UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
Check the appropriate box:
| ☒ |
Preliminary Information Statement |
| ☐ |
Confidential, for use of the Commission only (as permitted by Rule 14c-5(d)(2)) |
| ☐ |
Definitive Information Statement |
| |
ELEVAI LABS INC. |
|
| |
(Name of Registrant As Specified In Charter) |
|
Payment of Filing Fee (Check the appropriate box):
| ☐ |
Fee paid previously with preliminary materials. |
| ☐ |
Fee computed on table in exhibit required by Item 25(b) of Schedule 14A (17 CFR 240.14a-101) per Item 1 of this Schedule and Exchange Act Rules 14c-5(g) and 0-11 |
ELEVAI LABS INC.
120 Newport Center Drive
Newport Beach, CA 92660
INFORMATION STATEMENT
(Preliminary)
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY
NOTICE OF SHAREHOLDER ACTION BY WRITTEN CONSENT
GENERAL INFORMATION
To the Holders of Common Stock of Elevai Labs
Inc.:
This Information Statement is first being mailed
on or about September 5, 2024 to the holders of record of the outstanding voting stock, $0.0001 par value per share (“Common Stock”),
of Elevai Labs Inc., a Delaware corporation (the “Company”), as of the close of business on August 12, 2024 (the “Record
Date”), pursuant to Rule 14c-2 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
This Information Statement relates to actions taken by written consent in lieu of a meeting (the “Written Consent”) of the
shareholders of the Company owning a majority of the voting power of the outstanding shares of stock (the “Majority Shareholders”)
as of the Record Date. Except as otherwise indicated by the context, references in this Information Statement to “we,” “us”
or “our” are references to Elevai Labs Inc., a Delaware corporation.
The Written Consent:
| 1. |
approved an amendment to our third amended and restated certificate of incorporation (“Certificate of Incorporation”), to effect a reverse stock split (the “Split”) of our common stock at a reverse stock split ratio ranging from 1:2 to 1:200 inclusive, as determined by our Board in its sole discretion (the “Approval of Certificate of Incorporation Amendment for Split”). |
The Written Consent constitutes the consent of
a majority of the voting power of the outstanding shares of stock and is sufficient under the Delaware General Corporation Law and our
amended and restated bylaws (“Bylaws”) to approve the actions described herein. Accordingly, the Approval of Certificate of
Incorporation Amendment for Split is not presently being submitted to our other shareholders for a vote. Pursuant to Rule 14c-2 under
the Exchange Act, the action described herein will not be implemented until a date at least twenty (20) days after the date on which this
Information Statement has been first mailed to the shareholders.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND A PROXY.
This Information Statement has been filed with
the U.S. Securities and Exchange Commission (the “SEC”) and is being furnished, pursuant to Section 14C of the Exchange Act
to the holders of voting and non-voting stock (“Shareholders”) to notify the Shareholders of the approval of the Approval
of Certificate of Incorporation Amendment for Split. Shareholders of record at the close of business on August 12, 2024 are entitled to
notice of the Written Consent. Because this action has been approved by the holders of the required majority of the voting power of our
outstanding shares of stock, no proxies were or are being solicited. The Approval of Certificate of Incorporation Amendment for Split
will not be effected until at least 20 calendar days after the mailing of the Information Statement accompanying this notice. We will
mail the Notice of Shareholder Action by Written Consent to the Shareholders on or about September 5, 2024.
PLEASE NOTE THAT THIS IS NOT A NOTICE OF A
HEREIN. THIS INFORMATION STATEMENT IS BEING FURNISHED TO YOU SOLELY FOR THE PURPOSE OF INFORMING SHAREHOLDERS OF THE MATTERS DESCRIBED
HEREIN PURSUANT TO SECTION 14(C) OF THE MEETING OF SHAREHOLDERS AND NO SHAREHOLDERS MEETING WILL BE HELD TO CONSIDER THE MATTERS DESCRIBED
EXCHANGE ACT AND THE REGULATIONS PROMULGATED THEREUNDER, INCLUDING REGULATION 14C.
| |
By Order of the Board of Directors, |
| |
|
| |
/s/ Braeden Lichti |
| |
Chairman of the Board of Directors |
| |
September 5, 2024 |
INTRODUCTION
This Information Statement is being first mailed
on or about September 5, 2024 to the Shareholders by the Board of Directors of the Company (“Board”) to provide material information
regarding the Approval of Certificate of Incorporation Amendment for Split that has been approved by the Written Consent of the Majority
Shareholders.
Only one copy of this Information Statement is
being delivered to two or more shareholders who share an address unless we have received contrary instruction from one or more of such
shareholders. We will promptly deliver, upon written or oral request, a separate copy of the Information Statement to a security holder
at a shared address to which a single copy of the document was delivered. If you would like to request additional copies of the Information
Statement, or if in the future you would like to receive multiple copies of information statements or proxy statements, or annual reports,
or, if you are currently receiving multiple copies of these documents and would, in the future, like to receive only a single copy, please
so instruct us by writing to the corporate secretary at the Company’s executive offices at the address specified above.
