NUZE NuZee Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14C

 

 

Information Statement Pursuant to Section 14(c) of
the Securities Exchange Act of 1934

(Amendment No. )

 

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

 

NUZEE, INC.

(Name of Registrant As Specified In Its Charter)

 

Payment of Filing Fee (Check the appropriate box):
☒	No fee required
☐	Fee paid previously with preliminary materials.
☐	Fee computed on table in exhibit required by Item 25(b) of Schedule 14A (17CFR 240.14a-101) per Item 1 of this Schedule and Exchange Act Rules 14c-5(g) and 0-11

 

 

 

NUZEE, INC.

6107, 6th Floor, Building C4, No.1 Huangchang West Road,

Dougezhuang, Chaoyang District, Beijing

+ 86 18518579917

 

NOTICE OF WRITTEN CONSENT OF STOCKHOLDERS

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY

 

To the Stockholders of Nuzze, Inc.:

 

This Notice and the accompanying Information Statement are being furnished to the stockholders of Nuzee Inc., a Nevada corporation (the “Company,” “we,” “us,” or “our”), in connection with the corporate actions described below. The holders of a majority of the Company’s voting capital stock by written consent in lieu of a meeting (the “Majority Shareholders “), pursuant to Section 78.320 of the Nevada Revised Statutes (the “NRS”) and Section 1.11 of Article I of our bylaws, approved the following corporate actions (the “Authorizations”):

 

	(i)	the adoption of the CIMG Inc. 2024 Equity Incentive Plan;
	(ii)	the filing of the certificate of amendment to the articles of incorporation to change the Company’s name to CIMG Inc. and to amend its Nasdaq Symbol to “IMG”; and
	(iii)	for purposes of complying with Nasdaq Listing Rule 5635(d), the issuance of more than 20% of the Company’s issued and outstanding common stock pursuant to the convertible notes purchase agreement to raise an aggregate of $1,300,000 with certain investors (the “Purchase Agreement”).

 

This Information Statement is being furnished to our stockholders of record as of September 17, 2024 (the “Record Date”), in accordance with Rule 14c-2 under the Securities Exchange Act of 1934, as amended, and the rules promulgated by the Securities and Exchange Commission thereunder, solely for the purpose of informing our stockholders of the actions taken by the written consent of the Majority Shareholders. You do not need to do anything in response to this Notice and the Information Statement. The action to be taken pursuant to the Authorizations above shall be taken at such future date as determined by the Board of Directors, but in no event earlier than the 20th day after this Information Statement is mailed or furnished to the Stockholders of record as of the Record Date. You are urged to read the Information Statement in its entirety.

 

THIS IS NOT A NOTICE OF A MEETING AND NO STOCKHOLDERS’ MEETING WILL BE HELD TO CONSIDER THE MATTERS DESCRIBED HEREIN. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.

 

By Order of our Board of Directors,
/s/ Jianshuang Wang
Jianshuang Wang

 

Chief Executive Officer and Director

 

September 24, 2024

 

 

NUZEE, INC.

6107, 6th Floor, Building C4, No.1 Huangchang West Road,

Dougezhuang, Chaoyang District, Beijing

+ 86 18518579917

 

September 24, 2024

 

INFORMATION STATEMENT

 

INFORMATION STATEMENT PURSUANT TO SECTION 14C OF THE SECURITIES EXCHANGE ACT OF 1934.

 

THIS IS NOT A NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS AND NO SHAREHOLDER MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN. THE ACTIONS DESCRIBED IN THIS INFORMATION STATEMENT HAVE BEEN APPROVED BY HOLDERS OF A MAJORITY OF THE COMPANY’S COMMON STOCK. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. THERE ARE NO DISSENTERS’ RIGHTS WITH RESPECT TO THE ACTIONS DESCRIBED IN THIS INFORMATION STATEMENT.

 

INTRODUCTION

 

This Information Statement is being mailed or otherwise furnished to the holders of common stock, $0.00001 par value per share (the “Common Stock”) of Nuzee, Inc., a Nevada corporation (the “Company”), by the Board of Directors (the “Board”) to notify them about certain action the holders of a majority of the voting power of the Company’s outstanding voting securities have taken by written consent in lieu of a shareholders’ meeting. The shareholder action was taken on September 16, 2024. Copies of this Information Statement are first being sent on or about October 8, 2024, to the holders of record as of September 17, 2024, of the outstanding shares of the Company’s common stock.

