Abvc Biopharma, Inc PRE 14A, filed May 31, 2023
Abvc Biopharma, Inc. (ABVC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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 under § 240.14a-12
ABVC BIOPHARMA, INC.
(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 all boxes that apply):
☒ No fee required
☐ Fee paid previously with preliminary materials.
☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a- 6(i)(1) and 0-11
ABVC BIOPHARMA, INC.
44370 Old Warm Springs Blvd., Fremont, CA 94538
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of ABVC BioPharma, Inc.:
You are cordially invited to attend the special shareholder meeting of ABVC BioPharma, Inc. (the “Company” or “ABVC”) to be held on July 7, 2023 at 9:00 p.m., local time in Taiwan (or 9:00 a.m. EST), as a virtual electronic meeting using a Zoom video webinar (the “Meeting”). Due to concerns regarding the coronavirus pandemic and to assist in protecting the well-being and health of our shareholders and employees, the Meeting will be held virtually via the Internet only with no physical in-person meeting excluding the Board of Directors. Technology will be incorporated into the Meeting to increase efficiency, allow for social distancing and provide for shareholder participation. In addition to on-line attendance, shareholders can hear all portions of the Meeting, submit written questions during the Meeting and listen to live responses to shareholder questions.
To attend the virtual Meeting, go to the Zoom link below:
https://us06web.zoom.us/j/87430319309
After you register with your name and email address, so that we can log attendees, you will be taken into the waiting room until the meeting begins.
This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors (the “Board”) of ABVC BioPharma, Inc. (the “Company”) for use at the special meeting of Shareholders of the Company (the “Meeting”) and at all adjournments and postponements thereof. The Meeting will be held on July 7, 2023, at 9:00 p.m., local time in Taiwan (or 9:00 a.m. EST), to consider and vote upon the following proposal:
| 1. | To approve granting the Board the authority to effect one or more reverse splits of the Company’s issued and outstanding Common Stock by a ratio of up to one-for-fifteen, at any time or from time to time, prior to July 7, 2024, with the exact timing and amount of each split to be determined by the Board in its sole discretion (the “Reverse Split Proposal”) and file a Certificate of Amendment to the Company’s Articles of Incorporation regarding same. |
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE PROPOSAL.
Holders of record of the Company’s Common Stock at the close of business on May 26, 2023 (the “Record Date”) will be entitled to notice of, and to vote at, this Meeting and any adjournment or postponement thereof. Each share of Common Stock entitles the holder thereof to one vote.
Your vote is important, regardless of the number of shares you own. Due to the virtual nature of the Meeting, you are urged to vote in favor of the proposal by so indicating on the enclosed Proxy and by signing and returning the enclosed Proxy as promptly as possible, before 11:59 p.m. EST on July 6, 2023, whether or not you plan to attend the Meeting virtually. The enclosed Proxy is solicited by the Company’s Board of Directors. Any shareholder giving a Proxy may revoke it prior to the time it is voted by notifying the Secretary, in writing, to that effect, by filing with him/her a later dated Proxy. You will not be able to vote at the Meeting; therefore, it is strongly recommended that you complete the enclosed proxy card before 11:59 p.m. EST on July 6, 2023, to ensure that your shares will be represented at this Meeting.
A complete list of Shareholders of record entitled to vote at this Meeting will be available for ten days before this Meeting at the principal executive office of the Company for inspection by Shareholders during ordinary business hours for any purpose germane to this Meeting.
Whether or not you plan to attend the special meeting, we urge you to read this notice carefully and to vote your shares. Your vote is very important. If you are a registered shareholder, please vote your shares as soon as possible by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the special meeting. If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR the Reverse Split Proposal being considered at the special meeting.
I want to thank all of our shareholders as we look forward to what we believe will be an exciting future for our business.
We strongly encourage you to vote by proxy as described in the Proxy Statement so that your vote can be counted.
This notice and the enclosed proxy statement are first being mailed to Shareholders on or about June 21, 2023.
You are urged to review carefully the information contained in the enclosed proxy statement prior to deciding how to vote your shares.
| By Order of the Board, | |
| /s/ Howard Doong | |
| Howard Doong | |
| Chief Executive Officer | |
| May 26, 2023 |
IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED “FOR” THE REVERSE SPLIT PROPOSAL.
Important Notice Regarding the Availability of Proxy Materials
for the Special Shareholder Meeting to Be Held at 9:00 p.m., local time in Taiwan (or 9:00 a.m. EST) on
July 7, 2023 Eastern Standard Time
The Notice of Special Meeting and proxy statement are available at www.proxyvote.com.
TABLE OF CONTENTS
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PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
to be held on July 7, 2023, at 9:00 p.m., local time in Taiwan, 9:00 a.m. Eastern Standard Time
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS
Why am I receiving this proxy statement?
This notice provides some details about the proposal on which our Board would like you, as a stockholder, to vote at the Meeting, which will take place at 9:00 p.m., local time in Taiwan (or 9:00 a.m. EST), on Friday, July 7, 2023 via the Zoom link below. Due to the continued public health impact of the coronavirus, or COVID-19, the Company has decided to hold the Special Meeting of Shareholders as a virtual electronic meeting using Zoom video webinar. To assist in protecting the well-being and health of our shareholders and employees, the Meeting will be held virtually via the Internet only with no physical in-person meeting except the Board of Directors. In addition to on-line attendance, shareholders can hear all portions of the Meeting, submit written questions during the Meeting and listen to live responses to shareholder questions.
To attend the virtual Meeting via Zoom, go to the link below:
https://us06web.zoom.us/j/87430319309
After you register with your name and email address, so that we can log attendees, you will be taken into the waiting room until the meeting begins.
We recommend you log in at least 15 minutes before the Meeting to ensure you are logged in when the meeting starts.
Shareholders are being asked to consider and vote upon a proposal to grant the Board authority to implement one or more reverse stock splits, as further described herein.
This proxy statement also gives you information on the proposal so that you can make an informed decision. You should read it carefully. Your vote is important. You are encouraged to submit your proxy card as soon as possible after carefully reviewing this proxy statement.
In this proxy statement, we refer to ABVC BioPharma, Inc. as the “Company”, “we”, “us” or “our.”
Who can vote at this Meeting?
Shareholders who owned shares of our common stock, $0.001 par value per share (the “Common Stock”) on May 26, 2023 (the “Record Date”) may attend and vote at this Meeting. There were 33,080,740 shares of Common Stock outstanding on the Record Date. All shares of Common Stock shall have one vote per share.
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What is the proxy card?
