORMATION
Involvement
in Certain Legal Proceedings
To
the best of our knowledge, none of our directors or executive officers has been convicted in a criminal proceeding, excluding
traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past ten
years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities
subject to, federal or state securities laws, or a finding of any violation of federal or state securities or commodities laws,
any laws respecting financial institutions or insurance companies, any law or regulation prohibiting mail or wire fraud in connection
with any business entity or been subject to any disciplinary sanctions or orders imposed by a stock, commodities or derivatives
exchange or other self-regulatory organization, except for matters that were dismissed without sanction or settlement. None of
our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors,
executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.
Board
Leadership Structure
Mr.
Lei Cao currently holds both the positions of Chief Executive Officer and Chairman of the Board. These two positions have not
been consolidated into one position; Mr. Cao simply holds both positions at this time. The Board of Directors believes that Mr.
Cao’s service as both Chief Executive Officer and Chairman of the Board is in the best interests of the Company and its
shareholders. Mr. Cao possesses detailed and in-depth knowledge of the issues, opportunities and challenges facing the Company
and its business and is thus best positioned to develop agendas that ensure that the Board’s time and attention are focused
on the most critical matters. His combined role enables decisive leadership, ensures clear accountability, and enhances the Company’s
ability to communicate its message and strategy clearly and consistently to the Company’s shareholders, employees, customers,
vendors and suppliers.
We
do not have a lead independent director because of the foregoing reasons and also because we believe our independent directors
are encouraged to freely voice their opinions on a relatively small company board. We believe this leadership structure is appropriate
because we are a smaller reporting company; as such, we deem it appropriate to be able to benefit from the guidance of Mr. Cao
as both our Chief Executive Officer and Chairman of the Board.
Risk
Oversight
Our
Board of Directors plays a significant role in our risk oversight. The Board of Directors makes all relevant Company decisions.
As such, it is important for us to have our Chief Executive Officer serve on the Board as he plays a key role in the risk oversight
of the Company. As a smaller reporting company with a small board of directors, we believe it is appropriate to have the involvement
and input of all of our directors in risk oversight matters.
For
additional information regarding, among other related items, our Board of Directors, Corporate Governance, the Compensation Committee,
the Audit Committee and the Corporate Governance Committee and compensation of our named executive officers please see the section
titled “BOARD OF DIRECTORS, CORPORATE GOVERNANCE AND OTHER RELATED INFORMATION.”
WE
RECOMMEND THAT YOU VOTE FOR THE ELECTION
OF THE CLASS I NOMINEES TO THE BOARD OF DIRECTORS.
PROPOSAL
2
RATIFICATION OF THE APPOINTMENT OF FRIEDMAN LLP
(ITEM 2 ON THE PROXY CARD)
What
am I voting on?
A
proposal to ratify the appointment of Friedman LLP as the Company’s independent registered public accounting firm for the
fiscal year ending June 30, 2020. The Audit Committee of the Board of Directors has appointed Friedman LLP to serve as the Company’s
fiscal year 2020 independent registered public accounting firm. Although the Company’s governing documents do not require
the submission of this matter to shareholders, the Board of Directors considers it desirable primarily as a matter of good corporate
governance that the appointment of Friedman LLP be ratified by shareholders.
What
services does Friedman LLP provide?
Audit
services provided by Friedman LLP for fiscal year 2019 included the examination of the consolidated financial statements of the
Company and services related to periodic filings made with the SEC.
Will
a representative of Friedman LLP be present at the meeting?
One
or more representatives of Friedman LLP is expected to be present at the meeting. The representatives will have an opportunity
to make a statement if they desire and will be available to respond to questions from shareholders.
What
if this proposal is not approved?
If
the shareholders do not ratify the appointment, our Audit Committee will reconsider whether or not to retain Friedman LLP. Even
if the appointment is ratified, the Audit Committee, at its discretion, may change the appointment at any time during the year
if the Audit Committee determines that such a change would be in our best interests and the best interest of our shareholders.
What
vote is required to ratify this proposal?
This
Proposal 2 requires the affirmative vote of a majority of the shares present or represented by proxy and voting at the Annual
Meeting with quorum.
WE
RECOMMEND THAT YOU VOTE FOR THE RATIFICATION OF FRIEDMAN LLP
AS THE COMPANY’S FISCAL YEAR 2020 INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM.
PROPOSAL
3
ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
(ITEM 3 ON THE PROXY CARD)
What
am I voting on?
We
are asking our shareholders to approve, on an advisory basis, the compensation of the Company’s Named Executive Officers
for 2019 as disclosed in the Proxy Statement pursuant to the requirements of Item 402 of Regulation S-K. This advisory vote, which
is sometimes referred to as a “say on pay” vote is required by Section 14A of the Exchange Act.
Is
this vote binding on our Company?
As
an advisory vote, this proposal is not binding upon the Company, the Board or the Compensation Committee and will not be construed
as overruling a decision by the Company, the Board or the Compensation Committee or creating or implying any additional fiduciary
duty for the Company, the Board or the Compensation Committee. However, the Compensation Committee and the Board value the opinions
expressed by shareholders in their vote on this proposal and will continue to consider the outcome of the vote when making future
compensation decisions regarding named executive officers.
How
often will shareholders vote on named executive officer compensation?
Our
current policy is to provide shareholders with an opportunity to approve the compensation of the named executive officers every
year at the annual meeting of shareholders. It is expected that the next such vote will occur at the fiscal year 2020 Annual Meeting
of Shareholders.
What
vote is required to approve this proposal?
Approval
of this Proposal 3 requires the affirmative vote of a majority of the shares present or represented by proxy and voting at an
Annual Meeting with quorum.
What
are shareholders being asked to approve?
The
Board of Directors is requesting your non-binding approval of the following resolution:
Resolved,
that the shareholders approve, in a nonbinding vote, the compensation of the Company’s Named Executive Officers, as disclosed
in this proxy statement.
What
if this proposal is not approved?
Pursuant
to Section 14A of the Exchange Act, this vote is advisory only, and accordingly, is not binding on the Company or on our Board
of Directors. Although the vote is non-binding, the Compensation Committee and the Board of Directors will carefully consider
the outcome of the vote when making future compensation decisions.
WE
RECOMMEND THAT YOU VOTE IN FAVOR OF THE NONBINDING ADVISORY
RESOLUTION APPROVING NAMED EXECUTIVE OFFICER COMPENSATION.
PROPOSAL
4
APPROVAL
OF THE ARTICLES OF AMENDMENTS TO OUR ARTICLES OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT OF OUR COMMON STOCK, NO PAR VALUE
PER SHARE, AT A RATIO OF UP TO ONE-FOR-FIVE, such ratio to be determined in the discretion
of the Company’s Board of Directors (THE “REVERSE STOCK SPLIT PROPOSAL”).
(ITEM 4 ON THE PROXY CARD)
Purpose
and Background of the Reverse Stock Split
On
November 27, 2019, the Board of Directors approved the proposal authorizing the reverse stock split because the Board of Directors
believes that effecting the reverse stock split could, in some circumstances, be an effective means of maintaining, or if necessary,
regaining, compliance with the minimum trading price requirement for continued listing of our common stock on The Nasdaq Capital
Market.
On
January 22, 2019, the Company received a letter from The Nasdaq Stock Market regarding the Company’s failure to comply with
Nasdaq Continued Listing Rule (“Rule”) 5550(a)(2), which requires listed securities to maintain a minimum bid price
of $1.00 per share. A failure to comply with Rule 5550(a)(2) exists when listed securities fail to maintain a closing bid price
of at least $1.00 per share for 30 consecutive business days. Based on the closing bid price for the 30 consecutive business days
from December 4, 2018 through January 18, 2019, the Company failed to meet the aforesaid requirement.
Under
Rule 5810(c)(3)(A), the Company was provided a compliance period of 180 calendar days, until July 22, 2019, to regain compliance.
If at any time during this 180 day period the closing bid price of the Company’s securities is at least $1.00 for a minimum
of ten consecutive business days, the Company’s compliance will be regained.
On
July 23, 2019, The Nasdaq Stock Market granted the Company an additional 180 calendar days, or until January 20, 2020, to regain
compliance with the $1.00 per share minimum required for continued listing on The Nasdaq Capital Market pursuant to Rule 5550(a)(2).
To
regain compliance, the bid price of the Company's common stock must close at or above $1.00 per share for a minimum of ten consecutive
business days at any time during the second 180-day compliance period. The Company has been monitoring the closing bid price of
its common stock and now considers effecting a reverse stock split.
If
the reverse stock split successfully increases the per share price of our common stock, the Board of Directors believes this increase
will enable us to maintain The Nasdaq Capital Market listing of our common stock.