 

General Information

 

Unless otherwise noted, references to the “Company,” “we,” “us,” or “our” mean Nuzee, Inc., a Nevada corporation. Our principal executive offices are located at 6107, 6th Floor, Building C4, No.1 Huangchang West Road, Dougezhuang, Chaoyang District, Beijing, telephone + 86 18518579917.

 

By written consent dated September 16, 2024, as permitted by Section 78.320 of the NRS and Section 1.11 of Article I of our bylaws, the stockholders who have the authority to vote a majority of the outstanding shares of common stock, being DYT INFO PTE. LTD., METAVERSE INTELLIGENCE TECH LTD, YY TECH INC, JOYER TECH AND INFORMATION OPC, JOYER INVESTMENT LIMITED, Yanqin Chen and Yalan Yang, who together have an aggregate beneficial interest of greater than the majority of our issued and outstanding shares of common stock, approved the following corporate actions (collectively, the “Authorizations”):

 

	(i)	the adoption of the CIMG Inc. 2024 Equity Incentive Plan
	(ii)	the filing of the certificate of amendment to the articles of incorporation to change the company’s name to CIMG Inc. and to amend its Nasdaq symbol to “IMG”; and
	(iii)	for purposes of complying with Nasdaq Listing Rule 5635(d), the issuance of more than 20% of the Company’s issued and outstanding common stock pursuant to the convertible notes purchase agreement to raise an aggregate of $1,300,000 with certain investors (the “Purchase Agreement”).

 

Nasdaq Requirements

 

The foregoing resolutions for the Purchase Agreement are required because under the terms of the Purchase Agreement, the Company will have to issue at least 1,382,977 shares of common stock underlying the convertible notes representing approximately 27.6% of the total issued and outstanding common stock of the Company as of September 16, 2024, which is more than 20% of its issued and outstanding common stock, and 21.6% on a post-issuance basis.

 

 

Under Nasdaq Listing Rule 5635(c), shareholder approval is required prior to the issuance of securities when a stock option or purchase plan is to be established or materially amended or other equity compensation arrangement made or materially amended, pursuant to which stock may be acquired by officers, directors, employees, or consultants, except in certain circumstances. Under Nasdaq Listing Rule 5635(d), shareholder approval is required prior to a 20% Issuance at a price that is less than the Minimum Price. “Minimum Price” means a price that is the lower of: (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement; or (ii) the average Nasdaq Official Closing Price of the common stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement. “20% Issuance” means a transaction, other than a public offering as defined in IM-5635-3, involving the sale, issuance or potential issuance by the Company of common stock (or securities convertible into or exercisable for common stock), which alone or together with sales by officers, directors or substantial shareholders of the Company, equals 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance.

 

As a result of the foregoing resolutions, on a date which is at least 20 calendar days after the date of mailing this Information Statement to its stockholders, the Company will comply with Nasdaq Listing Rule 5635, as these resolutions constitute stockholder approval for the Company to issue shares.

 

Dissenters’ Right of Appraisal

 

Under the NRS, the Company’s stockholders are not entitled to dissenters’ rights with respect to the proposed actions and nor have we provided for appraisal rights in our certificate of incorporation or bylaws..

 

Vote Required

 

The vote, which was required to approve the above Authorizations, was the affirmative vote of the holders of a majority of the Company’s voting stock. Each holder of common stock is entitled to one (1) vote for each share of common stock held.

 

The date used for purposes of determining the number of outstanding shares of the voting stock of the Company entitled to vote is September 16, 2024. The record date for determining those stockholders of the Company entitled to receive this Information Statement is the close of business on September 17, 2024. As of the September 16, 2024, the Company had 5,005,170 shares of voting stock outstanding, with all 5,005,170 shares being common stock. All outstanding shares are fully paid and nonassessable.

 

Vote Obtained

 

Section 78.320 of the NRS and Section 1.11 of Article I of our bylaws provide that any action which may be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, via written consent of the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

 

The consenting stockholders voted to approve the corporate actions and their respective approximate ownership percentage of the voting stock of the Company as of September 16, 2024, totaled in the aggregate 57.3% of the outstanding voting stock.