PLEASE NOTE THAT THIS IS NOT A REQUEST FOR
YOUR VOTE OR A PROXY STATEMENT, BUT RATHER AN INFORMATION STATEMENT DESIGNED TO INFORM YOU OF THE MATTERS DESCRIBED HEREIN.
The entire cost of furnishing this Information
Statement will be borne by the Company. We will request brokerage houses, nominees, custodians, fiduciaries and other like parties to
forward this Information Statement to the beneficial owners of the shares of stock held of record by them.
AUTHORIZATION BY THE BOARD OF DIRECTORS
AND THE MAJORITY SHAREHOLDERS
Under the Delaware General Corporation Law and
the Company’s Bylaws, any action that can be taken at an annual or special meeting of shareholders may be taken without a meeting,
without prior notice and without a vote, if the holders of outstanding stock having not less than the minimum number of votes that will
be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted to consent
to such action in writing. The approval of the Approval of Certificate of Incorporation Amendment for Split requires the affirmative vote
or written consent of a majority of the voting power of the issued and outstanding shares of stock. Each holder of Common Stock is entitled
to one vote per share of Common Stock held of record on any matter which may properly come before the shareholders.
On the Record Date, the Company had 20,1992,114
shares of Common Stock issued and outstanding, with the holders thereof being entitled to cast one vote per share. On August 22, 2024,
the Majority Shareholders adopted resolutions approving the Approval of Certificate of Incorporation Amendment for Split.
CONSENTING SHAREHOLDERS
On August 22, 2024, the Majority Shareholders,
being the record holder of 11,395,682 shares of Common Stock adopted resolutions, among other things, approving the adoption of the Approval
of Certificate of Incorporation Amendment for Split. The voting power held by the Majority Shareholders represented approximately 52.93%
of the total voting power of all issued and outstanding stock of the Company as of the Record Date.
We are not seeking written consent from any other
shareholder of the Company, and the other shareholders will not be given an opportunity to vote with respect to the Approval of Certificate
of Incorporation Amendment for Split. All necessary corporate approvals have been obtained. This Information Statement is furnished solely
for the purposes of advising shareholders of the action taken by Written Consent and giving shareholders notice of such actions taken
as required by the Exchange Act.
As the Approval of Certificate of Incorporation
Amendment for Split action was taken by Written Consent, there will be no security holders’ meeting and representatives of the principal
accountants for the current year and for the most recently completed fiscal year will not have the opportunity to make a statement if
they desire to do so and will not be available to respond to appropriate questions from our shareholders.
APPROVAL OF CERTIFICATE OF INCORPORATION AMENDMENT
TO EFFECT A REVERSE STOCK SPLIT OF OUR COMMON STOCK AT A REVERSE STOCK SPLIT RATIO RANGING FROM 1:2 TO 1:200, INCLUSIVE, AS DETERMINED
BY OUR BOARD IN ITS SOLE DISCRETION
Reverse Stock Split
The Majority Shareholders approved an amendment
to our Certificate of Incorporation to effect a reverse stock split of our Common Stock at a reverse stock split ratio ranging from 1:2
to 1:200, inclusive, as may be determined at the appropriate time by our Board in its sole discretion (the “Reverse Stock Split”).
This means that our Board will be able to decide whether and when to effect the Reverse Stock Split without further action from the stockholders.
Reasons for a Reverse Stock Split
Maintaining our Listing on Nasdaq
The primary purpose of the Reverse Stock Split
is to raise the per share trading price of our common stock in order to maintain our listing on The Nasdaq Capital Market. Delisting from
Nasdaq may adversely affect our ability to raise additional financing through the public or private sale of our equity securities, may
significantly affect the ability of investors to trade in our securities and may negatively affect the value and liquidity of our Common
Stock. Delisting may also have other negative impacts, including potential loss of employee confidence, the loss of institutional investors,
the loss of analyst coverage or the loss of business development opportunities.
Potentially Improving the Marketability
and Liquidity of our Common Stock
The Board believes that an increased stock price
may also improve the marketability and liquidity of our Common Stock. For example, many brokerages, institutional investors and funds
have internal policies that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending
low-priced stocks to their customers by restricting or limiting the ability to purchase such stocks on margin. Additionally, investors
may be dissuaded from purchasing stocks below certain prices because brokers’ commissions, as a percentage of the total transaction
value, can be higher for low-priced stocks.
Decreasing the Risk of Market Manipulation
of our Common Stock
The Board believes that the potential increase
in stock price may reduce the risk of market manipulation of our Common Stock, which we believe is enhanced when our stock trades below
$1.00 per share. By reducing market manipulation risk, we may also thereby potentially decrease the volatility of our stock price.