The card enables you to appoint Howard Doong or Tsung-Shann Jiang as your representative at this Meeting. By completing and returning the proxy card, you are authorizing these persons to vote your shares at this Meeting in accordance with your instructions on the proxy card. This way, your shares will be voted whether or not you attend this Meeting. Even if you plan to attend this Meeting, it is strongly recommended to complete and return your proxy card before 11:59 p.m. EST on July 6, 2023 in case your plans change. If a proposal comes up for vote at this Meeting that is not on the proxy card, the proxies will vote your shares, under your proxy, according to their best judgment.
How does the Board recommend that I vote?
Our Board unanimously recommends that stockholders vote “FOR” the Reverse Split Proposal.
What is the difference between holding shares as a shareholder of record and as a beneficial owner?
Certain of our Shareholders hold their shares in an account at a brokerage firm, bank or other nominee holder, rather than holding share certificates in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.
Shareholder of Record/Registered Shareholders
If, on the Record Date, your shares were registered directly in your name with our transfer agent, Vstock Transfer, you are a “Shareholder of record” and we are sending these proxy materials directly to you. As the Shareholder of record, you have the right to direct the voting of your shares by returning the enclosed proxy card to us. Whether or not you plan to attend the Meeting, please complete, date and sign the enclosed proxy card to ensure that your vote is counted.
Beneficial Owner
If, on the Record Date, your shares were held in an account at a brokerage firm or at a bank or other nominee holder, you are considered the beneficial owner of shares held “in street name,” and these proxy materials are being forwarded to you by your broker or nominee who is considered the Shareholder of record for purposes of voting at the Meeting. As the beneficial owner, you have the right to direct your broker on how to vote your shares and to attend the Meeting. However, since you are not the Shareholder of record, you may not vote these shares in person unless you receive a valid proxy from your brokerage firm, bank or other nominee holder. To obtain a valid proxy, you must make a special request of your brokerage firm, bank or other nominee holder. If you do not make this request, you can still vote by using the voting instruction card enclosed with this proxy statement.
How do I vote?
If you were a stockholder of record of the common stock on the Record Date, you may vote in any of the methods described below. Each share of common stock entitles the holder thereof to one vote on the proposal.
You may vote in one of three ways:
| ● | Over the Internet |
If your shares are registered in your name: Vote your shares over the Internet by accessing the proxy online voting website at: www.proxyvote.com and following the on-screen instructions. You will need the control numbers that appear on your proxy card when you access the web page.
If your shares are held in the name of a broker, bank or other nominee: Vote your shares over the Internet by following the voting instructions that you receive from such broker, bank or other nominee.
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| ● | By Telephone |
If your shares are registered in your name: Vote your shares over the telephone by accessing the telephone voting system toll-free at 1-800-690-6903 in the United States and from foreign countries using any touch-tone telephone and following the telephone voting instructions. The telephone instructions will lead you through the voting process. You will need the Company number, account and control numbers that appear on your proxy card.
| ● | By Mail |
Vote by signing and dating the proxy card(s) and returning the card(s) in the prepaid envelope.
If we receive your proxy card prior to this Meeting and if you mark your voting instructions on the proxy card, your shares will be voted:
| i. | as you instruct; and |
| ii. | according to the best judgment of the appointed Proxy if a proposal comes up for a vote at this Meeting that is not on the proxy card. |
If you return a signed card, but do not provide voting instructions, your shares will be voted:
| ● | FOR the Reverse Stock Split; | |
| ● | According to the best judgment of Dr. Doong if a proposal comes up for a vote at the Meeting that is not on the proxy card. |
If I plan on attending the Meeting, should I return my proxy card?
Yes. Whether or not you plan to attend the Meeting, after carefully reading and considering the information contained in this proxy statement, please complete and sign your proxy card. Then return the proxy card in the pre-addressed, postage-paid envelope provided herewith as soon as possible, but prior to 11:59 p.m. EST on July 6, 2023, so your shares may be represented at the Meeting. There will not be any voting at the Meeting.
May I change my mind after I return my proxy?
Yes. You may revoke your proxy and change your vote at any time before the polls close at this Meeting. You may do this by:
| ● | sending a written notice to the Secretary of the Company at the Company’s executive offices stating that you would like to revoke your proxy of a particular date; or | |
| ● | signing another proxy card with a later date and returning it to the Secretary before the polls close at this Meeting. |
What does it mean if I receive more than one proxy card?
You may have multiple accounts at the transfer agent and/or with brokerage firms. Please sign and return all proxy cards to ensure that all of your shares are voted.
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What happens if I do not indicate how to vote my proxy?
Signed and dated proxies received by the Company without an indication of how the Shareholder desires to vote on a proposal will be voted in favor of the Reverse Split Proposal.
Will my shares be voted if I do not sign and return my proxy card?
If you do not sign and return your proxy card, your shares will not be voted.
How many votes are required to approve the Reverse Split Proposal?
The proposal to grant the Board authority to implement one or more reverse stock splits requires the affirmative vote of a majority of the votes cast at the Meeting by the holders of shares of Common Stock entitled to vote.
Is my vote kept confidential?
Proxies, ballots and voting tabulations identifying Shareholders are kept confidential and will not be disclosed, except as may be necessary to meet legal requirements.
Where do I find the voting results of this Meeting?
We will announce voting results at this Meeting and also file a Current Report on Form 8-K with the Securities and Exchange Commission (the “SEC”) reporting the voting results.
Who can help answer my questions?
You can contact Yvonne Chen at info@ambrivis.com or by sending a letter to the offices of the Company at 44370 Old Warm Springs Blvd., Fremont, CA 94538 with any questions about the proposal described in this proxy statement or how to execute your vote.
WHERE CAN I GET A COPY OF THE PROXY MATERIALS?
Copies of the proxy card and the Notice and this Proxy Statement are available on our Company’s website at http://www.abvcpharma.com. The contents of that website are not a part of this Proxy Statement.
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We are furnishing this proxy statement to you, as a shareholder of ABVC BioPharma, Inc., as part of the solicitation of proxies by our Board for use at the Meeting to be held on July 7, 2023, and any adjournment or postponement thereof. This proxy statement is first being furnished to Shareholders on or about June 21, 2023. This proxy statement provides you with information you need to know to be able to vote.
Date, Time and Place of the Meeting
The Meeting will be held virtually on July 7, 2023, at 9:00 p.m., local time in Taiwan/9:00 a.m. EST, or such other date, time and place to which the Meeting may be adjourned or postponed.