 

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND A PROXY

 

CORPORATE ACTIONS

 

I. APPROVAL OF 2024 EQUITY INCENTIVE PLAN

 

On September 16, 2024, our Board and the Majority Shareholders authorized and approved the adoption of the Company’s 2024 Equity Incentive Plan (the “2024 Equity Incentive Plan”), under which an aggregate of 1,000,000 of our shares of common stock or options to purchase shares of common stock may be issued, and such number of shares of common stock shall be and is hereby reserved for such purpose. The 2024 Equity Incentive Plan is appended to this information statement as Appendix A.

 

 

Administration.

 

Authority to administer and manage the 2024 Equity Incentive Plan shall be vested in the Board of the Company or by the compensation committee set up for such purpose (the “Committee”). The Committee shall consist of two or more directors who are (i) “Independent Directors” (as such term is defined under the rules of the Nasdaq Stock Market) and (ii) “Non-Employee Directors” (as such term is defined in Rule 16b-3), which shall serve at the pleasure of the Board. The Board or the Committee administering the 2024 Equity Incentive Plan (the “Administrator”) shall have full power and authority to designate recipients of options and restricted stock, and to determine the terms and conditions of the respective option and restricted stock agreements (which need not be identical) and to interpret the provisions and supervise the administration of the 2024 Equity Incentive Plan.

 

Eligibility.

 

The persons eligible for participation in the 2024 Equity Incentive Plan as recipients of options or restricted stock shall include directors, officers and employees of, and consultants and advisors to, the Company or any subsidiary; provided that incentive options may only be granted to employees of the Company and any subsidiary.

 

Awards.

 

A maximum of 1,000,000 shares of the Company’s common stock, par value $0.00001 per share shall be subject to the 2024 Equity Incentive Plan. The shares of common stock subject to the 2024 Equity Incentive Plan shall consist of unissued shares, treasury shares or previously issued shares held by any subsidiary of the Company, and such number of shares of common stock shall be and is hereby reserved for such purpose.

 

Options.

 

The purchase price of each share of common stock purchasable under an incentive option shall be determined by the Administrator at the time of grant, but shall not be less than 100% of the Fair Market Value of such share of common stock on the date the option is granted.

 

The term of each option shall be fixed by the Administrator, but no incentive option shall be exercisable more than ten years after the date such option is granted and in the case of an incentive option granted to an optionee who, at the time such incentive option is granted, owns (within the meaning of Section 424(d) of the code) more than 10% of the total combined voting power of all classes of stock of the Company or of any subsidiary, no such incentive option shall be exercisable more than five years after the date such incentive option is granted

 

Change of Control.

 

Upon the occurrence of a change in control, the Administrator may accelerate the vesting of outstanding restricted stock, in whole or in part, as determined by the Administrator, in its sole discretion.

 

EXECUTIVE COMPENSATION

 

Our named executive officers (“NEOs”) for fiscal year 2023, consisting of our principal executive officer, our next two most highly compensated executive officers serving as executive officers as of September 30, 2022, and one additional individual who would have been one of our two most highly compensated executive officers (aside from our principal executive officer) during fiscal year 2023, but for the fact that such individual was not serving as an executive officer as of September 30, 2023, were:

 

●	Masateru Higashida, Chief Executive Officer, President, Treasurer, Secretary and Chairman of the Board until June 2024;

 

 

●	Randell Weaver, who served as our Chief Financial Officer throughout fiscal year 2023 and became Co-Executive Officer and Chief Financial Officer since June 2024 ;

 

Mr. Higashida ceased serving as our Chief Executive Officer, President, Treasurer, Secretary, Chairman of the Board and Chief Marketing Officer on June 7, 2024 and Ms Jianshuang Wang was appointed as our new Co-Chief Executive Officer since June 7, 2024. The employment between Randell Weaver and the Company concluded on August 31, 2024.