If
we again cease to comply with the minimum per share average closing price standard of Rule 5550(a)(2) and fail to regain compliance
by the end of the second six-month cure period, or January 20, 2020, our common stock will be subject to delisting by the Nasdaq
Stock Market. In the event that our common stock is delisted by the Nasdaq Stock Market, our common stock would likely trade on
the over-the-counter market. If our shares were to trade on the over-the-counter market, selling our common shares could be more
difficult because smaller quantities of shares would likely be bought and sold, and transactions could be delayed. In addition,
in the event our common shares are delisted, broker-dealers have certain regulatory burdens imposed upon them, which may discourage
broker-dealers from effecting transactions in our common shares, further limiting the liquidity of our common shares. These factors
could result in lower prices and larger spreads in the bid and ask prices for common shares. Such potential delisting from the
Nasdaq and continued or further declines in our share price could also greatly impair our ability to raise additional necessary
capital through equity or debt financing, including short-term debt financing provided by foreign lenders.
In
light of the factors mentioned above, our Board of Directors approved this proposal as a potential means of maintaining the price
of our common stock above $1.00 per share in compliance with Rule 5550(a)(2).
Potential
Increased Investor Interest
In
approving this proposal, the Board of Directors considered that the Company’s common stock may not appeal to brokerage firms
that are reluctant to recommend lower priced securities to their clients. Investors may also be dissuaded from purchasing lower
priced stocks because the brokerage commissions, as a percentage of the total transaction, tend to be higher for such stocks.
Moreover, the analysts at many brokerage firms do not monitor the trading activity or otherwise provide coverage of lower priced
stocks.
The
Reverse Stock Split Proposal
If
the shareholders approve the proposal to authorize the Board of Directors to implement the reverse stock split, we will amend
our Amended and Restated Articles of Incorporation (“Articles of Incorporation”) to add the following paragraph at
the end of the first paragraph of Section 1 of Article III thereof:
“As
of 12:01 a.m., Eastern Time, on [ ], [ ] (the “Effective Time”), a reverse stock split (“Reverse Stock Split”)
will occur, as a result of which each [ ] ( ) shares of Common Stock of the Corporation issued and outstanding or held by the
Corporation in its treasury (“Old Common Stock”) shall automatically, without further action on the part of the Corporation
or any holder of such Common Stock, be reconstituted, combined and converted into one (1) share of the Corporation’s Common Stock (“New
Common Stock”). The Corporation will not issue fractional shares. The number of shares to be issued to each holder will
be rounded up to the nearest whole number if, as a result of the Reverse Stock Split, the number of shares owned by any holder
would not be a whole number. From and after the Effective Time, certificates representing Old Common Stock shall confer no right
upon the holders thereof other than the right to exchange them for certificates representing New Common Stock pursuant to the
provisions hereof.”
By
approving this proposal, shareholders will approve the Board of Directors to use its discretion to select a reverse split ratio
of up to 1-for-5 which it deems in the best interests of the Company and its shareholders. In addition, the Board of Directors
shall have the discretion to select the date to specify the “Effective Time.” Further, the Board of Directors shall
have the discretion to abandon such amendment even if it is approved by the shareholders.
Principal
Effects of the Reverse Stock Split
If
implemented, the reverse stock split will be effected simultaneously for all issued and outstanding shares of common stock and
the exchange ratio will be the same for all issued and outstanding shares of common stock. The reverse stock split will affect
all of our shareholders uniformly and will not affect any shareholder’s percentage ownership interests in the Company, except
to the extent that the reverse stock split would otherwise result in any of our shareholders owning a fractional share (in which
case the fractional amount will be rounded up to the next whole share). After the reverse stock split, the shares of our common
stock will have the same voting rights and rights to dividends and distributions and will be identical in all other respects to
our common stock now authorized. Common stock issued pursuant to the reverse stock split will remain fully paid and non-assessable.
The reverse stock split will not affect the Company continuing to be subject to the periodic reporting requirements of the Exchange
Act. The reverse stock split is not intended to be, and will not have the effect of, a “going private transaction”
covered by Rule 13e-3 under the Exchange Act.
The
reverse stock split may result in some shareholders owning “odd-lots” of less than 100 shares of our common stock.
Brokerage commissions and other costs of transactions in odd-lots are generally higher than the costs of transactions in “round-lots”
of even multiples of 100 shares.
Following
the effectiveness of any reverse stock split approved by the shareholders and implementation by the Board of Directors, current
shareholders will hold fewer shares of common stock, with such number of shares.
In
deciding whether to implement the reverse stock split and if so, the ratio, the Board of Directors will consider primarily the
satisfaction of The Nasdaq Stock Market continued listing requirements, as described above. It may also consider, among other
things: (i) the market price of the common stock at the time of the reverse stock split; (ii) the number of shares that
will be outstanding after the split; (iii) the shareholders’ equity at such time; (iv) the shares of common stock
available for issuance in the future; (v) the liquidity of the common stock in the market and any change in liquidity that
may result; and (vi) the nature of the Company’s operations. The Board of Directors maintains the right to elect not
to proceed with the reverse stock split if it determines, in its sole discretion, that we will be able to satisfy the continued
listing requirements of The Nasdaq Stock Market without implementing the reverse stock split or if this proposal is otherwise
no longer in the best interests of the Company.
IF
THIS PROPOSAL IS NOT APPROVED, WE MAY BE UNABLE TO MAINTAIN THE LISTING OF OUR COMMON STOCK ON THE NASDAQ STOCK MARKET, WHICH
COULD ADVERSELY AFFECT THE LIQUIDITY AND MARKETABILITY OF OUR COMMON STOCK.
Fractional
Shares
No
fractional shares will be issued in connection with the reverse stock split. Instead, we will issue one full share of the post-reverse
stock split common stock to any shareholder who would have been entitled to receive a fractional share as a result of the reverse
stock split. Each common shareholder will hold the same percentage of the outstanding common stock immediately following the reverse
split as that shareholder did immediately prior to the reverse split, except for minor adjustment due to the additional net share
fraction that will need to be issued as a result of the treatment of fractional shares.
Risks
Associated with the Reverse Stock Split
There
are risks associated with the reverse stock split, including that the reverse stock split may not result in a sustained increase
in the per share price of our common stock. There is no assurance that:
|
●
|
the
market price per share of our common stock after the reverse stock split will rise in proportion to the reduction in the number
of shares of our common stock outstanding before the reverse stock split;
|
|
●
|
the
reverse stock split will result in a per share price that will attract brokers and investors who do not trade in lower priced
stocks; and
|
|
●
|
the
market price per share will either exceed or remain in excess of the $1.00 minimum bid price as required by Rule 5550(a)(2),
or that we will meet all other the requirements of The Nasdaq Stock Market for continued inclusion for trading on The Nasdaq
Capital Market.
|
Shareholders
should note that the effect of the reverse stock split, if any, upon the market price for our common stock cannot be accurately
predicted. In particular, we cannot assure you that prices for shares of our common stock after the reverse stock split will be
the number of times equals exactly to the ratio multiplied by the prices for shares of our common stock immediately prior
to the reverse stock split. Furthermore, even if the market price of our common stock does rise following the reverse stock split,
we cannot assure you that the market price of our common stock immediately after the proposed reverse stock split will be maintained
for any period of time. Even if an increased per-share price can be maintained, the reverse stock split may not achieve the desired
results that have been outlined above. Moreover, because some investors may view the reverse stock split negatively, we cannot
assure you that the reverse stock split will not adversely impact the market price of our common stock.
The
market price of our common stock will also be based on our performance and other factors, some of which are unrelated to the reverse
stock split or the number of shares outstanding. If the reverse stock split is effected and the market price of our common stock
declines, the percentage declines as an absolute number and as a percentage of our overall market capitalization may be greater
than would occur in the absence of a reverse stock split. The total market capitalization of our common stock after implementation
of the reverse stock split, when and if implemented, may also be lower than the total market capitalization before the reverse
stock split. Furthermore, the liquidity of our common stock could be adversely affected by the reduced number of shares that would
be outstanding after the reverse stock split.
While
we believe that the reverse stock split will be sufficient to maintain our listing on The Nasdaq Stock Market, it is possible
that, even if the reverse stock split results in a closing price for our common stock that exceeds $1.00 per share, we may not
be able to continue to satisfy the other criteria for continued listing of our common stock on The Nasdaq Stock Market. Although
we believe that we will satisfy all of the other continued listing criteria, we cannot assure you that this will be the case.
Effect
on Outstanding and Authorized Shares of Common Stock
The proposed amendment to our Articles
of Incorporation to effect the reverse stock split will not change the number of authorized shares of common stock or preferred
stock, or the par value of common stock or preferred stock. As of the date of this proxy statement, we do not have any current
plans, arrangements or understandings relating to the issuance of any additional shares of authorized common stock that will become
available following the reverse stock split, other than that disclosed in our filings with the SEC.
