Proxy Statement – Form DEF 14A
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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☒ Definitive Proxy Statement
☐ Definitive Additional Materials
☐ Soliciting Material under § 240.14a-12
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
Dear Focus Universal Shareholders,
The 2024 Annual Meeting of Shareholders (the "Annual Meeting") of
| 1. | To elect five (5) members to the Board of Directors of the Company to serve until the 2025 Annual Meeting of Shareholders; |
| 2. | To ratify the selection of |
| 3. | To approve, subject to the Board of Directors' discretion to adopt, an amendment to our Articles of Incorporation to increase the number of authorized shares of our common stock, |
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| 4. | To transact such other business as may properly come before the meeting or any adjournment or postponements thereof. |
The Board of Directors of the Company has fixed the close of business on
YOUR VOTE IS VERY IMPORTANT. YOU MAY VOTE BY MAIL, THROUGH THE INTERNET, BY TELEPHONE OR BY ATTENDING THE ANNUAL MEETING AND VOTING BY BALLOT, ALL AS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT.
The accompanying proxy statement provides a detailed description of the Proposals. We urge you to read the accompanying proxy statement, including the annex, carefully and in their entirety. If you have any questions concerning the Proposals or the accompanying proxy statement of which this notice forms a part, would like additional copies of the accompanying proxy statement, please contact Secretary,
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON
Whether or not you plan to attend the Annual Meeting, please sign, date and retuthe enclosed proxy card in the prepaid envelope provided, as soon as possible, so your shares can be voted at the meeting in accordance with your instructions. If you prefer, you may instead vote electronically through the internet or by telephone. The instructions on your proxy card describe how to use these convenient services. Your vote is important no matter how many shares you own. If you plan to attend the Annual Meeting and wish to vote your shares personally, you may do so at any time before your proxy is voted. The Company asks that shareholders planning to attend the Annual Meeting notify the Company at least 48 hours in advance of the meeting by calling (626) 272-3883. Your prompt cooperation is greatly appreciated.
All shareholders as of the Record Date are cordially invited to attend the Annual Meeting.
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Admission to Annual Meeting
Attendance at the Annual Meeting is limited to shareholders of the Company as of the Record Date. For safety and security reasons, video and audio recording devices and other electronic devices will not be allowed in the meeting. If your shares are held in the name of your bank, brokerage firm or other nominee, you must bring to the Annual Meeting a copy of your proxy card, an account statement, or a letter from the nominee indicating that you beneficially owned the shares as of the Record Date for voting. If you do not have proof of share ownership, you will not be admitted to the Annual Meeting.
For registered shareholders, a copy of your proxy card can serve as verification of stock ownership. Shareholders who do not present a copy of their proxy card at the Annual Meeting will be admitted only upon verification of stock ownership, as indicated herein. If you do not have proof of share ownership, you will not be admitted to the Annual Meeting. In addition, all Annual Meeting attendees will be asked to present valid government-issued photo identification, such as a driver's license or passport, as proof of identification before entering the Annual Meeting, and attendees may be subject to security inspections.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Desheng Wang
Chief Executive Officer and Secretary
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TABLE OF CONTENTS
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PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
INTRODUCTION
This proxy statement is furnished in connection with the solicitation by the Board of Directors (the "Board") of
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
The following are some questions that you, as a shareholder of the Company, may have regarding the Annual Meeting, together with brief answers to those questions. We urge you to read carefully the remainder of this Proxy Statement, including the annex and other documents referred to in this Proxy Statement, because the information in this section may not provide all of the information that might be important to you with respect to the Annual Meeting.
| Q: |
Why am I receiving these materials? |
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| A: | The Company is sending these materials to its shareholders to help them decide how to vote their shares of Common Stock with respect to the Proposals to be considered at the Annual Meeting of the Company's shareholders to be held on |
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| Q: |
When and where will the Annual Meeting take place? |
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| A: |
The Annual Meeting will be held on |
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| Q: |
Who can attend and vote at the Annual Meeting? |
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| A: |
The Company's shareholders of record as of the close of business on If your shares are held in the name of your bank, brokerage firm or other nominee, you must bring to the Annual Meeting a copy of your proxy card, an account statement, or a letter from the nominee indicating that you beneficially owned the shares as of the Record Date for voting. If you do not have proof of share ownership, you will not be admitted to the Annual Meeting. For registered shareholders, a copy of your proxy card can serve as verification of stock ownership. Shareholders who do not present a copy of their proxy card at the Annual Meeting will be admitted only upon verification of stock ownership, as indicated herein. If you do not have proof of share ownership, you will not be admitted to the Annual Meeting. In addition, all Annual Meeting attendees will be asked to present valid government-issued photo identification, such as a driver's license or passport, as proof of identification before entering the Annual Meeting, and attendees may be subject to security inspections. |
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| Q: |
What will be voted on at the Annual Meeting? |
| A: | At the Annual Meeting, the shareholders will be asked: | |||
| · | To elect five (5) members to the Board to serve until the 2025 Annual Meeting of Shareholders (the "Election of Directors Proposal"); | |||
| · | To ratify the selection of |
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| · | To approve, subject to the Board's discretion to adopt, an amendment to our Articles of Incorporation to increase the number of authorized shares of our common stock ("Common Stock"), |
| Collectively, the Election of Directors Proposal, Auditor Ratification Proposal, and Share Increase Proposal is referred to in this Proxy Statement as, the "Proposals." |
| Q: |
What do I need to do now and how do I vote? |
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| A: |
The Company urges you to read this proxy statement carefully, including the annex, and to consider how the Proposals described in this proxy statement may affect you and the Company as a whole. To vote, you may provide your proxy instructions in three different ways. First, you can mail your signed proxy card in the enclosed retuenvelope. Alternatively, you can provide your proxy instructions by calling the toll-free call center set up for this purpose indicated on the enclosed proxy card and following the instructions provided. Please have your proxy card available when you call. Finally, you can provide your proxy instructions over the Internet by accessing the website indicated on the enclosed proxy card and following the instructions provided. Please have your proxy card available when you access the web page. Please provide your proxy instructions only once and as soon as possible so that your shares can be voted at the Annual Meeting. |
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| Q: |
What vote is required to approve each Proposal? |
| A: | The following votes are required to approve the Proposals: | |||
| · | A plurality vote of the holders of the shares of Common Stock represented in person or by proxy and voting at the Annual Meeting, a quorum being present, is required for the Election of Directors Proposal. | |||
| · | The affirmative vote of the holders of a majority of the shares of Common Stock represented in person or by proxy and voting at the Annual Meeting is necessary for the approval of the Auditor Ratification Proposal. | |||
| · | The affirmative vote of the holders of a majority of the shares of Common Stock represented in person or by proxy and voting at the Annual Meeting is necessary for the approval of the Share Increase Proposal. |
| Q: |
Will any other business be presented for action by shareholders at the Annual Meeting? |
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| A: | Management knows of no business that will be presented at the Annual Meeting other than the Proposals. If any other matter properly comes before the Annual Meeting, the persons named as proxies in the proxy card intend to vote the proxies (which confer discretionary authority to vote on such matters) in accordance with their judgment on the matter. |
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| Q: |
How does the Company's Board of Directors recommend that the Company's shareholders vote with respect to the Proposals? |
| A: | The Company's Board of Directors, which we refer to as the "Board," recommends that the Company's shareholders vote: | |||
| · | "FOR" the Election of Directors Proposal; | |||
| · | "FOR" the Auditor Ratification Proposal; and | |||
| · | "FOR" Share Increase Proposal. |
| Q: |
Why does the Board of Directors recommend approval of the Share Increase Proposal? |