At the Meeting, the Company will ask Shareholders to consider and vote upon the following proposal:
| 1. | To approve granting the Board the authority to effect one or more reverse splits of the Company’s issued and outstanding Common Stock by a ratio of up to one-for-fifteen, at any time or from time to time, prior to July 7, 2024, with the exact timing and amount of each split to be determined by the Board in its sole discretion (the “Reverse Split Proposal”). |
Our Board fixed the close of business on May 26, 2023, as the record date for the determination of the outstanding shares of Common Stock entitled to notice of, and to vote on, the matters presented at this Meeting. As of the Record Date, there were 33,080,740 shares of Common Stock outstanding. Each share of Common Stock entitles the holder thereof to one vote. Accordingly, a total of 33,080,740 votes may be cast at this Meeting.
A quorum of Shareholders is necessary to hold a valid meeting. The presence in person or by proxy of the holders of a majority of the shares entitled to vote thereat constitutes a quorum. Abstentions and broker non-votes (i.e. shares held by brokers on behalf of their customers, which may not be voted on certain matters because the brokers have not received specific voting instructions from their customers with respect to such matters) will be counted solely for the purpose of determining whether a quorum is present at the Meeting.
The Reverse Split Proposal requires the affirmative vote of the majority of the shares present in person or represented by proxy at the Meeting and entitled to vote thereon. Abstentions and broker non-votes will have no direct effect on the outcome of this proposal; and
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Any proxy may be revoked by the shareholder of record giving it at any time before it is voted. A proxy may be revoked by (A) sending to our Secretary, at ABVC BioPharma, Inc., 44370 Old Warm Springs Blvd., Fremont, CA 94538, USA, either (i) a written notice of revocation bearing a date later than the date of such proxy or (ii) a subsequent proxy relating to the same shares.
If the shares are held by the broker or bank as a nominee or agent, the beneficial owners should follow the instructions provided by their broker or bank.
The cost of preparing, assembling, printing and mailing this proxy statement and the accompanying form of proxy, and the cost of soliciting proxies relating to this Meeting, will be borne by the Company. If any additional solicitation of the holders of our outstanding shares of Common Stock is deemed necessary, we (through our directors and officers) anticipate making such solicitation directly. The solicitation of proxies by mail may be supplemented by telephone, telegram and personal solicitation by officers, directors and other employees of the Company, but no additional compensation will be paid to such individuals.
Under Nevada law, the Company’s stockholders are not entitled to appraisal rights in connection with the proposal to be acted upon at the Meeting.
Who Can Answer Your Questions about Voting Your Shares
You can contact Yvonne Chen at info@ambrivis.com or by sending a letter to the offices of the Company at 44370 Old Warm Springs Blvd., Fremont, CA 94538, USA, with any questions about the proposal described in this proxy statement or how to execute your vote.
The principal executive offices of our Company are located at 44370 Old Warm Springs Blvd., Fremont, CA 94538. The Company’s telephone number at such address is 510-668-0881.
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Beneficial Ownership
The following table sets forth certain information regarding beneficial ownership of our common stock as of the Record Date (i) each person (or group of affiliated persons) who is known by us to own more than five percent (5%) of the outstanding shares of our common stock, (ii) each director, executive officer and director nominee, and (iii) all of our directors, executive officers and director nominees as a group.
Beneficial ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities. For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of common stock that such person has the right to acquire within 60 days of the date of the respective table. For purposes of computing the percentage of outstanding shares of our common stock held by each person or group of persons named above, any shares that such person or persons has the right to acquire within 60 days of the date of the respective table is deemed to be outstanding for such person, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership.
Unless otherwise noted, the business address of each beneficial owner listed is 44370 Old Warm Springs Blvd., Fremont, CA 94538. Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to the extent that power may be shared with a spouse.
As of the Record Date, we had 33,080,740 shares of common stock issued and outstanding.
| Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | ||||||
| Dr. Howard Doong | 18,404 | * | % | |||||
| Eugene Jiang (1) | 702,246 | 2.3 | % | |||||
| Leeds Chow | 2,728 | * | ||||||
| Chi-Hsin (Richard) King | 869 | * | ||||||
| Yen-Hsin Chou | 5,679 | * | ||||||
| Hsin-Hui Miao | - | * | ||||||
| Dr. Tsang-Ming Jiang | 6,067 | * | ||||||
| Norimi Sakamoto | 4,667 | * | ||||||
| Dr. Tsung-Shann Jiang (2)(4) | 11,980,752 | 36.2 | % | |||||
| Dr. Chang-Jen Jiang (3) | 5,545 | * | ||||||
| Yoshinobu Odaira | 163,702 | * | ||||||
| Che-Wei Hsu | 3,346 | * | ||||||
| Shuling Jiang | - | * | ||||||
| Yu-Min Chung | 5,556 | * | ||||||
| All officers and directors as a group (Fourteen (14) persons) | 12,899,540 | 39.0 | % | |||||
| YuanGene Corporation (4) | 8,296,968 | 25.1 | % | |||||
| * | less than 1%. |
| (1) | Eugene Jiang held 673,189 shares of the Company’s common stock through his ownership in AsianGene, 3,743 shares of the Company’s common stock through his ownership in BioFirst, 121 shares of the Company’s common stock through his ownership in Rgene, and the rest of 25,173 shares through direct ownership. |
| (2) | Dr. Tsung-Shann Jiang held 8,296,968 shares of common stock through his ownership in YuanGene Corporation, 2,277 shares of the Company’s common stock through BioLite, 16,829 shares through Rgene Corporation, 96,364 shares through BioFirst, 674,724 shares through Lion Arts, 509,878 shares through LionGene, 8,850 shares through Genepro Investment, 213,120 shares through Keypoint, and the rest of 2,161,742 shares through direct ownership. |
| (3) | Dr. Chang-Jen Jiang held 939 shares of common stock in the Company through his ownership in BioFirst, 5 shares of the Company’s common stock through Rgene, and the rest of 4,600 shares through direct ownership. |
| (4) | YuanGene Corporation is a company wholly-owned by Lion Arts, which is owned by Shu-Ling Chiang (80%) and Dr. Tsung-Shann Jiang (20%); however, YuanGene appointed Eugene Jiang to have sole voting control over the shares held by YuanGene, the principal office address of which is 2nd floor, Building B, SNPF Plaza, Savalalo, Apia, Samoa. |
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PROPOSAL NO. 1 — REVERSE STOCK SPLIT
Purpose of the Reverse Stock Split
The Board is submitting the proposed reverse stock split to our shareholders for approval in order to reduce the number of issued and outstanding shares and to increase the per share trading value of our Common Stock. The Board of Directors believes that our Common Stock is undervalued and that a reverse split will allow the Common Stock to trade at a more realistic price. The Board believes that the proposed reverse stock split is desirable and should be approved by our shareholders for a number of reasons, including, without limitation, the following:
| ● | The reverse stock split could potentially increase the per share trading value of our Common Stock, however there is no guarantee of that. |
| ● | If we are successful in maintaining a higher stock price, it may improve the perception of our Common Stock as an investment security and may generate greater interest among a broader range of institutional and other professional investors and institutions in us, as we have been advised that the current market price of our Common Stock may affect its acceptability to certain members of the investing public. Many institutional investors have policies prohibiting them from holding lower-priced stocks in their portfolios, which reduces the number of potential purchasers of our Common Stock. Investment funds may also be reluctant to invest in lower-priced stocks. 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. Giving the Board of Directors the ability to effect a reverse stock split, and thereby potentially increase the price of our Common Stock, would give the Board the ability to address these issues if it is deemed necessary. | |
| ● | The Board believes that the increased market price of the Common Stock, which may potentially be the result of implementing the reverse stock split could improve the marketability of our Common Stock, which could allow us to raise additional capital. | |
| ● | The reverse stock split could decrease price volatility for our Common Stock, as small price movements currently may cause relatively large percentage changes in our stock price. | |
| ● | The reverse stock split may help increase analyst and broker interest in our stock as their policies can discourage them from following or recommending companies with lower stock prices. Because of the trading volatility often associated with lower-priced stocks, many brokerage houses and institutional investors have adopted internal policies and practices that either prohibit or discourage them from investing in such stocks or recommending them to their customers. | |
| ● | A higher market price per share for our Common Stock may help us attract and retain employees because some potential employees are less likely to work for a company with a low stock price, regardless of our market capitalization. |
Accordingly, for these reasons, we believe that effecting the reverse stock split could be in our and our shareholders’ best interests.