The
following table sets forth the number of shares of our common stock that was and would be (i) issued and outstanding, (ii) held
in treasury and (iii) authorized for issuance and neither issued nor reserved for issuance, in each case, before and after
the reverse stock split, based on information as of December [ ], 2019, the last practicable date before the printing of this
proxy statement.
|
|
Before
Reverse Stock Split
Ratio of 1:5*
|
|
|
After
Reverse Stock Split
Ratio of 1:5*
|
|
Number of Shares of Common Stock Issued and Outstanding
|
|
|
[ ]
|
|
|
|
[ ]
|
|
Number of Treasury Shares Outstanding
|
|
|
175,497
|
|
|
|
35,100
|
|
Number of Shares of Common Stock Reserved for Issuance
|
|
|
8,458,903
|
**
|
|
|
1,691,781
|
|
Number of Authorized Shares Neither Outstanding Nor Reserved for Issuance
|
|
|
[ ]
|
|
|
|
[ ]
|
|
|
*
|
Assuming
a 1-for-5 reverse split ratio is selected by the Board of Directors.
|
|
**
|
Including
6,458,903 shares of common stock reserved under the Equity Compensation Plans (as defined below) and 2,000,000 shares of common
stock reserved for the Series “A” warrants, which were exercisable as of September 14, 2018 at purchase price of $1.75
per share, and will expire five and a half (5.5) years from March 14, 2018, the date of issuance,
|
As
illustrated in the table above, because the number of authorized shares will not be affected by the reverse stock split, and will
continue to be 50,000,000, a reverse stock split would result in a significant increase in the number of authorized and unissued
shares of common stock. Because our shareholders have no preemptive rights to purchase or subscribe for any of our unissued common
stock, the future issuance of additional shares of common stock will reduce our current shareholders’ percentage ownership
interest in the total outstanding shares of common stock. As of the date of this proxy statement, we have no plans, proposals
or arrangements to issue any shares of common stock that would become newly available for issuance as a result of the reverse
stock split.
Effect
on Outstanding Stock Options, Restricted Stock and Other Equity Compensation Awards
As
of June 30, 2019, there were an aggregate of 85,000 shares of common stock subject
to outstanding stock options under our 2008 Incentive Plan and 2014 Incentive Plan (collectively, the “Equity Compensation
Plans”). In addition, we may issue options to purchase up to 238,903 shares under the 2008 Incentive Plan, and up to 6,220,000
shares of common stock or other securities convertible or exercisable for common stock under the 2014 Incentive Plan, and therefore
there are 6,458,903 reserved shares under the Equity Compensation Plans. The Compensation Committee of the Board of Directors
has the discretion to determine the appropriate adjustment to these awards and the provisions to of the Equity Compensation Plans
in the event of a reverse stock split. Should the reverse stock split be effected, the Compensation Committee of the Board of
Directors will approve proportionate adjustments to the number of shares of common stock available for issuance under our Equity
Compensation Plans, the individual grant limitations imposed under the Equity Compensation Plans and to the terms of the outstanding
awards including the number of shares and the exercise price relating to any award under our Equity Compensation Plans.
In
addition, as of the date of this proxy statement, there are 2,000,000 shares reserved for the Series “A” warrants,
which entitle its holders to purchase up to 2,000,000 shares of the Company’s common stock at a purchase price of $1.75 per
share (the “Exercise Price”). Upon effectiveness of the reverse stock split, assuming a 1-for-5 reverse split ratio
is selected by the Board of Directors, the Exercise Price shall be multiplied by 5, and the number of shares issuable upon exercise
of the Series “A” warrant shall be proportionately adjusted such that the aggregate Exercise Price of the Series “A”
warrant shall remain unchanged.
Accordingly,
if the reverse stock split is implemented, we expect the number of all outstanding equity awards will be proportionately adjusted
by the Compensation Committee, pursuant to its existing authority under the Equity Compensation Plans, using the same reverse
split ratio selected by the Board of Directors. In connection with the reverse stock split, the Compensation Committee will implement
only technical, conforming changes to the Equity Compensation Plans and the terms of outstanding awards. For illustrative purposes
only, if a 1-for-5 reverse split ratio is selected by the Board of Directors, the 6,458,903 shares of common stock that remain
available for issuance under our Equity Compensation Plans as of December [ ], 2019, will be adjusted to 1,291,781 shares. In
addition, if a 1-for-5 reverse split ratio is selected by the Board of Directors, the exercise price per share for each stock
option would be increased by 5 times, such that upon an exercise, the aggregate exercise price payable by the option holder to
us would remain the same. For illustrative purposes only, an outstanding stock option to purchase 100 shares of common stock,
exercisable at $1.00 per share, will be adjusted as a result of a 1-for-5 reverse split ratio into a stock option to purchase
20 shares of common stock at an exercise price of $5.00 per share.
In
addition, if the reverse stock split is implemented and a 1-for-5 reverse split ratio is selected by the Board of Directors, the
number of shares issuable upon exercise of the Series “A” warrants will be proportionately adjusted from 2,000,000
to 400,000, and the Exercise Price will be adjusted from $1.75 per share to $8.75 per share.
Possible
Anti-takeover Effects of a Reverse Stock Split
Release
No. 34-15230 of the staff of the SEC requires disclosure and discussion of the effects of any action, including the proposals
discussed herein, that may be used as an anti-takeover mechanism. Since the amendment to our Articles of Incorporation to effect
the reverse stock split will not adjust the number of authorized shares of our common stock, which will continue to be 50,000,000,
the reverse stock split, if effected, will result in a relative increase in the number of authorized but unissued shares of our
common stock vis-à-vis the outstanding shares of our common stock and, could, under certain circumstances, have an anti-takeover
effect, although this is not the purpose or intent of our Board of Directors. A relative increase in the number of authorized
shares of common stock could have other effects on our shareholders, depending upon the exact nature and circumstances of any
actual issuances of authorized but unissued shares. A relative increase in our authorized shares could potentially deter takeovers,
including takeovers that our Board of Directors has determined are not in the best interest of our shareholders, in that additional
shares could be issued (within the limits imposed by applicable law) in one or more transactions that could make a change in control
or takeover more difficult. For example, we could issue additional shares so as to dilute the stock ownership or voting rights
of persons seeking to obtain control without our agreement. Similarly, the issuance of additional shares to certain persons allied
with our management could have the effect of making it more difficult to remove our current management by diluting the stock ownership
or voting rights of persons seeking to cause such removal. The reverse stock split therefore may have the effect of discouraging
unsolicited takeover attempts. By potentially discouraging initiation of any such unsolicited takeover attempts, the reverse stock
split may limit the opportunity for our shareholders to dispose of their shares at the higher price generally available in takeover
attempts or that may be available under a merger proposal. However, the Board of Directors is not aware of any attempt to take
control of our business and the Board of Directors has not considered the reverse stock split to be tool to be utilized as a type
of anti-takeover device.
Procedure
for Effecting Reverse Stock Split and Exchange of Stock Certificates, if Applicable
If
the Reverse Stock Split Proposal approved by the Company’s shareholders, and if at such time the Board of Directors still
believes that a reverse stock split is in the best interests of the Company and its shareholders, the Board will authorize the
Company to file the articles of amendment with the Virginia State Corporation Commission at such time as the Board of Directors
has determined the appropriate effective time for the reverse stock split. The Board of Directors may delay effecting the reverse
stock split without re-soliciting shareholder approval. The reverse stock split will become effective on the effective date (the
“Effective Date”) of the split. Beginning on the Effective Date, each certificate representing pre-split shares will
be deemed for all corporate purposes to evidence ownership of post-split shares.
As soon as practicable after the Effective Date, shareholders will be notified that the reverse stock split
has been effected. Shareholders who hold uncertificated shares as of the Effective Date (i.e., shares held in book-entry form
and not represented by a physical certificate), either as direct or beneficial owners, will have their holdings electronically
adjusted by our transfer agent through the DTCC’s Direct Registration System to give effect to the reverse stock split.
If your shares are held in “street name” through a broker, bank or other nominee, the number of shares you hold as
of the Effective Date will automatically be adjusted by your broker, bank or other nominee to reflect the reverse stock split.
The Company intends to treat shareholders holding shares of our common stock in “street name”) in the same manner
as shareholders of record whose shares of common stock are registered in their names. “Street name” holders should
contact their broker, bank or other nominee for more information.
Some shareholders hold their shares of
common stock in certificate form or a combination of certificate and book-entry form. We expect that our transfer agent will act
as exchange agent for purposes of implementing the exchange of stock certificates, if applicable. If you are a shareholder holding
pre-split shares in certificate form, you will receive a transmittal letter from the Company’s exchange agent as soon as
practicable after the effective time of the reverse stock split. The transmittal letter will be accompanied by instructions specifying
how you can exchange your certificate representing the pre-split shares of our common stock for a statement of holding. When you
submit your certificate representing the pre-split shares of our common stock, your post-split shares of our common stock will
be held electronically in book-entry form in the Direct Registration System. This means that, instead of receiving a new stock
certificate, you will receive a statement of holding that indicates the number of post-split shares you own in book-entry form.
We will no longer issue physical stock certificates unless you make a specific request for a share certificate representing your
post-split ownership interest. Pursuant to applicable rules of The Nasdaq Stock Market, your old certificates representing pre-split
shares cannot be used for either transfers or deliveries made on The Nasdaq Stock Market; thus, you must exchange your old certificates
in order to effect transfers or deliveries of your post-split shares on The Nasdaq Stock Market.
SHAREHOLDERS SHOULD NOT DESTROY ANY STOCK
CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
Until surrendered as contemplated herein,
a shareholder’s old certificate(s) shall be deemed at and after the Effective Date to represent the number of full shares of
our common stock resulting from the reverse stock split. Until shareholders have returned their properly completed and duly executed
transmittal letter and surrendered their old certificates for exchange, shareholders will not be entitled to receive any other
distributions, if any, that may be declared and payable to holders of record following the reverse stock split.