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| A: | The Board believes that the Share Increase Proposal is in the Company's best interest because it increases the number of shares of authorized Common Stock by an amount that would provide the Company with flexibility as the need to issue shares of Common Stock may arise in the future for various corporate purposes, including but not limited to, raising capital, strategic transactions, including mergers, acquisitions, strategic partnerships, joint ventures, divestitures, business combinations, stock splits and stock dividends, as well as other general corporate transactions, and providing equity incentive grants under employee stock plans. | |
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Where can I find the voting results of the Annual Meeting? |
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| A: | The Company intends to announce preliminary voting results at the Annual Meeting and publish final results in a Current Report on Form 8-K that will be filed with the |
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| Q: |
What happens if I do not retua proxy card or otherwise provide proxy instructions or if I elect to abstain from voting? |
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| A: |
If you do not submit a proxy card, provide proxy instructions by telephone or over the Internet or vote at the Annual Meeting, your shares will not be counted as present for the purpose of determining the presence of a quorum, which is required to transact business at the Annual Meeting. If you sign, date and mail your proxy card without indicating how you wish to vote, your proxy will be counted as present for the purpose of determining the presence of a quorum for the Annual Meeting and all of your shares will be voted "FOR" the Proposals. However, if you submit a proxy card or provide proxy instructions by telephone or over the Internet and affirmatively elect to abstain from voting, your proxy will be counted as present for the purpose of determining the presence of a quorum for the Annual Meeting and your abstention will have the same effect as a vote "AGAINST" the Auditor Ratification Proposal and the Share Increase Proposal. Abstentions and broker non-votes will have no effect on the election of directors. Abstentions will have the effect of a vote "AGAINST" the ratification of Abstentions will have the effect of a vote "AGAINST" the approval of the Share Increase Proposal and broker non-votes will have no effect on the outcome of the vote. |
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| Q: |
If my shares are held in "street name" by a broker or other nominee, will my broker or nominee vote my shares for me? |
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| A: |
If a shareholder is not the record holder, such as where the shares are held through a broker, bank or other financial institution, the shareholder must provide voting instructions to the record holder of the shares in accordance with the record holder's requirements in order to ensure the shares are properly voted. Your broker will not be permitted to vote on your behalf unless you provide specific instructions by completing and returning the voting instruction form or following the instructions provided to you to vote your shares. For your vote to be counted, you now will need to communicate your voting decisions to your broker, bank or other financial institution before the date of the shareholders meeting. If you hold shares through an account with a broker, bank or other nominee, and you fail to provide voting instructions to your broker, bank or other nominee either using your voting instruction card or by telephone or over the Internet, in accordance with the instructions provided, then your shares will not be voted with respect to any of the proposals being considered at the Annual Meeting. Therefore, if you hold shares through a broker, bank or other nominee it is important that you provide your broker, bank or other nominee with your voting instructions. |
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| Q: |
May I vote in person? |
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| A: |
If you hold shares of Common Stock that are registered directly in your name with the Company's transfer agent, you are considered, with respect to those shares, the "shareholder of record," and the proxy materials and proxy card are being sent directly to you. If you are the shareholder of record, you may attend the Annual Meeting and vote your shares in person, rather than signing and returning your proxy card or otherwise providing proxy instructions by telephone or over the Internet. If your shares of Common Stock are held in a brokerage account or by another nominee, you are considered the beneficial owner of shares held in "street name," and these proxy materials are being forwarded to you together with a voting instruction card. As the beneficial owner, you are also invited to attend the Annual Meeting. However, since a beneficial owner is not the shareholder of record, you may not vote these shares in person at the Annual Meeting unless you obtain a "legal proxy" from the broker or other nominee that holds your shares giving you the right to vote the shares in person at the Annual Meeting. |
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| Q: |
May I revoke or change my vote after I have provided proxy instructions? |
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| A: | Yes. You may revoke or change your vote at any time before your proxy is voted at the Annual Meeting. You can do this in one of three ways. First, you can send a written notice to the Company stating that you would like to revoke your proxy. Second, you can submit new proxy instructions either on a new proxy card, by telephone or over the Internet, as and if applicable. Third, you can attend the Annual Meeting and vote in person as described above. Your attendance at the Annual Meeting will not, by itself, revoke your proxy. If you have instructed a broker or other nominee to vote your shares, you must follow directions received from your broker or other nominee to change those instructions. | |
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What constitutes a quorum? |
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Shareholders who hold a majority of the shares of Common Stock outstanding as of the close of business on the Record Date for the Annual Meeting must be present either in person or by proxy to constitute a quorum to conduct business at the Annual Meeting. Once a quorum is present, such quorum is not broken by the subsequent withdrawal of any shareholder. If there is no quorum, the holders of a majority of shares present at the meeting in person or by proxy may adjouthe meeting to a different date. |
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| Q: |
Who is paying for this proxy solicitation? |
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| A: | The Company will pay for the cost and expense of preparing, filing, assembling, printing and mailing this Proxy Statement, and any amendments thereto, the proxy card and any additional information furnished to the Company's shareholders. The Company may also choose to reimburse brokers, custodians, nominees and fiduciaries for their costs of soliciting and obtaining proxies from beneficial owners, including the costs of reimbursing brokers, custodians, nominees and fiduciaries for their costs of forwarding this proxy statement and other solicitation materials to beneficial owners. In addition, proxies may be solicited without extra compensation by directors, officers and employees of the Company by mail, telephone, fax or other methods of communication. | |
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Whom should I contact if I have any questions about the Proposals or the Annual Meeting? |
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| A: | Shareholders may contact our Secretary, Dr. |
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| Q: |
What information is available on the Internet? |
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| A: |
A copy of this Proxy Statement and our annual report on Form 10-K, as amended, for the fiscal year ended Our website address is www.focusuniversal.com. We use our website as a channel of distribution for important Company information. Important information, including press releases, analyst presentations and financial information regarding us is routinely posted and accessible on the Investors subpage of our website, which is accessible by clicking on the tab labeled "Investors" on our website home page. Visitors to our website can also register to receive automatic e-mail and other notifications alerting them when new information is made available on the Investors subpage of our website. In addition, we make available on the Investors subpage of our website (under the link "SEC Filings") free of charge our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, ownership reports on Forms 3 and 4 and any amendments to those reports, as soon as practicable after we electronically file such reports with the |
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THE ANNUAL MEETING
General
The Company is furnishing this Proxy Statement to its shareholders in connection with the solicitation of proxies by the
Date, Time, and Place
The Annual Meeting will be held on
Purpose of the Annual Meeting
At the Annual Meeting, and any adjournments or postponements thereof, the Company's shareholders will be asked to:
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elect five (5) members to the Board to serve until the 2025 Annual Meeting of Shareholders; |
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ratify the selection of |
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| · | to approve, subject to the Board's discretion to adopt, an amendment to our Articles of Incorporation to increase the number of authorized shares of our Common Stock from 75,000,000 shares to 150,000,000 shares. |
THE MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING ARE OF GREAT IMPORTANCE TO THE COMPANY'S SHAREHOLDERS. ACCORDINGLY, SHAREHOLDERS ARE URGED TO READ AND CAREFULLY CONSIDER THE INFORMATION PRESENTED IN THIS PROXY STATEMENT.