Reducing the number of outstanding shares of our Common Stock through the reverse stock split is intended, absent other factors, to increase the per share market price of our Common Stock. A number of the anticipated benefits of the proposed reverse stock split discussed above are contingent upon the split resulting in an increase in the per share market price of our Common Stock. However, other factors, such as our financial results, market conditions and the market perception of our business may adversely affect the market price of our Common Stock. As a result, there can be no assurance that the reverse stock split, if completed, would result in the intended benefits described above, that the market price of our Common Stock will increase following the reverse stock split or that the market price of our Common Stock will not decrease in the future. Additionally, we cannot assure you that the market price per share of our Common Stock after a reverse stock split will increase in proportion to the reduction in the number of shares of our Common Stock outstanding before the reverse stock split. Accordingly, the total market capitalization of our Common Stock after the reverse stock split may be lower than the total market capitalization before the reverse stock split.
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Certain Risks Associated with the Reverse Stock Split
The reverse stock split may not increase the price of the Common Stock.
Although the Board expects that a reverse stock split will result in an increase in the price of our Common Stock, the effect of a reverse stock split cannot be predicted with certainty. Other factors, such as our financial results, market conditions and the market perception of our business, may adversely affect the stock price. As a result, there can be no assurance that the reverse stock split, if completed, will result in any of the intended benefits described above, that the stock price will increase as a result of or following the reverse stock split (or will increase in the same proportion as the final reverse stock split ratio) or that the stock price will not decrease in the future.
Moreover, a decline in the market price of the Common Stock after the reverse stock split may result in a greater percentage decline than would occur in the absence of the reverse stock split. The market price of the Common Stock is based on our performance and other factors, which are unrelated to the number of shares of Common Stock outstanding.
If the reverse stock split is implemented, the resulting per-share price may not attract institutional investors, investment funds or brokers and may not satisfy the investing guidelines of these investors or brokers, and consequently, the trading liquidity of our Common Stock may not improve.
While we believe that a higher share price may help generate investor and broker interest in the Common Stock, the reverse stock split may not result in a share price that will attract institutional investors or investment funds or satisfy the investing guidelines of institutional investors, investment funds or brokers. For example, some investors, analysts and other stock market participants have a negative perception of reverse stock splits due to: (1) the fact that the share price of some companies that have effected reverse stock splits has subsequently declined in share price and corresponding market capitalization, (2) the potential that the reduction in shares outstanding could have adversely impact the liquidity of our Common Stock; and (3) the costs associated with implementing a reverse stock split.
The reverse stock split may leave certain shareholders with “odd lots.”
The reverse stock split may result in some shareholders owning “odd lots” of fewer than 100 shares. Odd lot shares may be more difficult to sell, and brokerage commissions and other costs of transactions in odd lots are generally somewhat higher than the costs of transactions in “round lots” of even multiples of 100 shares.
Board Discretion to Determine the Effective Date of the Reverse Stock Split
The Board believes that shareholder approval for the Board to determine when and how many reverse stock splits to implement is in the best interests of our shareholders because it provides the Board with the flexibility to achieve the desired results of the reverse stock split and because it is not possible to predict when the market conditions would be ideal to implement it. If shareholders approve this proposal, the Board would have the authority, but not the obligation, in its sole discretion and without any further action on the part of the shareholders, to carry out a reverse stock split one or more occasions, but only upon the Board’s determination that a reverse stock split would be in the best interests of our shareholders at that time. The reverse stock splits, if implemented, would be effected at a time that the Board determines to be most advantageous to us and to our shareholders by considering then-relevant market conditions. In determining to implement the reverse stock ratio, following receipt of shareholder approval, the Board may consider, among other things:
| ● | the historical prices and trading volume of our Common Stock; |
| ● | the then-prevailing trading price and trading volume of our Common Stock and the anticipated impact of the reverse stock split on the trading market for our Common Stock; |
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| ● | the aggregate market value of our Common Stock held by non-affiliates; |
| ● | the outlook for the trading price of our Common Stock; |
| ● | threshold prices of brokerage houses or institutional investors that could impact their ability to invest or recommend investments in our Common Stock; |
| ● | our shareholders’ equity at such time; and |
| ● | prevailing general market and economic conditions. |
Although approval of this proposal would provide the Board with the authority to determine when to implement a reverse stock split, the Board is not obligated to do so. If the Board is to determine to implement a reverse stock split, it will determine a date which it believes would be most likely to achieve the anticipated benefits of the Reverse Stock Split described above. Notwithstanding the approval of the Reverse Split Proposal by our shareholders, the Board may, in its sole discretion, select not to effect a reverse stock split. In the event that the Board does not effect any reverse stock splits on or before July 7, 2024, the authority granted to the Board of Directors in this proposal will terminate.