Providing us the Ability to Issue Additional
Securities
A Reverse Stock Split is expected to increase
the number of authorized, but unissued and unreserved, shares of our common stock. These additional shares would provide flexibility to
us for raising capital; repurchasing debt; providing equity incentives to employees, officers, directors, consultants and advisors (including
pursuant to our equity compensation plan); expanding our business through the acquisition of other businesses and for other purposes.
However, at present, we do not have any specific plans, arrangements, understandings or commitments for the additional shares that would
become available.
Accordingly, for these and other reasons, the
Board believes that a Reverse Stock Split is in the best interests of us and our stockholders. A copy of the draft of the amendment to
our Certificate of Incorporation providing for the Reverse Stock Split is attached hereto as Annex A.
Criteria to be Used for Determining Whether
to Implement a Reverse Stock Split
This proposal gives our Board the discretion to
select a Reverse Stock Split ratio from within a range between and including 1:2 and 1:200 on a date selected by the Board based on its
then-current assessment of the factors below, and in order to maximize Company and stockholder interests. In determining whether to implement
the Reverse Stock Split, and which ratio to implement, if any, the Board may consider, among other factors:
| ● | the
historical trading price and trading volume of our Common Stock; |
| ● | the
then-prevailing trading price and trading volume of our Common Stock and the expected impact of the Reverse Stock Split on the trading
market in the short- and long-term; |
| ● | the
continued listing requirements for our Common Stock on The Nasdaq Stock Market LLC (“Nasdaq”) or other applicable exchanges,
if then applicable; |
| ● | the
number of shares of Common Stock outstanding; and |
| ● | which
Reverse Stock Split ratio would result in the least administrative cost to us; and |
| ● | the
historical trading price and trading volume of our Common Stock. |
Certain Risks and Potential Disadvantages
Associated with a Reverse Stock Split
We cannot assure stockholders that the proposed Reverse Stock Split
will sufficiently increase our stock price or, that our stock will trade at a price that is equal to at least $1.00 per share for a period
of 10 consecutive days prior to Nasdaq determining that our stock is subject to delisting. If we do not regain compliance with Nasdaq
Listing Rule 5550(a)(2) (the “Bid Price Rule”) prior to Nasdaq determining that our stock is subject to delisting, our listed
securities may be delisted. The effect of a Reverse Stock Split on our stock price cannot be predicted with any certainty, and the history
of reverse stock splits for other companies in various industries is varied, particularly since some investors may view a reverse stock
split negatively. It is possible that our stock price after a Reverse Stock Split will not increase in the same proportion as the reduction
in the number of shares outstanding, causing a reduction in our overall market capitalization. Further, even if we implement a Reverse
Stock Split, our stock price may decline due to various factors, including our future performance and general industry, market and economic
conditions. This percentage decline, as an absolute number and as a percentage of our overall market capitalization, may be greater than
would occur in the absence of a Reverse Stock Split. If we fail to meet Nasdaq’s continued listing requirements, Nasdaq could suspend
trading in our Common Stock and commence delisting proceedings.
The proposed Reverse Stock Split may decrease
the liquidity of our Common Stock and result in higher transaction costs. The liquidity of our Common Stock may be negatively impacted
by the reduced number of shares outstanding after the Reverse Stock Split, which would be exacerbated if the stock price does not increase
following the split. In addition, a Reverse Stock Split would increase the number of stockholders owning “odd lots” of fewer
than 100 shares, trading in which generally results in higher transaction costs. Accordingly, a Reverse Stock Split may not achieve the
desired results of increasing marketability and liquidity as described above.
The implementation of a Reverse Stock Split would
result in an effective increase in the authorized number of shares of Common Stock available for issuance, which could, under certain
circumstances, have anti-takeover implications. The additional shares of Common Stock available for issuance could be used by us to oppose
a hostile takeover attempt or to delay or prevent changes in control or in our management. Although the Reverse Stock Split has been prompted
by business and financial considerations, and not by the threat of any hostile takeover attempt (nor is the Board currently aware of any
such attempts directed at us), stockholders should be aware that approval of the Reverse Stock Split could facilitate future efforts by
us to deter or prevent changes in control, including transactions in which stockholders might otherwise receive a premium for their shares
over then-current market prices.
Stockholders should also keep in mind that the
implementation of a Reverse Stock Split does not have an effect on the actual or intrinsic value of our business or a stockholder’s
proportional ownership interest (subject to the treatment of fractional shares). However, should the overall value of our common stock
decline after a Reverse Stock Split, then the actual or intrinsic value of shares held by stockholders will also proportionately decrease
as a result of the overall decline in value.