Recommendation of the Board
The Board, by a unanimous vote, recommends that the shareholders of the Company vote:
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"FOR" the Election of Directors Proposal, which is electing the five (5) nominees as members to the Board to serve until the 2025 Annual Meeting of Shareholders; |
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"FOR" the Auditor Ratification Proposal, which is a proposal to ratify the selection of |
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| · | "FOR" the Share Increase Proposal, which is a proposal to a approve an amendment to the Company's Articles of Incorporation to increase the total number of authorized shares of Common Stock from 75,000,000 shares to 150,000,000 shares. |
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Record Date; Shares Entitled to Vote
The Board has fixed
At the close of business on the Record Date, the Company had outstanding and entitled to vote 68,667,760 shares of Common Stock.
Holders of Common Stock are entitled to vote on all of the Proposals at the Annual Meeting. Each share of Common Stock outstanding on the Record Date entitles the holder thereof to one vote on each matter properly brought before the Annual Meeting, exercisable in person or by proxy. For each matter scheduled for a vote at the Annual Meeting, you may vote "For" or "Against" or you may "Abstain" from voting.
Quorum
To conduct the business described above at the Annual Meeting, the Company must have a quorum present. Shareholders who hold a majority of Common Stock outstanding as of the close of business on the Record Date for the Annual Meeting must be present either in person or by proxy to constitute a quorum to conduct business at the Annual Meeting.
Once a quorum is present, such quorum is not broken by the subsequent withdrawal of any shareholder. If there is no quorum, the holders of a majority of shares present at the meeting in person or by proxy may adjouthe meeting to a different date.
Required Vote
The Proposals being submitted for approval by the Company's shareholders at the Annual Meeting will be approved or rejected on the basis of certain specific voting thresholds. In particular:
| · | Election of Directors Proposal: The election of the Board's nominees to the Board at the 2024 Annual Meeting is expected to be an uncontested election. Our Bylaws (the "Bylaws") require that directors be elected by a plurality of the votes cast at any meeting of shareholders. A plurality means that the candidate with the most votes for his or her election, even if less than a majority of those cast, is elected to the Board. Shareholders are not permitted to vote against a candidate. For purposes of determining whether a quorum is present, votes cast include votes to "withhold" and exclude abstentions with respect to that director's election. Abstentions and broker non-votes will have no impact on this Proposal. |
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Auditor Ratification Proposal: This proposal will be ratified if votes representing a majority of the shares entitled to vote and represented at the meeting in person or by proxy vote in favor of the proposal. Therefore, abstentions will have the effect of a vote "AGAINST" the ratification of |
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Share Increase Proposal: This proposal will be approved if votes representing a majority of the shares entitled to vote and represented at the meeting in person or by proxy vote in favor of the proposal. Therefore, abstentions will have the effect of a vote "AGAINST" the approval to amend the Company's Articles of Incorporation to increase the total number of authorized shares of Common Stock from 75,000,000 shares to 150,000,000 shares. Broker non-votes will have no effect on the outcome of the vote. |
If you do not vote your shares as instructed in the enclosed proxy card, the effect will be a vote AGAINST the ratification of
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Counting of Votes; Treatment of Abstentions and Incomplete Proxies; Broker Non-Votes
Shareholder of Record: Shares Registered in Your Name
The transfer agent for the Common Stock is
If you are a shareholder of record, you may vote in person at the Annual Meeting, vote by proxy by telephone, vote by proxy over the Internet, or vote by completing and returning the enclosed proxy card. Whether or not you plan to attend the Annual Meeting, the Company urges you to vote by proxy to ensure that your vote is counted. You may still attend the Annual Meeting and vote in person even if you have already voted by proxy.
Shareholders of record at the close of business on
| · | in person by coming to the Annual Meeting and completing a ballot that you will receive when you arrive; |
| · | through the Internet by visiting a website established for that purpose at www.proxyvote.com and following the instructions; |
| · | by telephone by calling the toll-free number 1-800-690-6903 in |
| · | by returning the enclosed proxy card in the provided retuenvelope (which is postage paid if mailed in |
To vote via telephone or Internet, please have your proxy card in front of you. A phone number and an Internet website address is contained on your proxy card. Upon entering either the phone number or the Internet website address, you will be instructed on how to proceed.
If a shareholder does not submit a proxy card, provide proxy instructions by telephone or over the Internet or vote at the Annual Meeting, such shareholder's shares will not be counted as present for the purpose of determining the presence of a quorum, which is required to transact business at the Annual Meeting, and will have the same effect as a vote "AGAINST" the Auditor Ratification Proposal and the Share Increase Proposal.
If a shareholder signs, dates and mails a proxy card without indicating how such shareholder wishes to vote, such proxy card will be counted as present for the purpose of determining the presence of a quorum for the Annual Meeting and all of such shareholder's shares will be voted "FOR" each Proposal. However, if a shareholder submits a proxy card or provides proxy instructions by telephone or over the Internet and affirmatively elects to abstain from voting, such proxy will be counted as present for the purpose of determining the presence of a quorum for the Annual Meeting and the abstention will have the same effect as a vote "AGAINST" the Auditor Ratification Proposal and the Share Increase Proposal.
Beneficial Owner: Shares Registered in the
If, on the Record Date, your shares of Common Stock were held in an account at a broker, bank or other nominee, rather than in your name, then you are the beneficial owner of shares of Common Stock held in "street name" and a voting instruction card is being forwarded to you by that organization. The organization holding your account is considered to be the shareholder of record for purposes of voting at the Annual Meeting. Since you are not the shareholder of record, you may not vote your shares of Common Stock in person at the Annual Meeting unless you request and obtain a valid proxy from your broker or other agent.
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Simply follow the voting instructions in the voting instruction card to ensure your vote is counted. Alternatively, you may vote by telephone or over the Internet as instructed by your broker or bank. To vote in person at the Annual Meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a proxy form.
If you do not give instructions to your broker, your broker can vote your shares of Common Stock with respect to "discretionary" items, but not with respect to "non-discretionary" items. Non-discretionary matters include director elections and other matters like those involving a matter that may substantially affect the rights or privileges of shareholders, such as mergers, acquisitions, share issuances or shareholder proposals. On non-discretionary items for which you do not give your broker instructions, the shares will be treated as broker non-votes.