 

Summary Compensation Table

 

Name and Principal Position		Year				Salary				Stock Awards				Option Awards				Non-Equity Incentive Plan Compensation				All Other Compensation				Total
Masa Higashida,			2023			$	318,000			$	-			$	-			$	-							$	318,000
Chief Executive Officer (1)			2022			$	300,000			$				$	-			$								$	300,000
Randell Weaver,			2023			$	27,404			$	48,000			$	31,819			$	-							$	107,223
Chief Financial Officer (2)			2022			$	N/A			$				$	-			$									$ N/A
Patrick Shearer,			2023			$	66,250			$				$	-			$								$	66.250
Former Chief Financial Officer (3)			2022			$	250,000			$	-			$	-			$	-							$	250,000
Shana Bowman,			2023			$	165,446			$	-			$	-			$	-							$	165,446
Interim Chief Financial Officer (4)			2022			$	135,000			$				$	-			$								$	135,000

 

(1)	Mr. Higashida was appointed as Chief Executive Officer (principal executive officer) of NuZee, Inc. by the Board of Directors in October 2014.
(2)	Mr. Weaver was appointed as Chief Financial Officer (principal financial officer) of NuZee, Inc. by the Board of Directors in August 2023.
(3)	Mr. Shearer resigned as Chief Financial Officer on January 4, 2023.
(4)	Ms. Bowman was named Interim Chief Financial Officer in January 2023 and served in that role until August 2023.

 

Director Compensation Table

 

The following table shows for the fiscal year ended September 30, 2023 certain information with respect to the compensation of our non-employee directors who served in fiscal year 2023:

 

Name		Fees Earned or Paid in Cash				Stock Awards (1)				Option Awards (1)				Total
Kevin J. Conner (4)		$	72,000			$	50,000			$	-			$	122,000
Tracy Ging (2)		$	56,000			$	-			$	-			$	56,000
J. Chris Jones (5)		$	62,000			$	50,000			$	-			$	112,000
Nobuki Kurita (3)		$	62,000			$	50,000			$	-			$	112,000
David G. Robson (5)		$	62,000			$	50,000			$	-			$	112,000

 

 

(1)	On March 22, 2023, the Company granted 4,398 Restricted Shares of the Company’s common stock to each of the Company’s five independent directors. The restricted shares are scheduled to vest in full on the one-year anniversary of the grant date, subject to each independent director’s continued service as a director of the Company. No options were granted during the fiscal year.
(2)	On September 5, 2023 Tracy Ging notified the Company of her resignation from the Board of Directors. The restricted stock award granted on March 17, 2023 was forfeited upon her resignation.
(3)	On May 2, 2024, Mr. Kurita resigned from the Board of Directors, and Mr. Changzheng Ye was appointed to the Board as a director to fill the vacancy created by Mr. Kurita’s resignation.
(4)	On June 6, 2024, Masateru Higashida and Kevin J. Conner resigned from the Board, and Jianshuang Wang and Yanli Hou were appointed as directors to fill the vacancies created by Mr. Higashida’s and Mr. Conner’s resignations.
(5)	On June 18, 2024, J. Chris Jones, and on June 19, 2024, David G. Robson, resigned from the Board; Jian Liu and Zongmei Huang were appointed as directors to fill the vacancies created by Mr. Jones’ and Mr. Robson’s resignations.

 

Outstanding Equity Awards at September 30, 2023

 

The following table sets forth information regarding outstanding equity awards held by our named executive officers as of September 30, 2023:

 

						Option Awards
Name		Grant Date				Number of Securities Underlying Unexercised Options Exercisable (#)				Number of Securities Underlying Unexercised Options Unexercisable (#)				Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)				Option Exercise Price ($)				Option Expiration Date
Masateru Higashida			7/20/2017				14,477				-								58.80				7/20/2027
			7/2/2021				-				-				12,811	(1)			109.20				7/2/2031
Randell Weaver			8/16/2023				-				-				6,000				8.15				8/16/2033
Shana Bowman			6/2/2021				57				-				115				114.45				6/2/2031

 

(1)	Subject to Mr. Higashida’s continued employment, the performance based options vest, if at all, in fiscal year 2024 based upon our achievement of a specified amount of earnings before income taxes. The employment between Mr. Higashida and the Company ceased on June 7, 2024.

 

Equity Compensation Plan Information

 

Our Board has adopted the 2013 Plan, the 2019 Plan, and the 2023 Plan for the purposes of promoting the long-term success of the Company and the creation of stockholder value. Our stockholders have approved the adoption of the 2013 Plan, the 2019 Plan, and the 2023 Plan. The 2013 Plan provides for the grant of stock options, restricted share awards, and stock appreciation rights. The 2013 Plan expired in October 2023. The 2019 and 2023 Plans provides for the grant of stock options and restricted shares.