Effects of a Reverse Stock Split
As of the effective date of the Reverse Stock
Split:
| ● | a
certain number shares of Common Stock outstanding (depending on the Reverse Stock Split ratio selected by the Board) will be combined,
automatically and without any action on the part of the Company or its stockholders, into one new share of Common Stock; |
| ● | no
fractional shares of Common Stock will be issued; instead, stockholders who would otherwise receive a fractional share will receive a
whole share in lieu of any fractional share of Common Stock (as detailed below); |
| ● | proportionate
adjustments will be made to the number of shares issuable upon the exercise or vesting of all then-outstanding stock options and warrants
which will result in a proportional decrease in the number of shares of Common Stock reserved for issuance upon exercise or vesting of
such stock options and warrants and, in the case of stock options, a proportional increase in the exercise price of all such stock options; |
| ● | the
number of shares of Common Stock then reserved for issuance under our equity compensation plan will be reduced proportionately; and |
| ● | the
total number of authorized shares of Common Stock will remain at 300,000,000 (or 2,000,000,000 after the filing of the Certificate of
Amendment to increase our authorized shares as set forth in our Preliminary Information Statement on Schedule 14C, as amended, initially
filed on August 16, 2024). |
The following table summarizes, for illustrative
purposes only, the anticipated effects of a Reverse Stock Split on our shares available for issuance based on information as of the Record
Date (unless otherwise noted below) and without giving effect to the treatment of fractional shares.
Assuming the Reverse Stock Split is implemented
by the Board:
| Status | |
Number of
Shares of
Common
Stock
Authorized | | |
Number of
Shares of
Common
Stock
Issued and
Outstanding | | |
Number of
Shares of
Common
Stock
Reserved
for Future
Issuance(1) | | |
Number of
Shares of
Common
Stock
Authorized but
Unissued and
Unreserved | | |
Hypothetical
Initial
Market
Value of
Shares of
Common
Stock
Authorized but
Unissued and
Unreserved* | |
| Pre-Reverse Stock Split | |
| 300,000,000 | | |
| 20,192,114 | | |
| 2,034,962 | | |
| 277,772,924 | | |
$ | 85,276,288 | |
| Post-Reverse Stock Split 1:2 | |
| 300,000,000 | | |
| 10,096,057 | | |
| 1,017,481 | | |
| 288,886,462 | | |
$ | 88,688,144 | |
| Post-Reverse Stock Split 1:200 | |
| 300,000,000 | | |
| 100,961 | | |
| 10,175 | | |
| 299,888,865 | | |
$ | 92,065,882 | |
| * | Based
on a hypothetical post-split stock price calculated by multiplying the closing stock price on August 23, 2024 of $0.3070 by the split ratio. |
| (1) | Includes
shares of Common Stock reserved for issuance (i) upon the exercise of currently exercisable warrants and options and (ii) under
the Elevai Labs Inc. 2022 Equity Incentive Plan less any exercised or converted awards. |
A Reverse Stock Split would affect all stockholders
uniformly. As of the effective date of the Reverse Stock Split which shall be determined by the Board in its sole discretion (“Effective
Date”), each stockholder would own a reduced number of shares of Common Stock. Percentage ownership interests, voting rights and
other rights and preferences would not be affected, except to the extent that the Reverse Stock Split would result in fractional shares
(as described below).
A Reverse Stock Split would not affect the registration
of our Common Stock under Section 12(b) of the Exchange Act and we would continue to be subject to the periodic reporting
and other requirements of the Exchange Act. Barring delisting by Nasdaq, our Common Stock would continue to be listed on Nasdaq under
the symbol “ELAB,” but would have a new Committee on Uniform Securities Identification Procedures number after the effective
date.
Fractional Shares
No fractional shares of common stock will be issued
as a result of the Reverse Stock Split. In lieu of any fractional shares to which a stockholder of record would otherwise be entitled,
we will issue a whole share in lieu of any fractional share of Common Stock.
As of August 23, 2024, there were 59 common stockholders
of record. We do not intend for this transaction to be the first step in a series of plans or proposals of a “going private transaction”
within the meaning of Rule 13e-3 of the Exchange Act.
Procedure for Effecting a Reverse Stock
Split
Beneficial Holders of Common Stock
Stockholders who hold their shares through a bank,
broker or other nominee will be treated in the same manner as registered stockholders who hold their shares in their names. Banks, brokers
and other nominees will be instructed to effect the Reverse Stock Split for beneficial owners of such shares. However, banks, brokers
or other nominees may implement different procedures than those to be followed by registered stockholders for processing the Reverse Stock
Split, particularly with respect to the treatment of fractional shares. Stockholders whose shares of Common Stock are held in the name
of a bank, broker or other nominee are encouraged to contact their bank, broker or other nominee with any questions regarding the procedures
for implementing the Reverse Stock Split with respect to their shares.