The Share Increase Proposal is a discretionary matter. Therefore, if you do not instruct your broker or other nominee on how to vote your shares then your broker or other nominee may vote your shares of Common Stock on the Share Increase Proposal and the Adjournment Proposal.
Counting Votes
Votes will be counted by the inspector of election appointed for the Annual Meeting, who will separately count "For," "Against," "Abstain" and broker non-votes.
Revoking Your Proxy
If you wish to change your vote with respect to any Proposal, you may do so by revoking your proxy at any time prior to the commencement of voting with respect to that Proposal at the Annual Meeting.
If you are the record holder of your shares, you can revoke your proxy by:
| · | sending a written notice stating that you would like to revoke your proxy to Dr. |
| · | submitting new proxy instructions with a later date either on a new proxy card, by telephone or over the Internet, as and if applicable; or |
| · | attending the Annual Meeting and voting in person (but note that your attendance alone will not revoke your proxy). |
If you are a shareholder of record, revocation of your proxy or voting instructions by written notice must be received by
Solicitation of Proxies
The Company will pay for the cost and expense of preparing, filing, assembling, printing and mailing this Proxy Statement, any amendments thereto, the proxy card and any additional information furnished to the Company's shareholders. The Company may also choose to reimburse brokerage houses and other custodians, nominees and fiduciaries for their costs of soliciting and obtaining proxies from beneficial owners, including the costs of reimbursing brokerage houses and other custodians, nominees and fiduciaries for their costs of forwarding this proxy statement and other solicitation materials to beneficial owners. In addition, proxies may be solicited without extra compensation by directors, officers and employees of the Company by mail, telephone, email, fax or other methods of communication.
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Delivery of Proxy Materials to Households Where Two or More Shareholders Reside
The
In connection with the Annual Meeting, a number of brokers with account holders who are the Company's shareholders will be householding the proxy materials. As a result, a single proxy statement will be delivered to multiple shareholders sharing an address unless contrary instructions have been received from the applicable shareholders. Once a shareholder receives notice from its broker that they will be householding communications to such shareholder's address, householding will continue until such shareholder is notified otherwise or until such shareholder revokes its consent. If, at any time, a shareholder no longer wishes to participate in householding and would prefer to receive a separate proxy statement, such shareholder should notify its broker or contact the Company at (626) 272-3883. Shareholders who currently receive multiple copies of this proxy statement at their address and would like to request householding of their communications should contact their broker.
Attending the Annual Meeting
Attendance at the Annual Meeting is limited to shareholders of the Company as of the Record Date. For safety and security reasons, video and audio recording devices and other electronic devices will not be allowed in the meeting. If your shares are held in the name of your bank, brokerage firm or other nominee, you must bring to the Annual Meeting a copy of your proxy card, an account statement, or a letter from the nominee indicating that you beneficially owned the shares as of the Record Date for voting. If you do not have proof of share ownership, you will not be admitted to the Annual Meeting.
For registered shareholders, a copy of your proxy card can serve as verification of stock ownership. Shareholders who do not present a copy of their proxy card at the Annual Meeting will be admitted only upon verification of stock ownership, as indicated herein. If you do not have proof of share ownership, you will not be admitted to the Annual Meeting. In addition, all Annual Meeting attendees will be asked to present valid government-issued photo identification, such as a driver's license or passport, as proof of identification before entering the Annual Meeting, and attendees may be subject to security inspections.
Dissenters' Rights
Under
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PROPOSAL ONE
ELECTION OF DIRECTORS
The nominees listed below have been selected by the
The nominees all are currently members of the Board. If elected, each nominee will serve until the annual meeting of shareholders to be held in 2025 (or action by written consent of shareholders in lieu thereof), or until his or her successor has been duly elected and qualified.
Composition of Board of Directors
Our bylaws provide that the Board shall consist of not less than one (1) and not more than nine (9) directors. The Board currently consists of five (5) members. The Board has fixed the size of the Board to be elected in 2024 at five (5) members.
In the event that a nominee is unable or declines to serve as a director at the time of the Annual Meeting, the Board's
Nominees for Election as Directors
The Nominating Committee has recommended, and the Board has nominated, Dr.
| Position with the Company | Age | Director Since | |
| Dr. |
Chief Executive Officer, Secretary, and Director | 60 | |
| Dr. |
Director and Chairman | 60 | |
| Independent Director(1)(2)(3)(4) | 44 | ||
| Independent Director(1)(2)(3)(5) | 61 | ||
| Independent Director(1)(2)(3)(6) | 53 |
_____________
| (1) | Member of Audit Committee. |
| (2) | Member of Compensation Committee. |
| (3) | Member of |
| (4) | Chairperson of Audit Committee. |
| (5) | Chairperson of Compensation Committee. |
| (6) | Chairperson of |
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The following chart provides certain self-identified characteristics of our nominees and current directors utilizing the categories and terms set forth in the applicable Nasdaq rules and related guidance.
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Board of Directors Diversity Matrix (as of |
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| Total Director Nominees and Continuing Directors | 5 | |||
| Female | Male | Non-Binary | Did Not Disclose Gender | |
| Gender Identity | ||||
| Directors | 1 | 4 | - | - |
| Demographic Background | ||||
| - | - | |||
| - | - | |||
| Asian | - | 2 | ||
| Hispanic, Latinx or Spanish Origin | - | - | ||
| Native Hawaiian or Pacific Islander | - | - | ||
| White | 1 | 2 | ||
| Other | - | - | ||
| Two or More Races of Ethnicities | - | - | ||
| LGBTQ+ | - | |||
| Did not Disclose Demographic Background | - |
Vote Required and Recommendation of the Board
Directors are elected by a plurality of the votes cast at the Annual Meeting. If a quorum is present, the nominees receiving the highest number of "FOR" votes will be elected to the Board. Shares represented by executed proxies will be voted for which no contrary instruction is given, if authority to do so is not withheld, "FOR" the election of each of the nominees named above. Only votes "FOR" will affect the outcome. Abstentions and broker non-votes will have no effect on the election of directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE ELECTION OF DR.
| 15 |
Biographical Information Regarding Directors and Nominees
Dr.
Dr.
| 16 |
Other Executive Officers of the Company
The following is certain information as of the Record Date regarding the other executive officers of the Company not discussed above.
| Position with the Company | Age | Officer Since | |
| Chief Financial Officer | 49 |
| 17 |
CORPORATE GOVERNANCE
Board of Directors
Our Board currently consists of five (5) members. Our Chairperson of the Board is Dr.
Director Attendance at Meetings
Our Board conducts its business through meetings, both in person and telephonic, and by actions taken by written consent in lieu of meetings. During the year ended
Our Board encourages all directors to attend our annual meetings of shareholders unless it is not reasonably practicable for a director to do so.