Any shareholder whose old certificates
have been lost, destroyed or stolen will be entitled to a new certificate only after complying with the requirements that we and
the transfer agent customarily apply in connection with lost, stolen or destroyed certificates.
No service charges, brokerage commissions
or transfer taxes shall be required to be paid by any holder of any old certificate, except that if any new certificate is to be
issued in a name other than that in which the old certificates are registered, it will be a condition of such issuance that (1) the
person requesting such issuance must pay to us any applicable transfer taxes or establish to our satisfaction that such taxes have
been paid or are not payable, (2) the transfer complies with all applicable federal and state securities laws, and (3) the
surrendered certificate is properly endorsed and otherwise in proper form for transfer.
Accounting Matters
Our common stock has no par value. Accordingly,
the reverse stock split will not affect the amount reflected for our common stock on our balance sheet.
No Appraisal Rights
Under the Virginia Stock Corporation Act,
the Company’s shareholders will not be entitled to appraisal rights with respect to the reverse stock split, and we do not
intend to independently provide shareholders with any such right.
Material United States Federal Income
Tax Consequences of the Reverse Stock Split
The following discussion describes the
anticipated material United States Federal income tax consequences to “U.S. holders” (as defined below) of Company
common stock relating to the reverse stock split. This discussion is based on the Internal Revenue Code of 1986, as amended (the
“Code”), Treasury Regulations, judicial authorities, published positions of the Internal Revenue Service (“IRS”),
and other applicable authorities, all as currently in effect and all of which are subject to change or differing interpretations
(possibly with retroactive effect). We have not obtained a ruling from the IRS or an opinion of legal or tax counsel with respect
to the tax consequences of the reverse stock split. The following discussion is for informational purposes only and is not intended
as tax or legal advice. Each holder should seek advice based on the holder’s particular circumstances from an independent
tax advisor.
For purposes of this discussion, the term
“U.S. holder” means a beneficial owner of Company common stock that is for United States Federal income tax purposes:
|
(i)
|
an individual citizen or resident of the United States;
|
|
(ii)
|
a corporation (or other entity treated as a corporation for U.S. Federal income tax purposes) organized under the laws of the United States, any state, or the District of Columbia;
|
|
(iii)
|
an estate with income subject to United States Federal income tax regardless of its source; or
|
|
(iv)
|
a trust that (a) is subject to primary supervision by a United States court and for which United States persons control all substantial decisions or (b) has a valid election in effect under applicable Treasury Regulations to be treated as a United States person.
|
This discussion assumes a U.S. holder holds
Company common stock as a capital asset within the meaning of Code Section 1221. This discussion does not address all of the
tax consequences that may be relevant to a particular Company shareholder or to Company shareholders that are subject to special
treatment under income tax laws including, but not limited to, financial institutions, tax-exempt organizations, insurance companies,
regulated investment companies, real estate investment trusts, entities disregarded from their owners for tax purposes, persons
that are broker-dealers, traders in securities who elect the mark-to-market method of accounting for their securities, Company
shareholders holding their shares of Company common stock as part of a “straddle,” “hedge,” “conversion
transaction,” or other integrated transaction, or persons who hold their Company common stock through individual retirement
or other tax-deferred accounts. This discussion also does not address the tax consequences to the Company, or to Company shareholders
that own 5% or more of the Company’s common stock, are affiliates of Company, or are not U.S. holders. In addition, this
discussion does not address other United States Federal taxes (such as gift or estate taxes or alternative minimum taxes), the
tax consequences of the reverse stock split under state, local, or foreign tax laws or certain tax reporting requirements that
may be applicable with respect to the reverse stock split. No assurance can be given that the IRS would not assert, or that a court
would not sustain, a position contrary to any of the tax consequences set forth below.
If a partnership (or other entity treated
as a partnership for United States Federal income tax purposes) is a Company shareholder, the tax treatment of a partner in the
partnership, or any equity owner of such other entity will generally depend on the status of the person and the activities of the
partnership or other entity treated as a partnership for United States Federal income tax purposes.
Tax Consequences of the Reverse Stock
Split Generally
We believe the reverse stock split will
qualify as a “reorganization” under Section 368(a)(1)(E) of the Code. Accordingly, provided that the fair market
value of the post-reverse stock split shares is equal to the fair market value of the pre-reverse stock split shares surrendered
in the reverse stock split:
|
●
|
A U.S. holder will not recognize any gain or loss as a result of the reverse stock split.
|
|
●
|
A U.S. holder’s aggregate tax basis in its post-reverse stock split shares will be equal to the aggregate tax basis in the pre-reverse stock split shares exchanged therefor.
|
|
●
|
A U.S. holder’s holding period for the post-reverse stock split shares will include the period during which such shareholder held the pre-reverse stock split shares surrendered in the reverse stock split.
|
|
●
|
For purposes of the above discussion of the basis and holding periods for shares of Company common stock, and except as provided therein, holders who acquired different blocks of Company common stock at different times must calculate their basis and holding periods separately for each identifiable block of such stock exchanged, converted, canceled or received in the reverse stock split.
|
As noted above, we will not issue fractional
shares in connection with the reverse stock split. Instead, shareholders who otherwise would be entitled to receive fractional
shares because they hold a number of shares not evenly divisible by the reverse stock split ratio will automatically be entitled
to receive an additional fraction of a share of common stock to round up to the next whole post-split share. The U.S. federal income
tax consequences of the receipt of such an additional fraction of a share of common stock is not clear. If the receipt of such
an additional fraction of a share of common stock is taxed as a dividend, however, any tax liability associated with such receipt
will be small.
Vote Required to Approve the Reverse
Stock Split Proposal
The Reverse Stock Split Proposal will be
approved only it receives the affirmative vote of at least a majority of the votes entitled to be cast at the Annual Meeting. Accordingly,
abstentions and broker non-votes, if any, will have the effect of a vote against the Reverse Stock Split Proposal.
WE RECOMMEND A VOTE “FOR”
THE PROPOSAL TO APPROVE THE ARTICLES OF AMENDMENTS TO OUR ARTICLES OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT OF OUR COMMON
STOCK, NO PAR VALUE PER SHARE, AT A RATIO OF UP TO ONE-FOR-FIVE, such
ratio to be determined in the discretion of the Company’s Board of Directors.
PROPOSAL 5: THE ADJOURNMENT OF THE ANNUAL
MEETING
Our shareholders are being asked to consider
and vote upon an adjournment of the Annual Meeting, if necessary, to solicit additional proxies if there are not sufficient votes
in favor of approval of a proposed amendment to our Articles of Incorporation to effectuate a reverse stock split as described
in Proposal 4.
Adjournment of the Annual Meeting will
be approved if the votes cast “For” the adjournment exceed the votes cast “Against” the adjournment. Abstentions
and broker non-votes, if any, will not affect the outcome of the vote on this matter.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
TO APPROVE THE ADJOURNMENT OF THE ANNUAL MEETING TO SOLICIT ADDITIONAL PROXIES IF THERE ARE NOT SUFFICIENT VOTES TO APPROVE PROPOSAL
4, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF THE ADJOURNMENT UNLESS A SHAREHOLDER HAS INDICATED OTHERWISE ON
THE PROXY.
BOARD OF DIRECTORS, CORPORATE GOVERNANCE
AND OTHER RELATED INFORMATION
What if a nominee is unwilling or unable
to serve?
Each of the nominees listed in the Proxy
Statement has agreed to serve as a director, if elected. If for some unforeseen reason a nominee becomes unwilling or unable to
serve, proxies will be voted for a substitute nominee selected by the Board of Directors.
How are directors compensated?
Non-employee directors are entitled to
receive $5,000 per quarter. From time to time we may issue securities to our directors as well in compensation for services, but
the amount and frequency of such grants is not set. In addition, non-employee directors are entitled to receive compensation for
their actual travel expenses for each Board of Directors meeting attended.
How does the Board determine which directors are independent?
The Board of Directors reviews the independence
of each director yearly. During this review, the Board of Directors considers transactions and relationships between each director
(and his or her immediate family and affiliates) and the Company and its management to determine whether any such relationships
or transactions are inconsistent with a determination that the director is independent in light of applicable law, listing standards
and the Company’s director independence standards. The Company believes that it maintains a majority of independent directors
who are deemed to be independent under the definition of independence provided by NASDAQ Listing Rule 5605(a)(2).
What role does the Corporate Governance Committee play in
selecting nominees to the Board of Directors?
Two of the primary purposes of the Board’s
Corporate Governance Committee are (i) to develop and implement policies and procedures that are intended to ensure that the Board
of Directors will be appropriately constituted and organized to meet its fiduciary obligations to the Company and its shareholders
and (ii) to identify individuals qualified to become members of the Board of Directors and to recommend to the Board of Directors
the director nominees for the annual meeting of shareholders. The Corporate Governance Committee is also responsible for considering
candidates for membership on the Board of Directors submitted by eligible shareholders. The Corporate Governance Committee’s
charter is available on the Company’s website at www.sino-global.com and in print upon request. The Corporate
Governance Committee of the Company’s Board of Directors was the only entity or person to nominate and/or recommend any of
the director nominees.