Our directors and executive officers have no substantial interests, directly or indirectly, in the matters set forth in this proposed amendment, except to the extent of their ownership in shares of our Common Stock and securities convertible or exercisable for Common Stock.
Procedures for Effecting the Reverse Stock Split
If our shareholders approve the Reverse Split Proposal, the Board will have discretion to determine when to effect it and how many to effect at any time on or prior to July 7, 2024, the first anniversary date of this Special Meeting. If implemented by the Board, the reverse stock split would become effective upon the date, as approved by the Board by Board resolution, to be the effective date of the Reverse Stock Split pursuant to the authority granted by the shareholders. The actual timing of the effective date of the Reverse Stock Split will be made by the Board at such time as the Board believes to be most advantageous to us and our shareholders.
Principal Effects of the Reverse Split
On the effective date of a reverse stock split, depending upon the final ratio the Board chooses, each such number of shares of our Common Stock issued and outstanding immediately prior to the Reverse Split on the effective date (the “Old Shares”) will automatically and without any action on the part of the stockholders be converted into one share of our Common Stock (the “New Shares”). For example, if the Board chooses to implement a 1-for-15 Reverse Split, every 15 shares would be combined into 1 share.
The Board has sole discretion to determine the final ratio that will be implemented, if at all, but we believe the following discussion is more helpful by assuming and selecting a ratio. For illustrative purposes only, in the following discussion, we provide examples of the effects of a one-for-fifteen reverse stock split should the Board decide on a 1-for-15 ratio. If approved, the Board will have discretion to select any ratio up to one-for-fifteen.
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Corporate Matters. The Reverse Split would have the following effects based upon the number of shares of Common Stock outstanding as of the Record Date:
| ● | in a one-for-fifteen reverse stock split, every 15 of our Old Shares owned by a stockholder would be exchanged for one New Share; and |
| ● | the number of shares of our Common Stock issued and outstanding will be reduced from 33,080,740 shares to 2,205,383 shares. |
The Reverse Split will be effected simultaneously for all of our outstanding shares of Common Stock and the exchange ratio will be the same for all of our outstanding shares Common Stock. The Reverse Split will affect all of our stockholders uniformly and will not affect any stockholder’s percentage ownership interests in the Company, except to the extent that the Reverse Split results in any of our stockholders owning a fractional share. Common Stock issued pursuant to the Reverse Split will remain fully paid and non-assessable.
Fractional Shares. No scrip or fractional share certificates will be issued in connection with the Reverse Split. Stockholders who otherwise would be entitled to receive fractional shares because they hold a number of Old Shares not evenly divisible by the one for ten reverse stock split ratio, will be entitled, upon surrender of certificate(s) representing these shares, to a number of shares of New Shares rounded up to the nearest whole number. The ownership of a fractional interest will not give the stockholder any voting, dividend or other rights except to have his or her fractional interest rounded up to the nearest whole number when the New Shares are issued.
Authorized Shares. The Company is presently authorized under its Articles of Incorporation to issue 100,000,000 shares of Common Stock, $0.001 par value per share. A reverse stock split will not have any effect on the Company’s authorized capital or number of shares that will be available for issuance after a reverse stock split. The issuance in the future of additional shares of our Common Stock may have the effect of diluting the earnings per share and book value per share, as well as the stock ownership and voting rights of the currently outstanding shares of our Common Stock. Authorized but unissued shares will be available for issuance, and we may issue such shares in future financings or otherwise. If we issue additional shares, the ownership interest of holders of our Common Stock would be diluted. Also, the issued shares may have rights, preferences or privileges senior to those of our Common Stock.
Outstanding Derivative Securities. A reverse stock split will require that proportionate adjustments be made to the conversion rate, the per share exercise price and the number of shares issuable upon the exercise, vesting or conversion of the following outstanding derivative securities issued by us, in accordance with the split ratio (all figures are as of the Record Date and are on a pre-Reverse Stock Split basis), including:
| ● | 2,587,104 shares of common stock issuable upon the exercise of stock options, at a weighted average exercise price of $2.79 per share under the Amended and Restated 2016 Equity Incentive Plan; |
| ● |
2,160,000 shares of common stock issuable upon exercise of outstanding warrants with an exercise price of $2.45 per share; and |
| ● | 5,503,334 shares of common stock issuable upon exercise of outstanding warrants with an exercise price of $1.05 per share. |
The adjustments to the above securities, as required by a reverse stock split and in accordance with the split ratio, would result in approximately the same aggregate price being required to be paid under such securities upon exercise, and approximately the same value of shares of Common Stock being delivered upon such exercise or conversion, immediately following a reverse stock split as was the case immediately preceding the reverse stock split.
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Accounting Matters. The Reverse Split will not affect the par value of our Common Stock. As a result, on the effective date of the Reverse Split, the stated capital on our balance sheet attributable to our Common Stock will be reduced in proportion to the Reverse Split ratio (that is, in a one-for-fifteen reverse stock split, the stated capital attributable to our Common Stock will be reduced to one tenth of its existing amount) and the additional paid-in capital account shall be credited with the amount by which the stated capital is reduced. The per share net income or loss and net book value of our Common Stock will also be increased because there will be fewer shares of our Common Stock outstanding.
Potential Anti-Takeover Effect. Although the issuance of additional shares of Common Stock could, under certain circumstances, have an anti-takeover effect (for example, by permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the composition of our Board or contemplating a tender offer or other transaction for the combination of the Company with another company), the Reverse Split was not proposed in response to any effort of which we are aware to accumulate our shares of Common Stock or obtain control of us, nor is it part of a plan by management to recommend a series of similar actions having an anti-takeover effect to our Board of Directors and stockholders. Other than the Reverse Split Proposal, our Board of Directors does not currently contemplate recommending the adoption of any other corporate action that could be construed to affect the ability of third parties to take over or change control of the Company.
The number of shares held by each individual stockholder will be reduced if a reverse stock split is implemented. This will increase the number of stockholders who hold less than a “round lot,” or 50 shares. Typically, the transaction costs to stockholders selling “odd lots” are higher on a per share basis. Consequently, a reverse stock split could increase the transaction costs to existing stockholders in the event they wish to sell all or a portion of their shares.
The Company is subject to the periodic reporting and other requirements of the Exchange Act. The proposed reverse stock split(s) will not affect the registration of the Common Stock under the Exchange Act. If a proposed reverse stock split is implemented, our Common Stock will continue to be reported on The Nasdaq Capital Market under the ticker symbol “ABVC” , subject to compliance with applicable listing standards. We will continue to be subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended.