 

 

The following table sets forth information concerning the 2013 Plan, the 2019 Plan, and the 2023 Plan as of September 30, 2023:

 

Plan Category		Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)				Weighted- average exercise price of outstanding options, warrants and rights (b)				Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders			96,458			$	150.39				75,010
Equity compensation plans not approved by security holders			-				-				-
Total			96,458			$	150.39				75,010

 

II. APPROVAL OF FILINNG THE CERTIFICATE OF AMENDMENT TO ARTICLES OF INCORPORATION TO CHANGE THE COMPANY’S NAME TO CIMG INC. AND TO CHANGE ITS NASDAQ SYMBOL TO “IMG”

 

On September 16, 2024, our Board and the Majority Shareholders authorized and approved the filing of a Certificate of Amendment to Articles of Incorporation to change the company’s name to CIMG Inc., and to change its Nasdaq symbol to “IMG.”

 

Reasons for the Name Change to CIMG Inc.

 

In July 2024, the Company decided to alter its business and transition into a digital marketing, sales, and distribution entity for consumer products. The Company also recently announced its entry into an exclusive sales and distribution agreement with a maca producer in Asia and anticipates further expansion of its sales channels and product offerings. The Company believes that the name “CIMG Inc.” will refresh its brand name from its current “NuZee” brand and signal its change of business direction.

 

III. APPROVAL OF, FOR PURPOSES OF COMPLYING WITH NASDAQ LISTING RULE 5635(D), THE ISSUANCE OF MORE THAN 20% OF THE COMPANY’S ISSUED AND OUTSTANDING COMMON STOCK PURSUANT TO THE CONVERTIBLE NOTES PURCHASE AGREEMENT TO RAISE AN AGGREGATE OF $1,300,000 WITH CERTAIN INVESTORS.

 

On August 20, 2024, our Board, and on September 16, 2024, the Majority Shareholders authorized and approved, for purposes of complying with Nasdaq Listing Rule 5635(d), the issuance to certain investors of more than 20% of the Corporation’s issued and outstanding common stock pursuant to the terms and conditions of the convertible notes purchase agreement dated August 20, 2024 (the “Purchase Agreement”).

 

Background

 

On August 20, 2024, the Company entered into the Purchase Agreement to raise an aggregate of $1,300,000, with a conversion price of $0.94, with certain investors (the “Notes”). The Notes carry an interest rate of 7% and will mature one year after issuance. The issuance of the Notes is intended to be exempt from registration under the Securities Act, pursuant to Regulation S promulgated under the Securities Act. The first closing of the Notes occurred on September 6, 2024, at which time the Company received purchase amounts of $750,000, and the second closing occurred on September 10, 2024, at which time the Company received purchase amounts of $550,000.

 

The securities potentially issuable pursuant to the Notes include 1,382,977 shares of the Company’s common stock issuable upon conversion of the Convertible Notes at a conversion price of $0.92 (or up to 1,479,787 shares of the Company’s common stock issuable if the Notes are converted pursuant the principal amount plus one year accrued interest).

 

 

Potential Effect of the Purchase Agreement and the Notes

 

Each additional share of common stock that would be issuable to the Notes holder would have the same rights and privileges as each share of our currently outstanding common stock. The issuance of shares of common stock to the Notes holder pursuant to the terms of the Purchase Agreement and the Notes will not affect the rights of the holders of our outstanding common stock, but such issuances will have a dilutive effect on the existing stockholders, including the voting power and economic rights of the existing stockholders, and may result in a decline in our stock price or greater price volatility. Further, any sales in the public market of our shares of common stock issuable to the Notes holder could adversely affect prevailing market prices of our shares of common stock.

 

The Notes are initially convertible into an aggregate of 1,382,977 shares of the Company’s common stock, or up to 1,479,787 shares of the Company’s common stock issuable if the Notes are converted pursuant the principal amount plus one year accrued interest.

 

Additional Information

 

This summary is intended to provide you with basic information concerning the Purchase Agreement and the Notes. The full text of each agreement was included as exhibits to our Current Report on Form 8-K filed with the SEC on August 26, 2024.

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following tables set forth, as of September 16, 2024, the beneficial ownership of our Common Stock by:

 

●	each person, or group of affiliated persons, known by us to beneficially own more than 5% of our Common Stock;
●	each of our named executive officers;
●	each of our directors; and
●	all executive officers and directors as a group.