Are the members of the Corporate Governance Committee independent?
Yes. All members of the Corporate Governance Committee have
been determined to be independent by the Board of Directors.
How does the Corporate Governance Committee identify and
evaluate nominees for director?
The Corporate Governance Committee considers
candidates for nomination to the Board of Directors from a number of sources. Current members of the Board of Directors are considered
for re-election unless they have notified the Company that they do not wish to stand for re-election. The Corporate Governance
Committee also considers candidates recommended by current members of the Board of Directors, members of management or eligible
shareholders. From time to time the Board may engage a firm to assist in identifying potential candidates, although the Company
did not engage such a firm to identify any of the nominees for director proposed for election at the meeting.
The Corporate Governance Committee evaluates
all candidates for director, regardless of the person or firm recommending such candidate, on the basis of the length and quality
of their business experience, the applicability of such candidate’s experience to the Company and its business, the skills
and perspectives such candidate would bring to the Board of Directors and the personality or “fit” of such candidate
with existing members of the Board of Directors and management. The Corporate Governance Committee does not have a specific policy
in place with regard to the consideration of diversity when identifying director nominees; however, the Corporate Governance Committee
does consider diversity of opinion and experience when nominating directors.
What are the Corporate Governance Committee’s
policies and procedures for considering director candidates recommended by shareholders?
The Corporate Governance Committee will
consider all candidates recommended by eligible shareholders. An eligible shareholder is a shareholder (or group of shareholders)
who owns at least 5% of the Company’s outstanding shares and who has held such shares for at least one year as of the date
of the recommendation. A shareholder wishing to recommend a candidate must submit the following documents to the Secretary of the
Company at Sino-Global Shipping America, Ltd, 1044 Northern Boulevard, Suite 305, Roslyn, New York 11576-1514:
|
●
|
a
recommendation that identifies the name and address of the shareholder and the person
to be nominated;
|
|
●
|
documentation
establishing that the shareholder making the recommendation is an eligible shareholder;
|
|
●
|
the
written consent of the candidate to serve as a director of the Company, if elected;
|
|
●
|
a
description of all arrangements between the shareholders and such nominee pursuant to
which the nomination is to be made; and
|
|
●
|
such
other information regarding the nominee as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the SEC.
|
Upon timely receipt of the required documents,
the Company’s Secretary will determine whether the shareholder submitting the recommendation is an eligible shareholder based
on such documents. If the shareholder is an eligible shareholder, the Corporate Governance Committee may, but is not obligated
to, evaluate the candidate and consider such candidate for nomination to the Board of Directors.
If the candidate is to be evaluated by
the Corporate Governance Committee, the Secretary will request a detailed resume, an autobiographical statement explaining the
candidate’s interest in serving as a director of the Company, a completed statement regarding conflicts of interest, and
a waiver of liability for a background check from the candidate.
What are the minimum qualifications
required to serve on the Company’s Board of Directors?
All members of the Board of Directors must
possess the following minimum qualifications as determined by the Corporate Governance Committee:
|
●
|
A
director must demonstrate integrity, accountability, informed judgment, financial literacy,
creativity and vision;
|
|
●
|
A
director must be prepared to represent the best interests of all Company shareholders,
and not just one particular constituency;
|
|
●
|
A
director must have a record of professional accomplishment in his or her chosen field;
and
|
|
●
|
A
director must be prepared and able to participate fully in Board activities, including
membership on committees.
|
What other considerations does the Corporate
Governance Committee consider?
The Corporate Governance Committee believes
it is important to have directors from various backgrounds and professions in order to ensure that the Board of Directors has a
wealth of experiences to inform its decisions. Consistent with this philosophy, in addition to the minimum standards set forth
above, business and managerial experience and an understanding of financial statements and financial matters are very important.
How may shareholders communicate with
the members of the Board of Directors?
Shareholders and others who are interested
in communicating directly with members of the Board of Directors, including communication of concerns relating to accounting, internal
accounting controls or audit matters, or fraud or unethical behavior, may do so by writing to the directors at the following address:
Name of Director or Directors
c/o Zhikang Huang, Chief Operating Officer
Sino-Global Shipping America, Ltd
1044 Northern Boulevard, Suite 305
Roslyn, New York 11576-1514
Does the Company have a Code of Conduct?
The Company has adopted a Code of Conduct,
which is applicable to all directors, officers and associates of the Company, including the principal executive officer and the
principal financial and accounting officer. The complete text of the Code of Conduct is available on the Company’s website
at www.sino-global.com and is also available in print upon request. The Company intends to post any amendments to or waivers
from its Code of Conduct (to the extent applicable to the Company’s principal executive officer and principal financial and
accounting officer) at this location on its website.
What are the committees of the Board?
During fiscal year 2019, the Board of Directors
had standing Audit, Corporate Governance, and Compensation Committees. The members of each of the Committees, their principal functions
and the number of meetings held during the fiscal year ended June 30, 2019, are shown below.
How often did the Board and the Committees
meet in fiscal year 2019?
The Board of Directors met a total of 11
times, at regular meetings, during fiscal year 2019, and took corporate actions in unanimous written consent for 8 times. The Compensation
Committee met 1 time and took actions in unanimous written consents for 1 time, the Corporate Governance Committee met 3 times,
and the Audit Committee met 4 times during fiscal year 2019. Each incumbent director attended all of the meetings of the Board
of Directors and of the standing committees of which he was a member during fiscal year 2019. The Board invites, but does not require,
directors to attend the annual meeting of shareholders.
Compensation Committee
The members of the Compensation Committee
as of June 30, 2019, were:
Jianming Li
Tieliang Liu
Jing Wang, Chairman
The Compensation Committee’s charter
is available on the Company’s website at www.sino-global.com and in print upon request. The Compensation Committee’s
principal responsibilities include:
Making recommendations to the Board of
Directors concerning executive management organization matters generally;
In the area of compensation and benefits,
making recommendations to the Board of Directors concerning employees who are also directors of the Company, consult with the CEO
on matters relating to other executive officers, and make recommendations to the Board of Directors concerning policies and procedures
relating to executive officers; provided, however, that the Committee shall have full decision-making powers with respect to compensation
for executive officers to the extent such compensation is intended to be performance-based compensation within the meaning of Section
162(m) of the Internal Revenue Code;
Making recommendations to the Board of
Directors regarding all contracts of the Company with any officer for remuneration and benefits after termination of regular employment
of such officer;
Making recommendations to the Board of
Directors concerning policy matters relating to employee benefits and employee benefit plans, including incentive compensation
plans and equity based plans; and
Administering the Company’s formal
incentive compensation programs, including equity based plans.
The Compensation Committee may not delegate
its authority to other persons. Similarly, the Compensation Committee has not engaged a compensation consultant to assist in the
determination of executive compensation issues. While the Company’s executives will communicate with the Compensation Committee
regarding executive compensation issues, the Company’s executive officers do not participate in any executive compensation
decisions.
Audit Committee
The members of the Audit Committee as of
June 30, 2019, were:
Jianming Li
Tieliang Liu, Chairman
Jing Wang
The primary responsibility of the Audit
Committee is to assist the Board of Directors in monitoring the integrity of the Company’s financial statements and the independence
of its external auditors. The Company believes that each of the members of the Audit Committee is “independent” and
that Dr. Liu qualifies as an “audit committee financial expert” in accordance with applicable NASDAQ Capital Market
listing standards. In carrying out its responsibility, the Audit Committee undertakes to:
Review and recommend to the directors the
independent auditors to be selected to audit the financial statement of the Company;
Meet with the independent auditors and
management of the Company to review the scope of the proposed audit for the current year and the audit procedures to be utilized,
and at the conclusion thereof review such audit, including any comments or recommendations of the independent auditors;
Review with the independent auditors and
financial and accounting personnel the adequacy and effectiveness of the accounting and financial controls of the Company. The
Committee elicits recommendations for the improvement of such internal control procedures or particular areas where new or more
detailed controls or procedures are desirable. The Committee emphasizes the adequacy of such internal controls to expose any payments,
transactions, or procedures that might be deemed illegal or otherwise improper;
Review the internal accounting function
of the Company, the proposed audit plans for the coming year and the coordination of such plans with the Company’s independent
auditors;
Review the financial statements contained
in the annual report to shareholders with management and the independent auditors to determine that the independent auditors are
satisfied with the disclosure and contents of the financial statements to be presented to the shareholders;
Provide sufficient opportunity for the
independent auditors to meet with the members of the Committee without members of management present. Among the items discussed
in these meetings are the independent auditors’ evaluation of the Company’s financial, accounting, and auditing personnel,
and the cooperation that the independent auditors received during the course of the audit;
Review accounting and financial human resources
and succession planning within the Company;
Submit the minutes of all meetings of the
Audit Committee to, or discuss the matters discussed at each committee meeting with, the Board of Directors; and
Investigate any matter brought to its attention
within the scope of its duties, with the power to retain outside counsel for this purpose, if, in its judgment, that is appropriate.