Procedure for Effecting a Reverse Split and Exchange of Stock Certificates
A reverse stock split will be accomplished by amending the Company’s Articles of Incorporation to include a paragraph in substantially the same form as follows:
“As of [ ], (the “Effective Time”), each [ ] shares of Common Stock either issued and outstanding or held by the Corporation as treasury stock shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) share of Common Stock (the “Reverse Stock Split”). No fractional shares shall be issued in connection with the Reverse Stock Split. All shares of Common Stock (including fractions thereof) issuable upon the Reverse Stock Split to a given holder shall be aggregated for purposes of determining whether the Reverse Stock Split would result in the issuance of a fractional share. If, after the aforementioned aggregation, the Reverse Stock Split would result in the issuance of a fraction of a share of Common Stock, the Corporation shall, in lieu of issuing any such fractional share, round up to the nearest whole number of shares in order to bring the number of shares held by such holder up to the next whole number of shares of Common Stock. No certificates representing fractional shares of Common Stock shall be issued in connection with the Reverse Stock Split. Each certificate that immediately prior to the Effective Time represented shares of Common Stock (“Old Certificates”) shall thereafter represent the number of shares of Common Stock into which the shares of Common Stock represented by the Old Certificate shall have been combined, subject to the elimination of fractional share interests as described above.”
A copy of the form of Articles of Amendment of the Articles of Incorporation of the Company (“Amendment”) is attached hereto as Appendix A.
Any reverse stock split will become effective at such future date as determined by the Board of Directors, as evidenced by the filing of an Amendment with the Secretary of State of the State of Nevada (which we refer to as the “Effective Time”), but in no event later than July 7, 2024. Beginning at the Effective Time, each certificate representing Old Shares will be deemed for all corporate purposes to evidence ownership of New Shares.
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As soon as practicable after the Effective Time, stockholders will be notified that a reverse stock split has been effected. The existing stock certificates will still be valid even though they reflect the number of Old Shares. If any stockholders seek to obtain a new certificate reflecting the number of New Shares, then such stockholders shall surrender to the exchange agent the certificates representing Old Shares in exchange for certificates representing New Shares accordance with the procedures to be set forth in a cover letter asking for such stock certificates. The Company’s transfer agent, VStock Transfer, LLC charges stockholders a fee of $35 for each certificate issued representing New Shares and $10 for cancelling each certificate representing Old Shares, plus mailing fees. A shareholder is not required to exchange their stock certificate.
After the effective date of a reverse stock split, the CUSIP number for our Common Stock will change.
STOCKHOLDERS SHOULD NOT DESTROY
ANY STOCK CERTIFICATE(S)
AND SHOULD NOT SUBMIT ANY CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
Material U.S. Federal Income Tax Consequences of the Reverse Split
The following is a discussion of certain material U.S. federal income tax consequences of a reverse stock split that are applicable to U.S. holders (as defined below) of the Company’s Common Stock, but does not purport to be a complete analysis of all potential tax effects. This summary is based upon current provisions of the Internal Revenue Code (the “Code”), existing treasury regulations, judicial decisions, and published rulings and administrative pronouncements of the Internal Revenue Service (the “IRS”), all in effect as of the date hereof and all of which are subject to differing interpretations or change. Any such change or differing interpretation, which may be retroactive, could alter the tax consequences to the Company’s stockholders as described in this summary.
This discussion does not address all U.S. federal income tax consequences relevant to the Company’s stockholder. In addition, it does not address consequences relevant to the Company’s stockholders that are subject to particular U.S. or non-U.S. tax rules, including, without limitation to the Company’s stockholders that are:
| ● | persons who do not hold their Common Stock as a “capital asset” within the meaning of Section 1221 of the Code; |
| ● | brokers, dealers or traders in securities; banks; insurance companies; other financial institutions; mutual funds; |
| ● | real estate investment trusts; regulated investment companies; tax-exempt organizations or governmental organizations; |
| ● | pass-through entities such as partnerships, S corporations, disregarded entities for federal income tax purposes and limited liability companies (and investors therein); |
| ● | persons who are not U.S. holders (as defined below); |
| ● | stockholders who are subject to the alternative minimum tax provisions of the Code; |
| ● | persons who hold their shares as part of a hedge, wash sale, synthetic security, conversion transaction, or other integrated transaction; |
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| ● | persons that have a functional currency other than the U.S. dollar; traders in securities who elect to apply a mark-to-market method of accounting; |
| ● | persons who hold shares of the Company’s Common Stock that may constitute “qualified small business stock” under Section 1202 of the Code or as “Section 1244 stock” for purposes of Section 1244 of the Code; |
| ● | persons who elect to apply the provisions of Section 1400Z-2 to any gains realized in the Reverse Split; |
| ● | persons who acquired their shares of the Company’s Common Stock in a transaction subject to the gain rollover provisions of Section 1045 of the Code; |
| ● | persons subject to special tax accounting rules as a result of any item of gross income with respect to the Company’s Common Stock being taken into account in an “applicable financial statement” (as defined in the Code); |
| ● | persons deemed to sell the Company’s Common Stock under the constructive sale provisions of the Code; |
| ● | persons who acquired their shares of stock pursuant to the exercise of options or otherwise as compensation or through a tax-qualified retirement plan or through the exercise of a warrant or conversion rights under convertible instruments; and |
| ● | certain expatriates or former citizens or long-term residents of the United States. |
The Company’s stockholders subject to particular U.S. or non-U.S. tax rules that are described in this paragraph are urged to consult their own tax advisors regarding the consequences to them of the Reverse Split.
If an entity that is treated as a partnership for U.S. federal income tax purposes holds the Company’s Common Stock, the U.S. federal income tax treatment of a partner in the partnership will generally depend upon the status of the partner, the activities of the partnership and certain determinations made at the partner level. If you are a partnership or a partner of a partnership holding the Company’s capital stock or any other person not addressed by this discussion, you should consult your tax advisors regarding the tax consequences of the Reverse Split.
In addition, the following discussion does not address: (a) the tax consequences of transactions effectuated before, after or at the same time as the Reverse Split, whether or not they are in connection with the Reverse Split; (b) any U.S. federal non-income tax consequences of the Reverse Split, including estate, gift or other tax consequences; (c) any state, local or non-U.S. tax consequences of the Reverse Split; or (d) the Medicare contribution tax on net investment income. No ruling from the IRS or opinion of counsel, has been or will be requested in connection with the Reverse Split. The Company’s stockholders should be aware that the IRS could adopt a position which could be sustained by a court contrary to that set forth in this discussion.