Committees of our Board of Directors
Our Board has established and delegated certain responsibilities to its standing Audit Committee, Compensation Committee and
Audit Committee
We have a separately designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Audit Committee's primary duties and responsibilities include monitoring the integrity of our financial statements, monitoring the independence and performance of our external auditors, and monitoring our compliance with applicable legal and regulatory requirements. The functions of the Audit Committee also include reviewing periodically with our independent registered public accounting firm the performance of the services for which they are engaged, including reviewing the scope of the annual audit and its results, reviewing with management and the auditors the adequacy of our internal accounting controls, reviewing with management and the auditors the financial results prior to the filing of quarterly and annual reports, reviewing fees charged by our independent registered public accounting firm and reviewing any transactions between our Company and related parties. Our independent registered public accounting firm reports directly and is accountable solely to the Audit Committee. The Audit Committee has the sole authority to hire and fire the independent registered public accounting firm and is responsible for the oversight of the performance of their duties, including ensuring the independence of the independent registered public accounting firm. The Audit Committee also approves in advance the retention of, and all fees to be paid to, the independent registered public accounting firm. The rendering of any auditing services and all non-auditing services by the independent registered public accounting firm is subject to prior approval of the Audit Committee.
The Audit Committee operates under a written charter. The Audit Committee is required to be composed of directors who are independent under the rules of the
The current members of the Audit Committee are directors Mr.
| 18 |
Compensation Committee
The primary duties and responsibilities of our standing Compensation Committee are to review, modify and approve the overall compensation policies for the Company, including the compensation of the Company's Chief Executive Officer and other senior management; establish and assess the adequacy of director compensation; and approve the adoption, amendment and termination of the Company's stock option plans, pension and profit-sharing plans, bonus plans and similar programs. The Compensation Committee may delegate to one or more officers the authority to make grants of options and restricted stock to eligible individuals other than officers and directors, subject to certain limitations. Additionally, the Compensation Committee has the authority to form subcommittees and to delegate authority to any such subcommittee. The Compensation Committee also has the authority, in its sole discretion, to select, retain and obtain, at the expense of the Company, advice and assistance from internal or external legal, accounting or other advisors and consultants. Moreover, the Compensation Committee has sole authority to retain and terminate any compensation consultant to assist in the evaluation of director, Chief Executive Officer or senior executive compensation, including sole authority to approve such consultant's reasonable fees and other retention terms, all at the Company's expense.
The Compensation Committee operates under a written charter. All members of the Compensation Committee must satisfy the independence requirements of NASDAQ applicable to compensation committee members.
The Compensation Committee currently consists of directors Ms.
Nominating and Corporate Governance Committee
| 19 |
Communications with our Board of Directors
In order to provide the Company's security holders and other interested parties with a direct and open line of communication to the Board, the Board has adopted the following procedures for communications to directors. The Company's security holders and other interested persons may communicate with the Chairperson of the Company's Audit Committee or with the non-management directors of the Company as a group by mailing a letter addressed in care of the Corporate Secretary to
All communications received in accordance with these procedures will be reviewed initially by the Company's Secretary and/or other executive officers. The Company will relay all such communications to the appropriate director or directors unless the Secretary determines that the communication:
| · | does not relate to the business or affairs of the Company or the functioning or constitution of the Board or any of its committees; |
| · | relates to routine or insignificant matters that do not warrant the attention of the Board; |
| · | is an advertisement or other commercial solicitation or communication; |
| · | is frivolous or offensive; or |
| · | is otherwise not appropriate for delivery to directors. |
The director or directors who receive any such communication will have discretion to determine whether the subject matter of the communication should be brought to the attention of the full Board or one or more of its committees, and whether any response to the person sending the communication is appropriate. Any such response will be made only in accordance with applicable law and regulations relating to the disclosure of information.
The Secretary will retain copies of all communications received pursuant to these procedures for a period of at least one (1) year.
Oversight of Risk Management
Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including economic risks, financial risks, legal and regulatory risks and others, such as the impact of competition. Management is responsible for the day-to-day management of the risks that we face, while our Board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, our Board is responsible for satisfying itself that the risk management processes designed and implemented by management are adequate and functioning as designed. Our Board assesses major risks facing our Company and options for their mitigation in order to promote our shareholders' interests, the long-term health of our Company and our overall success and financial strength. A fundamental part of risk management is not only understanding the risks a company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for us. The involvement of our full Board in the risk oversight process allows our Board to assess management's appetite for risk and also determine what constitutes an appropriate level of risk for our Company. Our Board regularly includes agenda items at its meetings relating to its risk oversight role and meets with various members of management on a range of topics, including corporate governance and regulatory obligations, operations and significant transactions, risk management, insurance, pending and threatened litigation and significant commercial disputes.
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While our Board is ultimately responsible for risk oversight, various committees of our Board oversee risk management in their respective areas and regularly report on their activities to our entire Board. In particular, the Audit Committee has the primary responsibility for the oversight of financial risks facing our Company. The Audit Committee's charter provides that it will discuss our major financial risk exposures and the steps we have taken to monitor and control such exposures. Our Board has also delegated primary responsibility for the oversight of all executive compensation and our employee benefit programs to the Compensation Committee. The Compensation Committee strives to create incentives that encourage a level of risk-taking behavior consistent with our business strategy.
We believe the division of risk management responsibilities described above is an effective approach for addressing the risks facing our Company and that our Board's leadership structure provides appropriate checks and balances against undue risk taking.
Code of Business Conduct and Ethics
Our Board has adopted a code of ethical conduct that applies to our principal executive officer, principal financial officer and senior financial management. This code of ethical conduct is embodied within our Code of Business Conduct and Ethics, which applies to all persons associated with our Company, including our directors, officers and employees (including our principal executive officer, principal financial officer, and controller). In order to satisfy our disclosure requirements under Item 5.05 of Form 8-K, we will disclose amendments to, or waivers of, certain provisions of our Code of Business Conduct and Ethics relating to our chief executive officer, chief financial officer, chief accounting officer, controller or persons performing similar functions on our corporate website, www.focusuniversal.com, promptly following the adoption of any such amendment or waiver. The Code of Business Conduct and Ethics provides that any waivers of, or changes to, the code that apply to the Company's executive officers or directors may be made only by the Audit Committee. In addition, the Code of Business Conduct and Ethics includes updated procedures for non-executive officer employees to seek waivers of the code.
Director Independence
Our Company is governed by our Board. Currently, each member of our Board, other than Dr.
| 21 |
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Compensation Program and Philosophy
The Compensation Committee administers the Company's executive compensation program. The Compensation Committee has the authority to review and determine the salaries and bonuses of the executive officers of the Company, including the Chief Executive Officer and the other named executive officers, and to establish the overall compensation policies for the Company. The Compensation Committee also has the authority to make discretionary option grants to all of the Company's employees under the Company's equity incentive plans.
The Compensation Committee operates under a written charter. The duties and responsibilities of a member of the Compensation Committee are in addition to his or her duties as a member of the Board. The charter reflects these various responsibilities, and the Compensation Committee is charged with periodically reviewing the charter. The Compensation Committee's membership is determined by the Board and is composed entirely of independent directors. In addition, the Compensation Committee has the authority to engage the services of outside advisors, experts and others, including independent compensation consultants who do not advise the Company, to assist the Compensation Committee. The Compensation Committee currently consists of directors Ms.