Registered Holders of Common Stock
Registered stockholders hold shares electronically
in book-entry form under the direct registration system (i.e., do not have stock certificates evidencing their share ownership but instead
have a statement reflecting the number of shares registered in their accounts) and, as a result, do not need to take any action to receive
post-split shares. If they are entitled to receive post-split shares, they will automatically receive, at their address of record, a transaction
statement indicating the number of post-split shares held following the Effective Date.
Material U.S. Federal Income Tax Consequences
The following is a summary of material U.S. federal
income tax consequences of a Reverse Stock Split to stockholders. This summary is based on the provisions of the Internal Revenue Code
of 1986, as amended (the “Code”), U.S. Treasury regulations, administrative rulings and judicial decisions, all as in
effect on the date of this filing, and all of which are subject to change or differing interpretations, possibly with retroactive effect.
Any such change or differing interpretation could affect the tax consequences described below.
We have not sought and will not seek an opinion
of counsel or ruling from the Internal Revenue Service (the “IRS”) with respect to the statements made and the conclusions
reached in the following summary, and there can be no assurance that the IRS or a court will agree with such statements and conclusions.
This summary is limited to stockholders that are
U.S. holders, as defined below, and that hold our Common Stock as a capital asset (generally, property held for investment).
This summary is for general information only and
does not address all U.S. federal income tax considerations that may be applicable to a holder’s particular circumstances or
to holders that may be subject to special tax rules, such as, for example, brokers and dealers in securities, currencies or commodities,
banks and financial institutions, regulated investment companies, real estate investment trusts, expatriates, tax-exempt entities, governmental
organizations, traders in securities that elect to use a mark-to-market method of accounting for their securities, certain former citizens
or long-term residents of the U.S., insurance companies, persons holding shares of our Common Stock as part of a hedging, integrated or
conversion transaction or a straddle or persons deemed to sell shares of our Common Stock under the constructive sale provisions of the
Code, persons that hold more than 5% of our Common Stock, persons that hold our Common Stock in an individual retirement account, 401(k) plan
or similar tax-favored account or partnerships or other pass-through entities for U.S. federal income tax purposes and investors
in such entities.
This summary does not address any U.S. federal
tax consequences other than U.S. federal income tax consequences (such as estate or gift tax consequences), the Medicare tax on net
investment income, the alternative minimum tax or any U.S. state, local or foreign tax consequences. This summary also does not address
any U.S. federal income tax considerations relating to any other transaction other than the Reverse Stock Split.
For purposes of this summary, a “U.S. holder”
means a beneficial owner of our Common Stock that is, for U.S. federal income tax purposes:
| ● | an
individual who is a citizen or resident of the U.S.; |
| ● | a
corporation created or organized in or under the laws of the U.S., any state thereof or the District of Columbia; |
| ● | an
estate the income of which is subject to U.S. federal income taxation regardless of its source; or |
| ● | a
trust if (1) it is subject to the primary supervision of a court within the U.S. and one or more U.S. persons have the
authority to control all substantial decisions of the trust or (2) it has a valid election in effect under applicable U.S. Treasury
regulations to be treated as a U.S. person. |
If an entity (or arrangement) classified as a
partnership for U.S. federal income tax purposes holds shares of our Common Stock, the tax treatment of a partner in the partnership
will generally depend upon the status of the partner and the activities of the partnership. If a holder of our Common Stock is a partner
of a partnership holding shares of our Common Stock, such holder should consult his or her own tax advisor.
This summary of certain U.S. federal income
tax consequences is for general information only and is not tax advice. Stockholders are urged to consult their own tax advisor with respect
to the application of U.S. federal income tax laws to their particular situation as well as any tax considerations arising under
other U.S. federal tax laws (such as the estate or gift tax laws) or under the laws of any state, local, foreign or other taxing
jurisdiction or under any applicable tax treaty.
The Reverse Stock Split is intended to be treated
as a recapitalization for U.S. federal income tax purposes. Assuming the Reverse Stock Split qualifies as a recapitalization, except
as described below with respect to cash received in lieu of a fractional share, a U.S. holder will not recognize any gain or loss
for U.S. federal income tax purposes upon the Reverse Stock Split. In the aggregate, a U.S. holder’s tax basis in the
Common Stock received pursuant to the Reverse Stock Split (excluding the portion of the tax basis that is allocable to any fractional
share) will equal the U.S. holder’s tax basis in its Common Stock surrendered in the Reverse Stock Split in exchange therefor,
and the holding period of the U.S. holder’s Common Stock received pursuant to the Reverse Stock Split will include the holding
period of the Common Stock surrendered in the Reverse Stock Split in exchange therefor.
In general, a U.S. holder who receives a
cash payment in lieu of a fractional share will recognize capital gain or loss equal to the difference between the amount of cash received
in lieu of the fractional share and the portion of the U.S. holder’s tax basis of the Common Stock surrendered in the Reverse
Stock Split that is allocable to the fractional share. Such gain or loss generally will be long-term capital gain or loss if the U.S. holder’s
holding period in its Common Stock surrendered in the Reverse Stock Split is more than one year as of the date of the Reverse Stock Split.