Definition of “U.S. Holder”
For purposes of this discussion, a “U.S. holder” is a beneficial owner of the Company’s Common Stock that is, for U.S. federal income tax purposes:
| ● | an individual who is a citizen or resident of the United States; |
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| ● | a corporation or any other entity taxable as a corporation created or organized in or under the laws of the United States, any state thereof, or the District of Columbia; |
| ● | a trust if either (i) a court within the United States is able to exercise primary supervision over the administration of such trust, and one or more United States persons (within the meaning of Section 7701(a)(30) of the Code) are authorized or have the authority to control all substantial decisions of such trust, or (ii) the trust was in existence on August 20, 1996 and has a valid election in effect under applicable Treasury Regulations to be treated as a United States person for U.S. federal income tax purposes; or |
| ● | an estate, the income of which is subject to U.S. federal income tax regardless of its source. |
Tax Consequences of a Reverse Stock Split
A reverse stock split should constitute a “recapitalization” for U.S. federal income tax purposes within the meaning of Section 368(a) of the Code. As a result, a U.S. holder generally should not recognize gain or loss upon the Reverse Split, except with respect to cash received in lieu of a fractional share of the Company’s Common Stock (which fractional share will be treated as received and then exchanged for such cash). A U.S. holder’s aggregate tax basis in the shares of the Company’s Common Stock received pursuant to the Reverse Split should equal the aggregate tax basis of the shares of the Company’s Common Stock surrendered (excluding any portion of such basis that is allocated to any fractional share of the Company’s Common Stock), and such U.S. holder’s holding period in the shares of the Company’s Common Stock received should include the holding period in the shares of the Company’s Common Stock surrendered. Treasury Regulations provide detailed rules for allocating the tax basis and holding period of the shares of the Company’s Common Stock surrendered to the shares of the Company’s Common Stock received in a recapitalization pursuant to the Reverse Split. U.S. holders of shares of the Company’s Common Stock acquired on different dates and at different prices should consult their tax advisors regarding the allocation of the tax basis and holding period of such shares.
A U.S. holder that receives cash in lieu of a fractional share of the Company Common Stock pursuant to the Reverse Split should recognize capital gain or loss in an amount equal to the difference between the amount of cash received and the U.S. holder’s tax basis in the shares of the Company’s Common Stock surrendered that is allocated to such fractional share of the Company’s Common Stock. Any such gain or loss generally will be long-term capital gain or loss if, as of the effective time of the Reverse Split, the U.S. holder’s holding period for such fractional share exceeds one year. Long-term capital gains of certain non-corporate taxpayers, including individuals, are generally taxed at preferential rates. The deductibility of capital losses is subject to limitations.
Information Reporting and Backup Withholding
Payments of cash made in lieu of a fractional share of the Company’s Common Stock may, under certain circumstances, be subject to information reporting and backup withholding. Backup withholding will not apply, however, to a U.S. holder who (i) furnishes a correct taxpayer identification number and certifies the holder is not subject to backup withholding on IRS Form W-9 or a substantially similar form, or (ii) certifies the holder is otherwise exempt from backup withholding. If a U.S. holder does not provide a correct taxpayer identification number on IRS Form W-9 or other proper certification, the stockholder may be subject to penalties imposed by the IRS. Any amounts withheld under the backup withholding rules may be refunded or allowed as a credit against the federal income tax liability of a U.S. holder of the Company’s capital stock, if any, provided the required information is timely furnished to the IRS. The Company’s stockholders should consult their tax advisors regarding their qualification for an exemption from backup withholding, the procedures for obtaining such an exemption, and in the event backup withholding is applied, to determine if any tax credit, tax refund or other tax benefit may be obtained.
Because of the complexity of the tax laws and because the tax consequences to the Company or to any particular stockholder may be affected by matters not discussed herein, stockholders are urged to consult their own tax advisors as to the specific tax consequences to them in connection with the Reverse Split, including tax reporting requirements, the applicability and effect of foreign, U.S. federal, state and local and other applicable tax laws and the effect of any proposed changes in the tax laws.
The proposal to grant the Board authority to implement one or more reverse stock splits and file the Certificate of Amendment regarding same requires the affirmative vote of a majority of the votes cast at the Meeting by the holders of shares of Common Stock entitled to vote. Abstentions and broker non-votes will have no effect on the result of the vote.
The Board unanimously recommends that you vote all of your shares “FOR” the Reverse Stock Proposal described in this Proposal No. 1.
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OTHER MATTERS
Our Board knows of no other matter to be presented at the Meeting. If any additional matter should properly come before the Meeting, it is the intention of the persons named in the enclosed proxy to vote such proxy in accordance with their judgment on any such matters.
Electronic Delivery Of Future Shareholder Communications
Registered shareholders can further save the Company expense by consenting to receive all future proxy statements, forms of proxy and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please access the website www.proxyvote.com when transmitting your voting instructions and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years. Your choice will remain in effect unless and until you revoke it.
To revoke your decision to receive or access shareholder communications electronically, access the website www.proxyvote.com, enter your current PIN, select “Cancel my Enrollment” and click on the Submit button. After submitting your entry, the Cancel Enrollment Confirmation screen will be displayed. This screen will show your current Enrollment Number. To confirm your enrollment cancellation, click on the Submit button. Otherwise, click on the Back button to return to the Enrollment Maintenance screen. After submitting your entry, the Cancel Enrollment Complete screen will be displayed. This screen will indicate that your enrollment has been cancelled. You may be asked to complete a brief survey to help us understand why you opted out of electronic delivery. You will be sent an e-mail message confirming the cancellation of your enrollment. No further electronic communications will be conducted for your account and your Enrollment Number will be marked as “Inactive.” You may at any time reactivate your enrollment. You will be responsible for any fees or charges that you would typically pay for access to the Internet.
The solicitation of proxies is made on behalf of the Board and we will bear the cost of soliciting proxies. Proxies may be solicited through the mail and through telephonic or telegraphic communications to, or by meetings with, Shareholders or their representatives by our directors, officers and other employees who will receive no additional compensation therefor. We may also retain a proxy solicitation firm to assist us in obtaining proxies by mail, facsimile or email from record and beneficial holders of shares for the Meeting. If we retain a proxy solicitation firm, we expect to pay such firm reasonable and customary compensation for its services, including out-of-pocket expenses.
We request persons such as brokers, nominees and fiduciaries holding stock in their names for others, or holding stock for others who have the right to give voting instructions, to forward proxy material to their principals and to request authority for the execution of the proxy. We will reimburse such persons for their reasonable expenses.