The Compensation Committee believes that the compensation programs for the Company's executive officers should reflect the Company's performance, support the short- and long-term strategic goals and values of the Company, reward individual contribution to the Company's success and align the interests of the Company's executive officers with the interests of the Company's shareholders. The Company is engaged in a very competitive industry, and the Company's success depends upon its ability to attract and retain qualified executives through the competitive compensation packages it offers to such individuals. To that end, it is the view of the Board that the total compensation program for executive officers should consist of all or most of the following components:
| · | base salary; |
| · | bonus; and |
| · | equity-based compensation. |
The Compensation Committee does not rely solely on predetermined formulas or a limited set of criteria when it evaluates the performance of the Company's Chief Executive Officer and the Company's other executive officers. Typically, our Chief Executive Officer makes compensation recommendations to the Committee with respect to the compensation of our officers, and the Committee may accept or adjust such recommendations in its discretion.
The total compensation packages for executive officers are determined initially by evaluating the responsibilities of the position, the experience of the individual and the competition in the marketplace for management talent, and also may include comparison with companies confronting problems of the magnitude and complexity faced by the Company.
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Compensation of our executive officers is intended to be competitive with the overall marketplace, commensurate with the qualifications and experience of the named executive officer. The Company's compensation structure is intended to provide the necessary incentive to retain and motivate qualified personnel. Individuals are encouraged to add value and provide benefit in all aspects of the Company's operations currently and in the future.
Total compensation packages and adjustments thereto are evaluated on a number of factors, both internal and external in nature. The most important factors are the executive's performance and contribution to the Company, followed by the performance of the Company, any increased responsibilities assumed by the executive and the competition in the marketplace for similarly experienced executives.
The compensation packages of the named executive officers are reviewed on an annual basis and may also be adjusted from time to time based on changes in responsibilities or as a result of other external and economic factors.
We offer health, dental and vision insurance to all of our employees, including the named executive officers.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code disallows a tax deduction to publicly held companies for compensation paid to certain of their executive officers, to the extent that compensation exceeds
Compensation of Officers
The following summary compensation table sets forth information concerning compensation for services rendered in all capacities during fiscal years 2023 and 2022 awarded to, earned by or paid to our "named executive officers."
Summary Compensation Table
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | ||||||||||||||||||||||||||
| Salary | Bonus | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value & Non-qualified Deferred Compensation Earnings | All Other Compensation |
Totals | ||||||||||||||||||||||||||||
| Position | Year | ($)* | ($) | ($) | ($) | (S) | ($) | ($) | ($) | ||||||||||||||||||||||||||
| 2023 | 122,308 | 0 | 0 | 0 | 21,000 | 0 | 0 | 143,308 | |||||||||||||||||||||||||||
| CEO, Secretary and Director | 2022 | 120,000 | 0 | 0 | 0 | 21,020 | 0 | 0 | 141,020 | ||||||||||||||||||||||||||
| 2023 | 203,532 | 0 | 0 | 0 | 27,863 | 0 | 0 | 231,395 | |||||||||||||||||||||||||||
| Chief Financial Officer | 2022 | 150,000 | 0 | 0 | 0 | 10,000 | 0 | 0 | 160,000 |
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Employment Agreements
Dr.
As of the date of this Proxy Statement, no other officer or director has formally entered into any compensation arrangement for services provided under consulting agreements or employment agreements. We offer health, dental and vision insurance to all of our employees, including the named executive officers.
Retirement, Resignation or Termination Plans
We sponsor no plan, whether written or verbal, that would provide compensation or benefits of any type to an executive upon retirement, or any plan that would provide payment for retirement, resignation, or termination as a result of a change in control of our Company or as a result of a change in the responsibilities of an executive following a change in control of our Company.
Directors' Compensation
The persons who served as affiliated members of our Board, including executive officers, did not receive any compensation for services as directors in 2022 or 2023. As of the date of this Proxy Statement, no director has formally entered into any compensation arrangement for services provided under consulting agreements or employment agreements.
As of the date of this Proxy Statement, all directors have been issued 22,500 options per person pursuant to our 2018 Stock Option Plan and such options will vest over a period of one year. In 2022, all of our current independent directors were paid
Option Exercises and Stock Vested
On
Pension Benefits and Nonqualified Deferred Compensation
The Company does not maintain any qualified retirement plans or non-nonqualified deferred compensation plans for its employees or directors.
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Executive Officer and Director Outstanding Equity Awards at Fiscal Year-End
The following table provides certain information concerning any Common Stock purchase options, stock awards or equity incentive plan awards held by each of our named executive officers and directors that were outstanding as of
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
|
Number of Securities Underlying Unexercised Options (#) |
Number of Securities Underlying Unexercised Options (#) |
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned |
Option Exercise Price |
Option Expiration |
Number of Shares or Units of Stock That Have Not Vested |
Market Value of Shares or Units of Stock That Have Not |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not |
||||||||||||||||||||||||||||
| Exercisable | Unexercisable | Options (#) | ($) | Date | (#) | Vested | Vested | Vested | ||||||||||||||||||||||||||||
| 45,000 | - | - | $ | 3.80 | - | - | - | - | ||||||||||||||||||||||||||||
| Chairman | 22,500 | - | - | $ | 2.00 | - | - | - | - | |||||||||||||||||||||||||||
| 22,500 | - | - | $ | 5.91 | - | - | - | - | ||||||||||||||||||||||||||||
| 22,500 | - | - | $ | 4.27 | - | - | - | - | ||||||||||||||||||||||||||||
| 45,000 | - | - | $ | 3.80 | - | - | - | - | ||||||||||||||||||||||||||||
| CEO, Secretary | 22,500 | - | - | $ | 2.00 | - | - | - | - | |||||||||||||||||||||||||||
| 22,500 | - | - | $ | 5.91 | - | - | - | - | ||||||||||||||||||||||||||||
| 22,500 | - | - | $ | 4.27 | - | - | - | - | ||||||||||||||||||||||||||||
| - | - | - | - |
25,000 |
- | - | - | |||||||||||||||||||||||||||||
| 9,375 | - | - | $ | 5.91 | - | - | - | - | ||||||||||||||||||||||||||||
| 22,500 | - | - | $ | 4.27 | - | - | - | - | ||||||||||||||||||||||||||||
| 45,000 | - | - | $ | 3.80 | - | - | - | - | ||||||||||||||||||||||||||||
| 22,500 | - | - | $ | 2.00 | - | - | - | - | ||||||||||||||||||||||||||||
| 22,500 | - | - | $ | 5.91 | - | - | - | - | ||||||||||||||||||||||||||||
| 22,500 | - | - | $ | 4.27 | - | - | - | - | ||||||||||||||||||||||||||||
| 22,500 | - | - | $ | 4.27 | - | - | - | - |
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED SHAREHOLDER MATTERS
The following table sets forth certain information regarding beneficial ownership of our Common Stock as of
| Amount and | ||||||||||
| Nature | Percentage of | |||||||||
| of Beneficial | Beneficial | |||||||||
| Ownership | Ownership | |||||||||
| Title of Class | (1) | % | ||||||||
| Common | 21,597,600 | 33.45% | ||||||||
| Common | 11,022,500 | 16.05% | ||||||||
| Common | 4,420,342 | 6.43% | ||||||||
| Common | 36,000 | * | ||||||||
| Common | 2,319 | * |
| (1) | Applicable percentage of ownership is based on 68,667,760 shares of Common Stock outstanding on |
Percentage ownership is determined based on shares owned together with securities exercisable or convertible into shares of Common Stock within 60 days of
As of
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our executive officers, directors, and persons who own more than 10% of a registered class of our equity securities (collectively, the "Reporting Persons") to file reports of ownership and changes in ownership with the
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Consulting services provided by the President, Chief Executive Officer, Secretary, Treasurer and Chief Financial Officer for the years ended
|
For the 2023 |
For the
|
|||||||
| President | $ | 0 | $ | 0 | ||||
| Chief Executive Officer, Secretary and Treasurer | 143,328 | 141,020 | ||||||
| Chief Financial Officer | 231,395 | 37,020 | ||||||
| $ | 374,723 | $ | 178,040 |
Related Party Transactions
Revenue generated from
Service revenue generated from the installation of home security equipment by
Loans with Related Persons
On
On
Private Placement of Common Stock
As previously disclosed, on or about
| 27 |
REPORT OF THE COMPENSATION COMMITTEE
The information contained in this Report of the Compensation Committee shall not be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing (except to the extent that we specifically incorporate this information by reference) and shall not otherwise be deemed "soliciting material" or "filed" with the
The Compensation Committee is comprised of directors Ms.