The Audit Committee has established procedures
for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls and auditing matters,
including procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing
matters.
Corporate Governance Committee
The members of the Corporate Governance
Committee are:
Jianming Li
Tieliang Liu
Jing Wang
All members of the Corporate Governance
Committee are independent, as such term is defined by the NASDAQ Capital Market listing standards. The Corporate Governance Committee
undertakes to:
Identify individuals qualified to become
members of the Board of Directors and to make recommendations to the Board of Directors with respect to candidates for nomination
for election at the next annual meeting of shareholders or at such other times when candidates surface and, in connection therewith,
consider suggestions submitted by shareholders of the Company;
Determine and make recommendations to the
Board of Directors with respect to the criteria to be used for selecting new members of the Board of Directors;
Oversee the process of evaluation of the
performance of the Company’s Board of Directors and committees;
Make recommendations to the Board of Directors
concerning the membership of committees of the Board and the chairpersons of the respective committees;
Make recommendations to the Board of Directors
with respect to the remuneration paid and benefits provided to members of the Board in connection with their service on the Board
or on its committees; and
Evaluate Board and committee tenure policies
as well as policies covering the retirement or resignation of incumbent directors.
The Board of Directors has determined to
provide a process by which shareholders may communicate with the Board as a whole, a Board committee or individual director. Shareholders
wishing to communicate with the Board as a whole, a Board committee or an individual member may do so by sending a written communication
addressed to the Board of Directors of the Company or to the committee or to an individual director, c/o Zhikang Huang, Chief Operating
Officer, Sino-Global Shipping America, Ltd., 1044 Northern Boulevard, Suite 305, Roslyn, New York 11576-1514. All communications
will be compiled by the Secretary of the Company and submitted to the Board of Directors or the addressee not later than the next
regular Board meeting.
Management — Business History
of Named Executive Officers
For information as to the business history
of our Chief Executive Officer, Mr. Cao, and our Chief Operating Officer, Mr. Zhikang Huang, see the section “Proposal 1:
Election of Directors” elsewhere in this Proxy Statement. For information as to the business history of our Acting Chief
Financial Officer, Ms. Tuo Pan, please see the following paragraph.
Tuo Pan
Acting Chief Financial Officer
Age — 35
Our Acting Chief Financial Officer, Ms.
Pan, is a seasoned Certified Public Accountant licensed in Australia. Since 2008, Ms. Pan has overseen the finance and accounting
functions of Sino-Global Shipping Australia Pty Ltd. Ms. Pan received her bachelor’s degree in Accounting and Finance and
a master’s degree in Advance Accounting from the Curtin University of Technology in Western Australia. From August 2007 to
July 2008, Ms. Pan worked as an auditor and project manager of Baker Tilly China Ltd., and participated in various projects from
e-Future Information Technology Inc., TMC Education Corporation Ltd, China Ministry of Commerce, among others.
Employment Agreements With The Company’s
Named Executive Officers
Sino-Global has employment agreements with
each of Mr. Lei Cao, Ms. Tuo Pan and Mr. Zhikang Huang. These employment agreements provide for five-year terms that extend automatically
in the absence of termination provided at least 60 days prior to the anniversary date of the agreement. If we fail to provide this
notice or if we wish to terminate an employment agreement in the absence of cause, then we are obligated to provide at least 30
days’ prior notice. In such case during the initial term of the agreement, we would need to pay such executive (i) the remaining
salary through December 31, 2023, (ii) two times of the then applicable annual salary if there has been no Change in Control, as
defined in the employment agreements or three-and-half times of the then applicable annual salary if there is a Change in Control.
We are, however, permitted to terminate
an employee for cause without penalty to our company, where the employee has committed a crime or the employee’s actions
or inactions have resulted in a material adverse effect to us.
Summary Compensation Table
The following table shows the annual compensation
paid by us to Mr. Lei Cao, our Principal Executive Officer, Ms. Tuo Pan, our Acting Chief Financial Officer, and Mr. Zhikang Huang,
our Chief Operating Officer, for the years ended June 30, 2019 and 2018. No other officer had total compensation during either
of the previous two years of more than $100,000.
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
Securities-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
based
|
|
|
All other
|
|
|
|
|
Name
|
|
Year
|
|
Salary
|
|
|
Bonus
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Total
|
|
Lei Cao,
|
|
2019
|
|
$
|
180,000
|
(1)
|
|
|
-
|
|
|
$
|
308,000
|
|
|
|
-
|
|
|
$
|
796,000
|
|
Principal Executive Officer
|
|
2018
|
|
$
|
180,000
|
|
|
|
-
|
|
|
$
|
345,000
|
|
|
|
-
|
|
|
$
|
525,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tuo Pan,
|
|
2019
|
|
$
|
60,000
|
(2)
|
|
|
-
|
|
|
$
|
107,800
|
|
|
|
-
|
|
|
$
|
267,800
|
|
Acting Chief Financial Officer
|
|
2018
|
|
$
|
60,000
|
|
|
|
-
|
|
|
$
|
46,000
|
|
|
|
-
|
|
|
$
|
106,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zhikang Huang,
|
|
2019
|
|
$
|
100,000
|
(3)
|
|
|
-
|
|
|
$
|
138,600
|
|
|
|
-
|
|
|
$
|
238,600
|
|
Chief Operating Officer
|
|
2018
|
|
$
|
100,000
|
|
|
|
-
|
|
|
$
|
207,000
|
|
|
|
-
|
|
|
$
|
307,000
|
|
|
(1)
|
According to the Employment
Agreement dated January 1, 2019, Mr. Cao’s annual salary shall be $260,000, effective January 1, 2019. The executive reserves
his right for the remaining unpaid salary of $40,000 from January 1, 2019 to June 30, 2019 under such agreement.
|
|
(2)
|
According to the Employment
Agreement dated January 1, 2019, Ms. Pan’s annual salary shall be $100,000, effective January 1, 2019. The executive reserves
her right for the remaining unpaid salary of $20,000 from January 1, 2019 to June 30, 2019 under such agreement.
|
|
(3)
|
According to the Employment
Agreement dated January 1, 2019, Mr. Huang’s annual salary shall be $150,000, effective January 1, 2019. The executive reserves
his right for the remaining unpaid salary of $25,000 from January 1, 2019 to June 30, 2019 under such agreement.
|
Director Compensation (1)
Name
|
|
Fees earned or
paid in cash
($)
|
|
|
Stock
awards
($)
|
|
|
Option
awards
($)(2)
|
|
|
All other
compensation
($)
|
|
|
Total
($)
|
|
Tieliang Liu
|
|
|
20,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
20,000
|
|
Jing Wang
|
|
|
20,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
20,000
|
|
Ming Zhu(3)
|
|
|
10,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
10,000
|
|
Bradley A. Haneberg(4)
|
|
|
15,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
15,000
|
|
Jianming Li(5)
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
(1)
|
This table does not include Mr. Lei Cao, our Chief Executive Officer, because although Mr. Cao is a director and named executive officer, Mr. Cao’s compensation is fully reflected in the Summary Compensation Table.
|
(2)
|
We granted options to purchase 10,000 shares of our common stock to Mr. Jing Wang on May 20, 2008. We granted options to purchase 10,000 shares of our common stock to Mr. Tieliang Liu on January 31, 2013. No value is reflected for the awards in this table because the grant date fair value of all grants was reflected in the year of the applicable grant.
|
|
|
(3)
|
Mr. Zhu resigned from the Board on December 17, 2018.
|
|
|
(4)
|
Mr. Haneberg resigned from the Board on March 20, 2019.
|
|
|
(5)
|
Mr. Li was appointed a director of the Company on March 20, 2019 with an effective date of March 25, 2019.
|
The below table reflects, as of June 30,
2019, the number of shares of common stock authorized by our shareholders to be issued (directly or by way of issuance of securities
exercisable for or convertible into) as incentive compensation to our officers, directors, employees and consultants.