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Delivery of Proxy Materials to Households
Only one copy of this proxy statement is being delivered to multiple registered Shareholders who share an address unless we have received contrary instructions from one or more of the Shareholders. A separate form of proxy and a separate notice of the Meeting are being included for each account at the shared address. Registered Shareholders who share an address and would like to receive a separate copy of this proxy statement, or have questions regarding the householding process, may contact the Company’s transfer agent: Vstock Transfer, LLC, by calling (212) 828-8436, or by forwarding a written request addressed to Vstock Transfer, LLC, 18 Lafayette Place, Woodmere, NY 11598. Promptly upon request, a separate copy of this proxy Statement will be sent. By contacting Vstock Transfer, LLC, registered Shareholders sharing an address can also (i) notify the Company that the registered Shareholders wish to receive separate annual reports to Shareholders, proxy statements and/or Notices of Internet Availability of Proxy Materials, as applicable, in the future or (ii) request delivery of a single copy of annual reports to Shareholders and proxy statements in the future if registered Shareholders at the shared address are receiving multiple copies.
Many brokers, brokerage firms, broker/dealers, banks and other holders of record have also instituted “householding” (delivery of one copy of materials to multiple Shareholders who share an address). If your family has one or more “street name” accounts under which you beneficially own shares of our Common Stock, you may have received householding information from your broker, brokerage firm, broker/dealer, bank or other nominee in the past. Please contact the holder of record directly if you have questions, require additional copies of this proxy statement or wish to revoke your decision to household and thereby receive multiple copies. You should also contact the holder of record if you wish to institute householding.
Where You Can Find Additional Information
The Company is subject to the informational requirements of the Exchange Act and in accordance therewith files reports, proxy statements and other information with the SEC. Such reports, proxy statements and other information are available on the SEC’s website at www.sec.gov. Shareholders who have questions in regard to any aspect of the matters discussed in this proxy statement should contact Leeds Chow, our Chief Financial Officer, at info@ambrivis.com or by telephone at 562-774-2958.
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ABVC BIOPHARMA, INC.
July 7, 2023
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held at 9:00 a.m. EST on July 7, 2023
(Record Date – May 26, 2023)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Howard Doong or Tsung-Shann Jiang, as proxy of the undersigned, with full power to appoint his substitute, and hereby authorizes him to represent and to vote all the shares of stock of ABVC BioPharma, Inc. which the undersigned is entitled to vote, as specified below on this card, at the Special Meeting of Shareholders of ABVC BioPharma, Inc. to be held virtually on Zoom on July 7, 2023, at 9:00 a.m., EST, and at any adjournment or postponement thereof.
To attend the virtual Meeting via Zoom, go to: https://us06web.zoom.us/j/87430319309
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION OF THE BOARD OF DIRECTORS FOR THE PROPOSAL. This proxy authorizes the above designated proxy to vote in his discretion on such other business as may properly come before the meeting or any adjournments or postponements thereof to the extent authorized by Rule 14a-4(c) promulgated under the Securities Exchange Act of 1934, as amended.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR”
THE REVERSE SPLIT PROPOSAL.
PLEASE SIGN, DATE AND RETURN PROMPTLY, BEFORE 11:59 P.M. EST ON JULY 6, 2023, IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK
PROPOSAL 1: To approve granting the Board the authority to effect one or more reverse splits of the Company’s issued and outstanding Common Stock by a ratio of up to one-for-fifteen, at any time or from time to time, prior to July 7, 2024, with the exact timing and amount of each split to be determined by the Board in its sole discretion and file a Certificate of Amendment to the Company’s Articles of Incorporation regarding same (the “Reverse Split Proposal”).
| For | Against | Abstain | ||||
| ☐ | ☐ | ☐ |
Please indicate if you intend to attend this meeting ☐ YES ☐ NO
| Signature of Shareholder: | ||||
| Date: | ||||
| Name shares held in (Please print): | Account Number (if any): | |||
| No. of Shares Entitled to Vote: | Stock Certificate Number(s): |
| Note: | Please sign exactly as your name or names appear in the Company’s stock transfer books. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. |
If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such.
If the signer is a partnership, please sign in partnership name by authorized person.
Please provide any change of address information in the spaces below in order that we may update our records:
| Address: | |||
A-1
APPENDIX A
ARTICLES OF AMENDMENT
ABVC BIOPHARMA, INC.
1. This Article of Amendment (the “Article of Amendment”) amends the provisions of the Corporation’s Articles of Incorporation filed with the Secretary of State in November 2001 (the “Certificate of Incorporation”).
2. That the Board of Directors of the Corporation duly adopted resolutions through a unanimous written consent setting forth the following amendment (the “Amendment”) of the Articles of Incorporation of the Corporation, declaring said Amendment to be advisable and calling a meeting of the stockholders of said Corporation for consideration thereof.
3. That thereafter, pursuant to a resolution of its Board of Directors, a special meeting of the stockholders of said Corporation was duly called and held upon notice in accordance with Section 78.310 of Nevada’s Revised Statutes at which meeting the necessary number of shares as required by statute were voted in favor of this Amendment.
4. That the Articles of Incorporation of this Corporation be amended by adding the following paragraph to ARTICLE IV “Authorized Capital”:
“As of [ ]1, (the “Effective Time”), each [ ]2 shares of Common Stock either issued and outstanding or held by the Corporation as treasury stock shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) share of Common Stock (the “Reverse Stock Split”). No fractional shares shall be issued in connection with the Reverse Stock Split. All shares of Common Stock (including fractions thereof) issuable upon the Reverse Stock Split to a given holder shall be aggregated for purposes of determining whether the Reverse Stock Split would result in the issuance of a fractional share. If, after the aforementioned aggregation, the Reverse Stock Split would result in the issuance of a fraction of a share of Common Stock, the Corporation shall, in lieu of issuing any such fractional share, round up to the nearest whole number of shares in order to bring the number of shares held by such holder up to the next whole number of shares of Common Stock. No certificates representing fractional shares of Common Stock shall be issued in connection with the Reverse Stock Split. Each certificate that immediately prior to the Effective Time represented shares of Common Stock (“Old Certificates”) shall thereafter represent the number of shares of Common Stock into which the shares of Common Stock represented by the Old Certificate shall have been combined, subject to the elimination of fractional share interests as described above.”
1 Any date prior to July 7, 2024.
2 The whole number of the final ratio of not more than one-for-fifteen decided on by the Board, in its sole discretion.
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