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis and based on such review and discussions recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
By the
| 28 |
PROPOSAL TWO
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Upon approval of the
The Audit Committee of the Board has appointed
Based on the direction of the Audit Committee, the Board is proposing that the shareholders ratify the appointment of
Vote Required
If a quorum is present, the affirmative vote of a majority of the shares present and entitled to vote at the Annual Meeting will be required to ratify the appointment of
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR"
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Principal Accountant Fees and Services
The following table summarizes the fees billed by Reliant CPA PC, our former independent registered public accounting firm, for the fiscal years ended
| Year ended 2023 |
Year ended 2022 |
|||||||
| Audit fees | $ | 92,000 | $ | 94,000 | ||||
| Audit - related fees | $ | Nil | $ | Nil | ||||
| Tax fees | $ | Nil | $ | Nil | ||||
| All other fees | $ | Nil | $ | Nil |
Audit fees consist of fees related to professional services rendered in connection with the audit of our annual financial statements and review of our quarterly financial statements. Tax fees represent fees related to preparation of our corporation income tax returns. Our policy is to pre-approve all audit and permissible non-audit services performed by the independent accountants. These services may include audit services, audit-related services, tax services and other services.
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REPORT OF THE AUDIT COMMITTEE
The information contained in this Report of the Audit Committee shall not be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing (except to the extent that we specifically incorporate this information by reference) and shall not otherwise be deemed "soliciting material" or "filed" with the
The Audit Committee is comprised of directors Mr.
The Audit Committee's primary duties and responsibilities include monitoring the integrity of the Company's financial statements, monitoring the independence and performance of the Company's external auditors, and monitoring the Company's compliance with applicable legal and regulatory requirements. The functions of the Audit Committee also include reviewing periodically with the Company's independent registered public accounting firm the performance of the services for which they are engaged, including reviewing the scope of the annual audit and its results, reviewing with management and the auditors the adequacy of the Company's internal accounting controls, reviewing with management and the auditors the financial results prior to the filing of quarterly and annual reports, reviewing fees charged by the Company's independent registered public accounting firm and reviewing any transactions between the Company and related parties. The Company's independent registered public accounting firm reports directly and is accountable solely to the Audit Committee. The Audit Committee has the sole authority to hire and fire the independent registered public accounting firm and is responsible for the oversight of the performance of their duties, including ensuring the independence of the independent registered public accounting firm. The Audit Committee also approves in advance the retention of, and all fees to be paid to, the independent registered public accounting firm. The rendering of any auditing services and all non-auditing services by the independent registered public accounting firm is subject to prior approval of the Audit Committee.
Management is responsible for the Company's internal controls and the financial reporting process. The Company's independent registered public accounting firm is responsible for performing an independent audit of the Company's consolidated financial statements in accordance with the standards of the
In carrying out these responsibilities, the Audit Committee monitored the Company's operational effectiveness regarding the progress and completion of the implementation of the Company's internal controls.
In overseeing the preparation of the Company's financial statements, the Audit Committee met with the Company's Chief Financial Officer and management, and held meetings with the Company's independent registered public accounting firm, both in the presence of management and privately, to review and discuss all financial statements prior to their issuance, the overall scope and plans for the preparation of the financial statements and respective audit, and the evaluation of the Company's internal controls and significant accounting issues. Management advised the Audit Committee that all financial statements were prepared in accordance with accounting principles generally accepted in
With respect to the Company's independent registered public accounting firm, the Audit Committee, among other things, discussed with
On the basis of these reviews and discussions, the Audit Committee (i) appointed
By the
| 31 |
PROPOSAL THREE
SHARE INCREASE PROPOSAL
Background
Our Articles of Incorporation currently authorize a total of 75,000,000 shares of the Company's Common Stock. After careful consideration, our Board recommends that our shareholders approve a proposal to amend, at the sole discretion of the Board to adopt, our Articles of Incorporation to authorize an additional 75,000,000 shares of Common Stock, which would result in total authorized shares of 150,000,000 shares of Common Stock. The text of the proposed Certificate of Amendment to our Articles of Incorporation (the "Certificate of Amendment"), is attached as Appendix A to this Proxy Statement.
The Board has adopted a resolution (i) declaring the advisability of a possible amendment to our Articles of Incorporation to authorize an additional 75,000,000 shares of Common Stock, subject to shareholder approval, (ii) in connection therewith, approving a form of amendment to our Articles of Incorporation to authorize an additional 75,000,000 shares of Common Stock, subject to shareholder approval, and (iii) authorizing any other action the Board deems necessary to effect such amendment to our Articles of Incorporation, without further approval or authorization of the Company's shareholders.