Plan category
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
(a)
|
|
|
Weighted-average exercise price of outstanding options, warrants and rights
(b)
|
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(c)
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation plans under the 2008 Incentive Plan approved by security holders
|
|
|
10,000
|
|
|
$
|
2.01
|
|
|
|
238,903
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation plans under the 2014 Incentive Plan approved by security holders
|
|
|
75,000
|
|
|
$
|
1.10
|
|
|
|
6,220,000
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation plans not approved by security holders
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
(1)
|
Pursuant to our 2008 Incentive Plan, we are authorized to issue options to purchase 302,903 shares of our common stock. The 10,000 outstanding options disclosed in the above table are taken from the 2008 Incentive Plan. Pursuant to our 2014 Incentive Plan, we are authorized to issue, in the aggregate, 10,000,000 shares of common stock or other securities convertible or exercisable for common stock. We have granted options to purchase an aggregate of 150,000 shares of common stock under the 2014 Incentive Plan in July 2016, among which, options to purchase 75,000 shares of common stock have been exercised. In addition, we have issued, in the aggregate, 600,000 shares of common stock to consultants to our Company in 2014, 660,000 shares of common stock to our officers and directors in 2016, 660,000 shares of common stock to our officers and directors in 2018, 130,000 to three employees in 2017 and 1,580,000 shares of common stock to employees in 2018 under the 2014 Incentive Plan. Accordingly, we may issue options to purchase 238,903 shares under the 2008 Incentive Plan, and we may issue 6,220,000 shares of common stock or other securities convertible or exercisable for common stock under the 2014 Incentive Plan.
|
Outstanding Equity Awards of Named Executive Officers at
Fiscal Year-End
Option Awards (1)
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
incentive plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
Number of
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
|
securities
|
|
|
|
securities
|
|
|
|
securities
|
|
|
|
|
|
|
|
|
|
|
|
|
underlying
|
|
|
|
underlying
|
|
|
|
underlying
|
|
|
|
|
|
|
|
|
|
|
|
|
unexercised
|
|
|
|
unexercised
|
|
|
|
unexercised
|
|
|
|
Option
|
|
|
|
Option
|
|
|
|
|
options (#)
|
|
|
|
options (#)
|
|
|
|
unearned
|
|
|
|
exercise
|
|
|
|
expiration
|
|
Name
|
|
|
exercisable
|
|
|
|
unexercisable
|
|
|
|
options (#)
|
|
|
|
price ($)
|
|
|
|
date
|
|
(a)
|
|
|
(b)
|
|
|
|
(c)
|
|
|
|
(d)
|
|
|
|
(e)
|
|
|
|
(f)
|
|
Lei Cao,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Executive Officer
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tuo Pan,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acting Chief Financial Officer
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zhikang Huang,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Operating Officer
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
(1)
|
Our Company has made stock awards to executive officers.
The details are laid out under the beneficial ownership table herein. We have excluded the following columns from this table:
(g) Number of shares or units of stock that have not vested (#); (h) Market value of shares of units of stock that have not vested
($); (i) Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#); and (j) Equity
incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($).
|
Audit Committee Report And Fees Paid to Independent Registered
Public Accounting Firm
Audit Committee Report
The Audit Committee oversees the Company’s
financial reporting process on behalf of the Board. The Audit Committee operates under a written charter approved by the Board.
The charter provides, among other things, that the Audit Committee has full authority to engage the independent auditor. In discharging
its oversight responsibilities regarding the audit process, the Audit Committee:
|
●
|
reviewed and discussed the audited financial statements with management;
|
|
●
|
discussed with the independent auditors the matters required to be discussed by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T;
|
|
●
|
received the written disclosures and the letter from the independent auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, and discussed with the independent accountant the independent accountant’s independence; and
|
|
●
|
based on the review and discussions referred to above, recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2019, as filed with the Securities and Exchange Commission.
|
Respectfully submitted,
The Audit Committee of the Board
/s/ Tieliang Liu, Chairman of the Audit Committee
/s/ Jing Wang, Member of the Audit Committee
/s/ Jianming Li, Member of the Audit Committee
The foregoing Audit Committee Report
does not constitute soliciting material or to be “filed” with the Commission or subject to Regulation 14A or 14C (17
CFR 240.14a-1 through 240.14b-2 or 240.14c-1 through 240.14c-101), other than as provided in Item 407 of Regulation S-K, or to
the liabilities of section 18 of the Exchange Act (15 U.S.C. 78r) and shall not be deemed filed or incorporated by reference into
any other filing of our company under the Securities Act or the Exchange Act, except to the extent we specifically incorporate
this Audit Committee Report by reference therein.
Who served on the Audit Committee of the Board of Directors?
The members of the Audit Committee as of
June 30, 2019 were Jianming Li, Tieliang Liu and Jing Wang. Each member of the Audit Committee is independent under the rules of
the SEC and the NASDAQ Capital Market. The Board of Directors has determined that Mr. Liu, who is an independent director, is an
“audit committee financial expert” as such term is defined in Item 401(h)(2) of Regulation S-K promulgated under the
Exchange Act.
What document governs the activities of the Audit Committee?
The Audit Committee acts under a written
charter, which sets forth its responsibilities and duties, as well as requirements for the Audit Committee’s composition
and meetings. The Audit Committee Charter is available on the Company’s website at www.sino-global.com under
Investor Relations.
How does the Audit Committee conduct its meetings?
During fiscal year 2019, the Audit Committee
met with the senior members of the Company’s financial management team and the Company’s independent registered public
accounting firm. The Audit Committee’s agenda was established by the Chairman. At each meeting, the Audit Committee reviewed
and discussed various financial and regulatory issues. The Audit Committee also had private, separate sessions from time to time
with representatives of Friedman LLP and the Company’s Controller, at which meetings candid discussions of financial management,
accounting and internal control issues took place.
Does the Audit Committee review the periodic reports and
other public financial disclosures of the Company?
The Audit Committee reviews each of the
Company’s quarterly and annual reports, including Management’s Discussion of Results of Operations and Financial Condition.
As part of this review, the Audit Committee discusses the reports with the Company’s management and considers those required
communication and audit report prepared by the independent registered public accounting firm about the Company’s SEC filings,
as well as related matters such as the quality (and not just the acceptability) of the Company’s accounting principles, alternative
methods of accounting under generally accepted accounting principles and the preferences of the independent registered public accounting
firm in this regard, the Company’s critical accounting policies and the clarity and completeness of the Company’s financial
and other disclosures.
What is the role of the Audit Committee in connection with
the financial statements and controls of the Company?
Management of the Company has primary responsibility
for the consolidated financial statements and internal control over financial reporting. The independent registered public accounting
firm has responsibility for the audit of the Company’s consolidated financial statements. The responsibility of the Audit
Committee is to oversee financial and control matters, among other responsibilities fulfilled by the Committee under its charter.
The Committee meets regularly with the Company’s independent registered public accounting firm, without the presence of management,
to ensure candid and constructive discussions about the Company’s compliance with accounting standards and best practices
among public companies comparable in size and scope to the Company. The Audit Committee also regularly reviews with its outside
advisors material developments in the law and accounting literature that may be pertinent to the Company’s financial reporting
practices.
What has the Audit Committee done with
regard to the Company’s audited financial statements for fiscal year 2019?
The Audit Committee has:
reviewed and discussed the audited consolidated
financial statements with the Company’s management; and discussed with Friedman LLP, independent registered public accounting
firm for the Company, the matters required to be discussed by the Public Company Accounting Oversight Board Auditing Standard
No. 16.
Has the Audit Committee considered the
independence of the Company’s auditors?
The Audit Committee has received from Friedman
LLP the written disclosures and the letter required to be provided to Audit Committees, and the Audit Committee has discussed with
Friedman LLP its independence. The Audit Committee has concluded that Friedman LLP is independent from the Company and its management.
Has the Audit Committee made a recommendation
regarding the audited financial statements for fiscal year 2019?
Based upon its review and the discussions
with management and the Company’s independent registered public accounting firm, the Audit Committee recommended to the Board
of Directors that the audited consolidated financial statements for the Company be included in the Company’s Annual Report
on Form 10-K for fiscal year 2019.
Has the Audit Committee reviewed the
fees paid to the independent registered public accounting firm during fiscal year 2019?
The Audit Committee has reviewed and discussed
the fees paid to Friedman LLP during 2019 for audit, audit-related, tax and other services, which are set forth below under “Fees
Paid to Independent Registered Public Accounting Firm.” The Audit Committee has determined that the provision of non-audit
services is compatible with Friedman LLP’s independence.
What is the Company’s policy regarding
the retention of the Company’s auditors?
The Audit Committee has adopted a policy
regarding the retention of the independent registered public accounting firm that requires pre-approval of all services by the
Audit Committee.
Fees Paid to Independent Registered
Public Accounting Firm
Audit Fees
During fiscal years of 2019 and 2018, Friedman
LLP’s fees for the annual audit of our financial statements and the quarterly reviews of the financial statements included
in periodic reports were $232,000 and $206,000, respectively.
Audit-Related Fees
None.
Tax Fees
Tax fees related to tax return preparation
amounted to $29,925 and $28,350 during fiscal years of 2019 and 2018, respectively.
All Other Fees
None.
Audit Committee Pre-Approval Policies
Before Friedman LLP was engaged by the
Company to render audit or non-audit services, the engagement was approved by the Company’s audit committee. All services
rendered by Friedman LLP have been so approved.
Beneficial Ownership Of Common Stock
This table below reflects the ownership
of our common stock by officers, directors and holders of more than five percent of our common stock as of November 29, 2019. Each
shareholder’s percentage ownership is based on [ ] shares issued and outstanding as of November 29, 2019.
Beneficial ownership is determined in accordance
with the rules and regulations of the SEC and includes voting or investment power with respect to our common stock. Shares of our
common stock subject to options or warrants that are exercisable or exercisable within 60 days of the date of this prospectus are
considered outstanding and beneficially owned by the person holding the options or warrants for the purposes of calculating the
percentage ownership of that person but not for the purpose of calculating the percentage ownership of any other person. Except
as disclosed in the footnotes to this table and subject to applicable community property laws, we believe that each shareholder
identified in the table possesses sole voting and investment power over all shares of common stock shown as beneficially owned
by the shareholder.