 

Except as otherwise indicated, all shares are owned directly, and the percentage shown is based on 5,005,170 shares of Common Stock issued and outstanding on September 16, 2024. On December 28, 2022, we completed a l-for-35 reverse stock split, which became effective on December 28, 2022, upon acceptance of the Company’s filing of an amendment to the Articles with the Secretary of State of Nevada (the “Reverse Stock Split”). Unless we indicate otherwise, all share and per share information in this information statement reflects the Reverse Stock Split.

 

Except as otherwise indicated below, information with respect to beneficial ownership has been furnished by each director, officer or beneficial owner of more than five percent (5%) of Common Stock. We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. In addition, the rules include shares of our Common Stock issuable pursuant to the exercise of stock options that are either immediately exercisable or exercisable within 60 days of September 16, 2024 These shares are deemed to be outstanding and beneficially owned by the person holding those options for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws.

 

 

Except as otherwise indicated below, the address of each person listed in the table below is 6107, 6th Floor, Building C4, No.1 Huangchang West Road, Dougezhuang, Chaoyang District, Beijing.

 

Name of Beneficial Owner			Shares of Common Stock Beneficially Owned				Percent of Common Stock Beneficially Owned
Jianshuang Wang			—				—
Zhanzhan Shi			—				—
Zongmei Huang			—				—
Yanli Hou			—				—
Changzheng Ye			—				—
Jian Liu			—				—
All directors, nominees and executive officers as a group (6 persons)			—				—

 

Other Beneficial Owners

 

The following table sets forth certain information regarding beneficial ownership by other persons known to us to own more than 5% of our outstanding common stock as of September 16, 2024, based on 5,005,170 shares of common stock outstanding as of such date.

 

		Amount and Nature of Beneficial Ownership
Name and Address of		Voting Power								Investment Power												Percent of
Beneficial Owner		Sole				Shared				Sole				Shared				Aggregate				Class
JOYER INVESTMENT LIMITED.(1)			542,517				0																10.84	%
DYT INFO PTE. LTD. (2)			794,405				0																15.87	%
METAVERSE INTELLIGENCE TECH LTD.(3)			421,255				0																8.42	%
YY TECH INC.(4)			421,255				0																8.42	%
YANQIN CHEN.(5)			288,461				0																5.76	%
YALAN YANG.(6)			288,461				0																5.76	%
Yumei Liu.(7)			625,447				0																12.50	%
Shelei Jiang.(8)			505,722				0																10.10	%
Wenwen Yu.(9)			421,255				0																8.42	%
Yujie Liu (10)			421,255				0																8.42	%

 

1. Based upon the beneficial ownership report on Schedule 13G filed with the SEC on August 27, 2024, and (i) 5,005,170 shares of common stock issued and outstanding; and (ii) direct ownership of 542,517 shares of common stock.

 

2. Based upon the beneficial ownership report on Schedule 13G filed with the SEC on July 22, 2024, and (i) 5,005,170 shares of common stock issued and outstanding; and (ii) direct ownership of 505,722 shares of common stock.

 

3. Based upon the beneficial ownership report on Schedule 13G filed with the SEC on July 22, 2024, and (i) 5,005,170 shares of common stock issued and outstanding; and (ii) direct ownership of 421,255 shares of common stock.

 

4. Based upon the beneficial ownership report on Schedule 13G filed with the SEC on July 22, 2024, and (i) 5,005,170 shares of common stock issued and outstanding; and (ii) direct ownership of 421,255 shares of common stock.

 

5. Based upon the beneficial ownership report on Schedule 13G filed with the SEC on July 22, 2024, and (i) 5,005,170 shares of common stock issued and outstanding; and (ii) direct ownership of 288,461 shares of common stock.

 

6. Based upon the beneficial ownership report on Schedule 13G filed with the SEC on July 22, 2024, and (i) 5,005,170 shares of common stock issued and outstanding; and (ii) direct ownership of 288,461 shares of common stock.

 

 

7. Based upon the beneficial ownership report on Schedule 13G filed with the SEC on August 27, 2024, and (i) 5,005,170 shares of common stock issued and outstanding; (ii) 542,517 shares of common stock through her direct 100% ownership of JOYER INVESTMENT LIMITED; and (iii) a warrant exercisable to purchase 82,930 shares of common stock beneficially owned through her indirect 100% ownership of Future science and Technology Co. Ltd.