The deductibility of net capital losses by individuals and corporations is subject to limitations. Depending on a stockholder’s
individual facts and circumstances, it is possible that cash received in lieu of a fractional share could be treated as a distribution
under Section 301 of the Code, so stockholders should consult their own tax advisors as to that possibility and the resulting tax
consequences to them in that event.
U.S. holders that have acquired different
blocks of our Common Stock at different times or at different prices are urged to consult their own tax advisors regarding the allocation
of their aggregated adjusted basis among, and the holding period of, our Common Stock.
Information returns generally will be required
to be filed with the IRS with respect to the payment of cash in lieu of a fractional share made pursuant to the Reverse Stock Split unless
such U.S. holder is an exempt recipient and timely and properly establishes with the applicable withholding agent the exemption.
In addition, payments of cash in lieu of a fractional share made pursuant to the Reverse Stock Split may, under certain circumstances,
be subject to backup withholding, unless a U.S. holder timely provides to the applicable withholding agent proof of an applicable
exemption or a correct taxpayer identification number, and otherwise complies with the applicable requirements of the backup withholding
rules. Any amounts withheld under the backup withholding rules are not additional tax and may be refunded or credited against the U.S. holder’s
U.S. federal income tax liability, provided that the U.S. holder timely furnishes the required information to the IRS. U.S. holders
should consult their tax advisors regarding their qualification for an exemption from backup withholding and the procedures for obtaining
such an exemption.
Accounting Consequences
The par value per share of our Common Stock will
remain unchanged at $0.0001 per share following a Reverse Stock Split. As a result, as of the Effective Date, the stated capital on our
balance sheets attributable to Common Stock will be reduced proportionally based on the Reverse Stock Split ratio, and the additional
paid-in capital will be credited with the amount by which the capital is reduced. The net income or loss per share of Common Stock will
be increased as a result of the fewer shares of common stock outstanding. The Reverse Stock Split will be reflected retroactively in our
consolidated financial statements.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The table below sets forth information regarding
the beneficial ownership of the common stock by (i) our directors and named executive officers; (ii) all the named executives and directors
as a group and (iii) any other person or group that to our knowledge beneficially owns more than five percent of our outstanding shares
of common stock.
We have determined beneficial ownership in accordance with the rules
and regulations of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person has or shares
the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof or has the right to acquire such powers
within 60 days. Shares of common stock subject to options that are currently exercisable or exercisable within 60 days of August 23, 2024,
are deemed to be outstanding and beneficially owned by the person holding the options. Shares issuable pursuant to stock options or warrants
are deemed outstanding for computing the percentage ownership of the person holding such options or warrants but are not deemed outstanding
for computing the percentage ownership of any other person. Except as indicated by the footnotes below, we believe, based on the information
furnished to us, that the persons and entities named in the table below will have sole voting and investment power with respect to all
shares of common stock that they will beneficially own, subject to applicable community property laws. The percentage of beneficial ownership
is based on 20,804,614 shares of common stock outstanding on August 23, 2024.
| Name
and Address of Beneficial Owner(1) | |
Amount and
Nature of
Beneficial
Ownership | | |
Percentage of
Beneficial
Ownership | |
| 5% or Greater Shareholders: | |
| | |
| |
| BWL Investments Ltd.(2) | |
| 1,906,414 | | |
| 9.2 | % |
| JP Bio Consulting LLC(3) | |
| 2,851,454 | | |
| 13.7 | % |
| Hatem Abou-Sayed MD MBA FACS, a Professional Medical Corporation(4) | |
| 1,371,905 | | |
| 6.6 | % |
| Hongyu Wang(5) | |
| 1,184,747 | | |
| 5.7 | % |
| Hatem Abou-Sayed(6) | |
| 1,546,905 | | |
| 7.4 | % |
| Directors, Named Executive Officers and Other Executive Officers: | |
| | | |
| | |
| Jordan R. Plews, former Chief Executive Officer and Director | |
| 3,034,787 | (7) | |
| 14.5 | % |
| Graydon Bensler, Chief Executive Officer, Chief Financial Officer and Director | |
| 1,024,787 | (8) | |
| 4.9 | % |
| Braeden Lichti, Chairman of the Board | |
| 3,794,798 | (9) | |
| 18.0 | % |
| Jeffrey Parry, Director | |