The below table reflects the ownership
of our common stock by officers, directors and holders of more than five percent of our common stock. Percentages are based on
[ ] shares issued and outstanding as of November 29, 2019.
Name and Address
|
|
Title of
Class
|
|
Amount of
Beneficial
Ownership
|
|
|
Percentage
Ownership
|
|
Mr. Lei Cao (1)(2)
|
|
Common
|
|
|
2,105,040
|
|
|
|
|
%
|
Ms. Tuo Pan (1)
|
|
Common
|
|
|
195,000
|
|
|
|
|
%
|
Mr. Zhikang Huang (1)
|
|
Common
|
|
|
440,000
|
|
|
|
|
%
|
Mr. Jing Wang (1)(3)
|
|
Common
|
|
|
130,000
|
|
|
|
*
|
|
Mr. Liu Tieliang (1)(4)
|
|
Common
|
|
|
130,000
|
|
|
|
*
|
|
Mr. Yafei Li (1)
|
|
Common
|
|
|
119,000
|
|
|
|
*
|
|
Mr. Jianming Li
|
|
Common
|
|
|
-
|
|
|
|
-
|
|
Total Officers and Directors (7 individuals)
|
|
Common
|
|
|
3,119,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Five Percent Shareholders
|
|
|
|
|
|
|
|
|
|
|
Mr. Zhong Zhang (5)
|
|
Common
|
|
|
1,200,000
|
|
|
|
|
%
|
(1)
|
The individual’s address is c/o Sino-Global Shipping America, Ltd., 1044 Northern Boulevard, Roslyn, New York 11576-1514.
|
|
|
(2)
|
Mr. Cao has received options to purchase 36,000 shares of the Company’s common stock, all of which underlying shares are reflected in this table because they have fully vested.
|
|
|
(3)
|
Mr. Wang has received options to purchase 10,000 shares of the Company’s common stock, all of which underlying shares are reflected in this table because they have fully vested.
|
|
|
(4)
|
Mr. Liu has received options to purchase 10,000 shares of the Company’s common stock, 8,000 of which have fully vested.
|
|
|
(5)
|
Mr. Zhang’s address is care of Tianjin Zhiyuan Investment Group Co., Ltd, 10th Floor, Tianwu Huaqing Building, No.22, Jinrong Road, Dasi Industrial Park, Xiqing District Economic Development Zone, Tianjin City, P.R. China, 300385.
|
Compensation Committee Interlocks and Insider Participation
None of the members of the Board of Directors
who served on the Compensation Committee during the fiscal year ended June 30, 2019 were officers or employees of the Company or
any of its subsidiaries or had any relationship with the Company requiring disclosure under SEC regulations.
Compliance with Section 16(a) Beneficial Ownership Reporting
Requirements
Section 16(a) of the Exchange Act requires
that our executive officers and directors, and persons who own more than ten percent of a registered class of our equity securities,
file reports of ownership and changes in ownership with the SEC. Executive officers, directors and greater-than-ten percent stockholders
are required by SEC regulations to furnish us with all Section 16(a) forms they file. Based solely on our review of the copies
of the forms received by us and written representations from certain reporting persons that they have complied with the relevant
filing requirements, we believe that, during the year ended June 30, 2019, all of our executive officers, directors and greater-than-ten
percent stockholders complied with all Section 16(a) filing requirements, except that, due to administrative error, the following
form was filed late:
|
●
|
Mr. Jing Wang filed a Form 4 on January 8, 2019 to report transactions that occurred on December 31, 2019.
|
|
●
|
Mr. Huang Zhi Kang filed a Form 4 on January 8, 2019 to report transactions that occurred on December 31, 2019.
|
|
●
|
Mr. Liu Tieliang filed a Form 4 on January 8, 2019 to report transactions that occurred on December 31, 2019.
|
|
●
|
Ms. Pan Tuo filed a Form 4 on January 8, 2019 to report transactions that occurred on December 31, 2019.
|
|
●
|
Mr. Li Yafei filed a Form 4 on January 8, 2019 to report transactions that occurred on December 31, 2019.
|
|
●
|
Mr. Cao Lei filed a Form 4 on January 8, 2019 to report transactions that occurred on December 31, 2019.
|
|
●
|
Mr. Li Jianming had not filed a Form 3 following his appointment as a director of the Company until October 3, 2019.
|
Availability of Form 10-K and Annual Report to Shareholders
Rules promulgated by the SEC require us to provide an Annual
Report to Shareholders who receive this Proxy Statement. We will also provide copies of the Annual Report to brokers, dealers,
banks, voting trustees and their nominees for the benefit of their beneficial owners of record. Additional copies of the Annual
Report on Form 10-K for the fiscal year ended June 30, 2019 (without exhibits or documents incorporated by reference), are available
without charge to shareholders upon written request to Secretary, Sino-Global Shipping America, Ltd., 1044 Northern Boulevard,
Suite 305, Roslyn, New York 11576-1514, by calling (718) 888-1814 or via the Internet at www.sino-global.com.
Shareholder Proposals
To be considered for inclusion in next
year’s Proxy Statement or considered at next year’s annual meeting but not included in the Proxy Statement, shareholder
proposals must be submitted in writing by December 27, 2020. All written proposals should be submitted to: Zhikang Huang, Chief
Operating Officer, Sino-Global Shipping America, Ltd., 1044 Northern Boulevard, Suite 305, Roslyn, New York 11576-1514.
Other Proposed Actions
If any other items or matters properly
come before the meeting, the proxies received will be voted on those items or matters in accordance with the discretion of the
proxy holders.
Solicitation by Board; Expenses of Solicitation
Our Board of Directors has sent you this
Proxy Statement. Our directors, officers and associates may solicit proxies by telephone or in person. We will also reimburse
the expenses of brokers, nominees and fiduciaries that send proxies and proxy materials to our shareholders.
APPENDIX A
ARTICLES OF
AMENDMENT
TO
THE AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
SINO-GLOBAL SHIPPING AMERICA, LTD.
The
undersigned, on behalf of the corporation set forth below, pursuant to Title 13.1, Chapter 9, Article 11 of the Code
of Virginia, states as follows:
|
1.
|
The name of the corporation is Sino-Global Shipping
America, Ltd (the “Corporation”).
|
|
2.
|
The Corporation’s Articles of Incorporation
are amended as follows:
|
The following is hereby added
to the end of the first paragraph of Section 1 of Article III:
As of
12:01 a.m., Eastern Time, on [ ] (the “Effective Time”), a reverse stock split (“Reverse Stock Split”)
will occur, as a result of which each [ * ] (__) shares of issued and outstanding Common Stock of the Corporation (“Old
Common Stock”) shall automatically, without further action on the part of the Corporation or any holder of such Common Stock,
be reconstituted, combined and converted into one (1) share of the Corporation’s Common Stock (“New Common Stock”).
The Corporation will not issue fractional shares. The number of shares to be issued to each holder will be rounded up to the nearest
whole number if, as a result of the Reverse Stock Split, the number of shares owned by any holder would not be a whole number.
From and after the Effective Time, certificates representing Old Common Stock shall confer no right upon the holders thereof other
than the right to exchange them for certificates representing New Common Stock pursuant to the provisions hereof.
The remainder of
Article III is not changed by this amendment.
|
3.
|
The foregoing amendment was adopted on [ ].
|
|
4.
|
This amendment has been approved and recommended by
unanimous consent of the Board of Directors of the Corporation.
|
|
5.
|
The amendment was proposed by the Board of Directors
and submitted to the holders of the Corporation’s voting Common Stock, the only class of voting capital stock outstanding,
in accordance with the provisions of Title 13.1, Chapter 9 of the Code of Virginia, and:
|
|
(a)
|
The number of shares outstanding on the record date,
the number of votes entitled to be cast on the proposed amendment and the number of votes cast for and against the amendment were
as follows:
|
Number of shares outstanding:
|
|
|
Number of votes entitled to be cast:
|
|
|
Number of votes for:
|
|
|
Number of votes against:
|
|
|
|
(b)
|
The total number of votes cast for the amendment was sufficient for approval of the amendment.
|
|
6.
|
The Articles of Amendment to be issued as a result
of the filing of these Articles of Amendment shall become effective as of 12:01 a.m., Eastern Time, on [ ],
in accordance with Section 13.1-606 of the Virginia Stock Corporation Act.
|
[Signature follows on next page]
IN WITNESS WHEREOF, Sino-Global
Shipping America, Ltd. has caused these Articles of Amendment to the Amended and Restated Articles of Incorporation to be signed
by a duly authorized officer of the Corporation.
Dated: [ ]
|
SINO-GLOBAL SHIPPING AMERICA, LTD.
|
|
|
|
|
By:
|
|
|
Name:
|
Lei Cao
|
|
Title:
|
Chief Executive Officer
|
Appendix
B
Sino Global Shipping Ame... (NASDAQ:SINO)
Historical Stock Chart
From Aug 2024 to Sep 2024
Sino Global Shipping Ame... (NASDAQ:SINO)
Historical Stock Chart
From Sep 2023 to Sep 2024