 

8. Based upon the beneficial ownership report on Schedule 13G filed with the SEC on July 22, 2024, and (i) 5,005,170 shares of common stock issued and outstanding; and (ii) direct ownership of 505,722 shares of common stock.

 

9. Based upon the beneficial ownership report on Schedule 13G filed with the SEC on July 22, 2024, and (i) 5,005,170 shares of common stock issued and outstanding; and (ii) direct ownership of 421,255 shares of common stock.

 

10. Based upon the beneficial ownership report on Schedule 13G filed with the SEC on July 22, 2024, and (i) 5,005,170 shares of common stock issued and outstanding; and (ii) direct ownership of 421,255 shares of common stock.

 

INTERESTS OF CERTAIN PERSONS IN THE AUTHORIZATIONS

 

Saved as disclosed in this Information Statement, no other officer, director, nominee for election as a director, associate of any director, executive officer or nominee, or beneficial owner of more than 5% of our common stock has any substantial interest in the matters acted upon by our Board and stockholders, other than his role as an officer, director or beneficial owner.

 

ADDITIONAL INFORMATION

 

Householding of Materials

 

Some banks, brokers, and other nominee record holders may be participating in the practice of “householding” information statements, proxy statements and annual reports. This means that only one copy of our Information Statement may have been sent to multiple Company stockholders in each household unless otherwise instructed by such Company stockholders. We will deliver promptly a separate copy of this Information Statement (including a copy of any and all of the information that has been incorporated by reference in this Information Statement) to any Company stockholder upon written or oral request to us, at 6107, 6th Floor, Building C4, No.1 Huangchang West Road, Dougezhuang, Chaoyang District, Beijing, telephone + 86 18518579917. Any Company stockholder wishing to receive separate copies of our information statements, proxy statement or annual report to Company stockholders in the future, or any Company stockholder who is receiving multiple copies and would like to receive only one copy per household, should contact the Company stockholder’s bank, broker, or other nominee record holder, or the Company stockholder may contact us at the above address and phone number.

 

Costs

 

The cost of delivering this Information Statement, including the preparation, assembly and mailing of the Information Statement, as well as the cost of forwarding this material to the beneficial owners of our Common Stock, will be borne by us. The Company may reimburse brokerage firms and others for expenses in forwarding Information Statement materials to the beneficial owners of our Common Stock.

 

Available Information

 

We are subject to the disclosure requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith, file reports, information statements and other information, including annual and quarterly reports on Form 10-K and 10-Q, respectively, with the SEC. In addition, the SEC maintains a website on the Internet (http://www.sec.gov) that contains reports, information statements and other information regarding issuers that file electronically with the SEC through the Electronic Data Gathering, Analysis and Retrieval System.

 

By Order of the Board,
/s/ Jianshuang Wang
Jianshuang Wang

Chief Executive Officer and Chairman of the Board of Directors

 

September 24, 2024

 

 

Appendix A

 

CIMG INC.

 

2024 SHARE INCENTIVE PLAN

 

1.

Purpose of the Plan.

 

This 2024 Equity Incentive Plan (the “Plan”) is intended as an incentive, to retain in the employment of and as directors, officers, consultants, advisors and employees to CIMG Inc., a Nevada corporation (the “Company”), and any Subsidiary of the Company, within the meaning of Section 424(f) of the United States Internal Revenue Code of 1986, as amended (the “Code”), persons of training, experience and ability, to attract new directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage the sense of proprietorship and to stimulate the active interest of such persons in the development and financial success of the Company and its Subsidiaries.

 

It is further intended that certain options granted pursuant to the Plan shall constitute incentive stock options within the meaning of Section 422 of the Code (the “Incentive Options”) while certain other options granted pursuant to the Plan shall be nonqualified stock options (the “Nonqualified Options”). Incentive Options and Nonqualified Options are hereinafter referred to collectively as “Options.”

 

The Company intends that the Plan meet the requirements of Rule 16b-3 (“Rule 16b-3”) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that transactions of the type specified in subparagraphs (c) to (f) inclusive of Rule 16b-3 by officers and directors of the Company pursuant to the Plan will be exempt from the operation of Section 16(b) of the Exchange Act. In all cases, the terms, provisions, conditions and limitations of the Plan shall be construed and interpreted consistent with the Company’s intent as stated in this Section 1.