| 71,667 | (10) | |
| * | % |
| George Kovalyov, Director | |
| - | | |
| - | % |
| Juliane Daley, Director | |
| 26,200 | (11) | |
| * | % |
| All executive officers and directors as a group (6 persons) | |
| 7,952,239 | (12) | |
| 37.0 | % |
| * |
Denotes less than one (1%) percent. |
| (1) |
Unless otherwise indicated, the business address of each of the individuals is our address of c/o Elevai Labs, Inc., 120 Newport Center Drive, Ste. 250, Newport Beach, CA 92660. |
|
(2) |
Braeden Lichti has sole voting and dipositive power over the shares held by BWL Investments Ltd. The address of BWL Investments Ltd. is 650 West Georgia Street #3200, British Columbia Canada V6B 4P7. |
|
(3) |
Jordan R. Plews has sole voting and dipositive power over the shares held by JP Bio Consulting LLC. The address of JP Bio Consulting LLC is 2615 Q Street, #1, Sacramento, CA 95816. |
|
(4) |
Consists of (i) 1,359,342 shares of Common Stock and (ii) 12,563 shares of Common Stock underlying warrants. Hatem Abou-Sayed has sole voting and dipositive power over the shares held by Hatem Abou-Sayed MD MBA FACS, a Professional Medical Corporation. The address of Hatem Abou-Sayed MD MBA FACS is 4510 Executive Drive, Suite 210, San Diego, CA 92121. |
|
(5) |
Consists of (i) 1,121,710 shares of Common Stock and (ii) 63,037 shares of Common Stock underlying warrants. |
|
(6) |
Consists of (i) 1,359,342 shares of Common Stock held by Hatem Abou-Sayed MD MBA FACS of which Dr. Abou-Sayed has sole voting and dipositive power over the shares, (ii) 12,563 shares of Common Stock underlying warrants and (iii) 175,000 shares of Common Stock that Dr. Abou-Sayed has the right to acquire from us within 60 days of August 23, 2024, pursuant to the exercise of stock options granted under the 2020 Equity Incentive Plan. |
|
(7) |
Consists of (i) 2,851,454 shares of Common Stock held by JP Bio Consulting LLC of which Dr. Plews has sole voting and dipositive power over the shares and (ii) 183,333 shares of Common Stock that Dr. Plews has the right to acquire from us within 60 days of August 23, 2024, pursuant to the exercise of stock options granted under the 2020 Equity Incentive Plan. |
|
(8) |
Consists of (i) 841,454 shares of Common Stock held by GB Capital Ltd. of which Mr. Bensler has sole voting and dipositive power over the shares and (ii) 183,333 shares of Common Stock that Mr. Bensler has the right to acquire from us within 60 days of August 23, 2024, pursuant to the exercise of stock options granted under the 2020 Equity Incentive Plan. |
|
(9) |
Consists of (i) 170,833 shares of Common Stock that Mr. Lichti has the right to acquire from us within 60 days of August 23, 2024 pursuant to the exercise of stock options granted under the 2020 Equity Incentive Plan, (ii) 1,906,414 shares of Common Stock held by BWL Investments Ltd. of which Mr. Lichti has sole voting and dipositive power over the shares, (iii) 828,000 shares of Common Stock held by BWL Holdings Ltd. of which Mr. Lichti has sole voting and dipositive power over the shares, (iv) 828,000 shares of Common Stock held by Northstrive Fund II LP of which Mr. Lichti has sole voting and dipositive power over the shares and (v) 61,551 shares of Common Stock underlying warrants held by BWL Investments Ltd. |
|
(10) |
Consists of (i) 41,667 shares of Common Stock and (ii) 30,000 shares of Common Stock that Mr. Parry has the right to acquire from us within 60 days of August 23, 2024, pursuant to the exercise of stock options granted under the 2020 Equity Incentive Plan. |
|
(11) |
Consists of (i) 1,200 shares of Common Stock and (ii) 25,000 shares of Common Stock that Ms. Daley has the right to acquire from us within 60 days of August 23, 2024, pursuant to the exercise of stock options granted under the 2020 Equity Incentive Plan. |
|
(12) |
Consists of (i) 8,657,531 shares of Common Stock beneficially owned by our directors and executive officers and (ii) 592,499 shares of Common Stock underlying outstanding options, exercisable within 60 days of August 23, 2024 and (iii) 74,114 shares of common stock underlying warrants. |
INTEREST OF CERTAIN PERSONS IN OR OPPOSITION
TO MATTERS TO BE ACTED UPON
No person who has been our officer or director,
or to our knowledge, any of their associates, has any substantial interest, direct or indirect, by security holdings or otherwise in any
matter to be acted upon. None of our directors opposed the actions to be taken by the Company.
ADDITIONAL INFORMATION
The Company files annual, quarterly and current
reports and other information with the SEC under the Exchange Act. You may obtain copies of this information by mail from the Public Reference
Room of the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the public reference
rooms by calling the SEC at 1-800-SEC-0330. The SEC also maintains an internet website that contains reports and other information about
issuers that file electronically with the SEC. The address of that website is www.sec.gov.