The adoption of the Certificate of Amendment is expressly conditioned upon the approval of the Certificate of Amendment by our shareholders. Accordingly, if we do not receive the required shareholder approval for the Certificate of Amendment, we will not adopt the Certificate of Amendment. However, even if approved by the shareholders at the Annual Meeting, the Board will retain the discretion to determine whether to file the Certificate of Amendment with the Secretary of State of the
Purpose of the Proposed Amendment
The purpose of the proposed amendment is to increase the number of Common Stock shares available (without delay or the necessity for a special shareholders' meeting) for issuance to investors who agree to provide the Company with the funding it requires to continue its operations, and/or to persons in connection with potential acquisition transactions, warrant or option exercises and other transactions under which our Board may determine are in the best interest of the Company and our stockholders. Our Board believes it is in the best interest of our Company to increase the number of authorized shares of Common Stock in order to give us greater flexibility in considering and planning for future corporate needs, including, but not limited to, future financing and recapitalization efforts as well as other general corporate transactions. The Board believes that additional authorized shares of Common Stock will enable us to take timely advantage of market conditions and favorable financing and acquisition opportunities that become available to us. We are considering issuing part of the additional shares of Common Stock that will result from the adoption of the proposed amendment to raise funds as may be required from time to time to pursue our business objectives, including research and development of our products; however, we do not have any definitive plans, arrangements, understandings or agreements to issue any of the proposed additional authorized shares of Common Stock that will become available for issuance if this Proposal is approved and the Certificate of Amendment is subsequently adopted and filed by the Board.
Reasons for the Proposed Amendment
After careful consideration, our Board determined by written consent effective
| 32 |
The additional shares of Common Stock, if the Certificate of Amendment is subsequently adopted by the shareholders and filed by the Board, will be available for issuance by the
The Certificate of Amendment will ensure that we will continue to have an adequate number of authorized and unissued shares of Common Stock available for future use. As is the case with the shares of Common Stock which are currently authorized but unissued, if the Certificate of Amendment is adopted by the Company's shareholders and the Certificate of Amendment is subsequently adopted and filed by the Board, the Board will only have authority to issue the additional shares of Common Stock from time to time without further action on the part of shareholders to the extent not prohibited by applicable law or by the rules of any stock exchange or market on which our securities may then be listed or authorized for quotation.
Effect of the Proposed Amendment
If the proposed Certificate of Amendment to authorize an additional 75,000,000 shares of Common Stock described above is approved and adopted by our shareholders and subsequently adopted and filed by the Board, we will have the authority under our Certificate of Incorporation to have up to 150,000,000 shares of Common Stock issued and outstanding. As of
The Board has not proposed the increase in the amount of authorized shares with the intention of discouraging tender offers or takeover attempts of the Company. However, the availability of additional authorized shares for issuance may have the effect of discouraging a merger, tender offer, proxy contest, or other attempt to obtain control of the Company.
If the shareholders approve the proposal and if the Certificate of Amendment is subsequently adopted and filed by the Board, the Certificate of Amendment will become effective upon the filing of the Certificate of Amendment as set out above and in Appendix A with the Secretary of State of the
Risks/Impacts of Non-approval
If the proposed Certificate of Amendment to authorize an additional 75,000,000 shares of Common Stock described above is not approved and adopted by our shareholders, our Certificate of Incorporation will not be amended as set forth above and we will continue to have the authority under our Certificate of Incorporation to have up to 75,000,000 shares of Common Stock issued and outstanding.
Interest of Certain Persons in Matter to be Acted Upon
No officer or director has any substantial interest, direct or indirect, by security holdings or otherwise, in the share increase proposed above that is not shared by all other shareholders.
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Vote Required
The affirmative vote of a majority of the votes cast at the Annual Meeting is required to approve the proposed Certificate of Amendment to authorize, at the sole discretion of the Board, a total of 150,000,000 shares of Common Stock.
This proposal will be approved if votes representing a majority of the shares entitled to vote and represented at the meeting in person or by proxy vote in favor of the Proposal. Therefore, abstentions will have the effect of a vote "AGAINST" the approval to amend the Company's Articles of Incorporation to increase the total number of authorized shares of Common Stock from 75,000,000 shares to 150,000,000 shares. Broker non-votes will have no effect on the outcome of the vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE APPROVAL OF, SUBJECT TO THE BOARD OF DIRECTORS' DISCRETION TO ADOPT, AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK TO 150,000,000 SHARES AS DESCRIBED UNDER PROPOSAL THREE AND SET FORTH IN APPENDIX A HERETO.
Unless otherwise instructed, the proxyholders will vote all properly submitted proxies "FOR" the approval of, subject to the Board's discretion to adopt, an amendment to the Certificate of Incorporation to increase the number of authorized shares of Common Stock to 150,000,000 shares.
| 34 |
DELIVERY OF PROXY MATERIALS TO HOUSEHOLDS
Only one copy of the Company's Annual Report on Form 10-K for the fiscal year ended
If you are a shareholder who lives at a shared address and you would like additional copies of the Annual Report on Form 10-K, this Proxy Statement or any future annual reports or proxy statements, please contact
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON
ADDITIONAL INFORMATION
The Company's Annual Report on Form 10-K for the year ended
The accompanying proxy is solicited by and on behalf of the Company's Board. The cost of such solicitation will be borne by the Company. In addition to solicitation by mail, regular employees of the Company may, if necessary to assure the presence of a quorum, solicit proxies in person, or by telephone, facsimile or other electronic means. Arrangements have been made with brokerage houses and other custodians, nominees and fiduciaries, for the forwarding of solicitation materials to the beneficial owners of Common Stock held of record by such persons, and the Company will reimburse such entities for reasonable out-of-pocket expenses incurred in connection therewith. The Company has engaged
If any matter not described in this Proxy Statement should properly come before the Annual Meeting, the persons named in the accompanying proxy will vote the shares represented by that proxy in accordance with their best judgment unless a shareholder, by striking out the appropriate provision of the proxy, chooses to withhold authority to vote on such matters. As of the date this Proxy Statement was printed, the directors knew of no other matters to be brought before the Annual Meeting.
Copies of Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K and Proxy Statements can also be obtained directly from the Company free of charge by sending a request to the Company by mail as follows:
Attention: Investor Relations
In addition, the Company's public reports, including Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K and Proxy Statements, can be obtained through the
| 35 |
OTHER MATTERS
Management knows of no other matters that will be presented at the meeting. If any other matters arise at the meeting, it is intended that the shares represented by the proxies will be voted in accordance with the judgment of the persons acting as proxies.
| BY ORDER OF THE BOARD OF DIRECTORS | |
| /s/ |
|
| Chief Executive Officer, Secretary, and Director | |
| 36 |
APPENDIX A
CERTIFICATE OF AMENDMENT TO THE
ARTICLES OF INCORPORATION
OF
FIRST: The name of the Corporation is
SECOND: The Board of Directors of the Corporation has duly adopted a resolution pursuant to Section 78.390 of the Nevada Revised Statutes setting forth a proposed amendment (the "Certificate of Amendment") to the Corporation's Amended Articles of Incorporation (the "Articles of Incorporation") and declaring said Certificate of Amendment to be advisable. The requisite stockholders of the Corporation have duly approved said proposed Certificate of Amendment in accordance with Section 78.320 and 78.390 of the Nevada Revised Statutes of the
3. The total number of stock authorized that may be issued by the Corporation is one hundred fifty million (150,000,000) shares of Common Stock with a par value of one tenth of
THIRD: Effective date of filing (optional): ______________
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be duly adopted and executed in its corporate name and on its behalf by its duly authorized officer as of the day _______of ___________, 2024.
By:
Title: Chief Executive Officer
| 37 |
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