DELIVERY OF DOCUMENTS TO SECURITY HOLDERS SHARING
AN ADDRESS
If hard copies of the materials are requested,
we will send only one Information Statement and other corporate mailings to shareholders who share a single address unless we received
contrary instructions from any shareholder at that address. This practice, known as “householding,” is designed to reduce
our printing and postage costs. However, the Company will deliver promptly upon written or oral request a separate copy of the Information
Statement to a shareholder at a shared address to which a single copy of the Information Statement was delivered. You may make such a
written or oral request by (a) sending a written notification stating (i) your name, (ii) your shared address and (iii) the address to
which the Company should direct the additional copy of the Information Statement, to the Company at 120 Newport Center Drive, Newport
Beach, CA 92660.
If multiple shareholders sharing an address have
received one copy of this Information Statement or any other corporate mailing and would prefer the Company to mail each shareholder a
separate copy of future mailings, you may mail notification to, or call the Company at, its principal executive offices. Additionally,
if current shareholders with a shared address received multiple copies of this Information Statement or other corporate mailings and would
prefer the Company to mail one copy of future mailings to shareholders at the shared address, notification of such request may also be
made by mail or telephone to the Company’s principal executive offices.
This Information Statement is provided to the
shareholders of the Company only for information purposes in connection with the Majority Shareholders’ approval of the Approval
of Certificate of Incorporation Amendment for Split, pursuant to and in accordance with Rule 14c-2 of the Exchange Act. Please carefully
read this Information Statement.
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
The Company is subject to the informational requirements
of the Securities Exchange Act of 1934, and in accordance therewith files reports and other information with the SEC. Such reports and
other information and a copy of the registration statement and the exhibits and schedules that were filed with the registration statement
may be inspected without charge at the public reference facilities maintained by the SEC in 100 F Street, N.E., Washington, D.C. 20549.
Information regarding the operation of the public reference rooms may be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains
a web site that contains reports, proxy and information statements and other information regarding registrants that file electronically
with the SEC. The address of the web site is www.sec.gov.
| |
By Order of the Board of Directors, |
| |
|
| |
/s/ Braeden Lichti |
| |
Chairman of the Board of Directors |
| |
September 5, 2024 |
Annex A
FORM OF CERTIFICATE OF AMENDMENT OF
THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
ELEVAI LABS INC.
(Pursuant to Sections 242 of the General Corporation
Law of the State of Delaware)
Elevai Labs Inc., a corporation organized and
existing under and by virtue of the General Corporation Law of the State of Delaware does hereby certify:
FIRST: That the Board
of Directors of Elevai Labs Inc. duly adopted resolutions setting forth a proposed amendment of the Third Amended and Restated
Certificate of Incorporation of said corporation (the “Certificate of Incorporation”), declaring said amendments to be advisable
and calling a meeting of the stockholders of said corporation for consideration thereof. The resolution setting forth the proposed amendment
is as follows:
“RESOLVED, that the
Certificate of Incorporation of this corporation be amended by adding paragraph 4 to Section 4.2 of Article Fourth as follows:
“4. Effective as of
12:01 a.m. Eastern Time on ________ (the “Effective Time”), each [*](1) shares of the Corporation’s Common
Stock issued and outstanding immediately prior to the Effective Time shall, automatically and without any action on the part of the Corporation
or the respective holders thereof, be combined and converted into one share of Common Stock without increasing or decreasing the par value
of each share of Common Stock (the “Reverse Stock Split”). No fractional shares of Common Stock shall be issued as a result
of the Reverse Stock Split and, in lieu thereof, upon surrender after the Effective Time of a certificate or book entry position which
formerly represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time, any person who would
otherwise be entitled to a fractional share of Common Stock as a result of the Reverse Stock Split, following the Effective Time, shall
be entitled to receive one whole share. The Reverse Stock Split shall occur whether or not the certificates representing such shares of
Common Stock are surrendered to the Corporation or its transfer agent. Each certificate or book entry position that immediately prior
to the Effective Time represented shares of Common Stock shall thereafter represent the number of shares of Common Stock into which the
shares of Common Stock represented by such certificate or book entry position has been combined, subject to the right to receive a whole
share in lieu of any fractional share of Common Stock as set forth above.”
| 1 |
The Board of Directors will have the discretion to effect the Reverse Split at a ratio of any whole number between 1-for-2 and 1-for-200. |
SECOND: That thereafter, the
holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action
by written consent, approved of the proposed amendment on August 22, 2024 pursuant to Section 242 of the General Corporation Law of the
State of Delaware.
THIRD: That said amendment was
duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.
[Signature page follows]
IN WITNESS WHEREOF, said corporation
has caused this certificate to be signed on [*], 2024.
| |
By: |
|
| |
Name: |
Graydon Bensler |
| |
Title: |
Chief Executive Officer and Chief Financial Officer |
Annex A-2
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