 

2.

Administration of the Plan.

 

The authority to manage the operation of and administer the Plan shall be vested in the Board of Directors of the Company (the “Board”) or the Compensation Committee (the “Committee”) as delegated by the Board. The Board or Committee if so delegated by the Board shall be hereinafter referred to as the “Administrator.” To qualify as the Administrator, the Committee shall consist of and maintain two or more directors who are (i) “Independent Directors” (as such term is defined under the rules of the NASDAQ Stock Market) and (ii) “Non-Employee Directors” (as such term is defined in Rule 16b-3), which shall serve at the pleasure of the Board. The Administrator subject to Sections 3, 5 and 6 hereof, shall have full power and authority to designate recipients of Options and restricted stock (“Restricted Stock”), and to determine the terms and conditions of the respective Option and Restricted Stock agreements (which need not be identical) and to interpret the provisions and supervise the administration of the Plan. The Administrator shall have the authority, without limitation, to designate which Options granted under the Plan shall be Incentive Options and which shall be Nonqualified Options. To the extent any Option does not qualify as an Incentive Option, it shall constitute a separate Nonqualified Option.

 

Subject to the provisions of the Plan, the Administrator shall interpret the Plan and all Options and Restricted Stock (the “Securities”) granted under the Plan, shall make such rules as it deems necessary for the proper administration of the Plan, shall make all other determinations necessary or advisable for the administration of the Plan and shall correct any defects or supply any omission or reconcile any inconsistency in the Plan or in any Securities granted under the Plan in the manner and to the extent that the Administrator deems desirable to carry into effect the Plan or any Securities. The act or determination of a majority of the Administrator shall be the act or determination of the Administrator and any decision reduced to writing and signed by all of the members of the Administrator shall be fully effective as if it had been made by a majority of the Administrator at a meeting duly held for such purpose. Subject to the provisions of the Plan, any action taken or determination made by the Administrator pursuant to this and the other Sections of the Plan shall be conclusive on all parties.

 

 

In the event that for any reason the Committee is unable to act or if the Committee at the time of any grant, award or other acquisition under the Plan does not consist of two or more Non-Employee Directors, or if there shall be no such Committee, or if the Board otherwise determines to administer the Plan, then the Plan shall be administered by the Board and any such grant, award or other acquisition may be approved or ratified in any other manner contemplated by subparagraph (d) of Rule 16b-3.

 

3.

Designation of Optionees and Grantees.

 

The persons eligible for participation in the Plan as recipients of Options (the “Optionees”) or Restricted Stock (the “Grantees” and together with Optionees, the “Participants”) shall include directors, officers and employees of, and consultants and advisors to, the Company or any Subsidiary; provided that Incentive Options may only be granted to employees of the Company and any Subsidiary. In selecting Participants, and in determining the number of shares to be covered by each Option or award of Restricted Stock granted to Participants, the Administrator may consider any factors it deems relevant, including, without limitation, the office or position held by the Participant or the Participant’s relationship to the Company, the Participant’s degree of responsibility for and contribution to the growth and success of the Company or any Subsidiary, the Participant’s length of service, promotions and potential. A Participant who has been granted an Option or Restricted Stock hereunder may be granted an additional Option or Options, or Restricted Stock if the Administrator shall so determine.

 

4.

Stock Reserved for the Plan.

 

Subject to adjustment as provided in Section 8 hereof, a maximum of 1,000,000 shares of the Company’s common stock, par value $0.00001 per share (the “Common Stock”), shall be subject to the Plan. The shares of Common Stock subject to the Plan shall consist of unissued shares, treasury shares or previously issued shares held by any Subsidiary of the Company, and such number of shares of Common Stock shall be and is hereby reserved for such purpose. Any of such shares of Common Stock that may remain unissued and that are not subject to outstanding Options at the termination of the Plan shall cease to be reserved for the purposes of the Plan, but until termination of the Plan the Company shall at all times reserve a sufficient number of shares of Common Stock to meet the requirements of the Plan. Should any Securities expire or be canceled prior to its exercise, satisfaction of conditions or vesting in full, as applicable, or should the number of shares of Common Stock to be delivered upon the exercise or vesting in full of an Option or award of Restricted Stock be reduced for any reason, the shares of Common Stock theretofore subject to such Option or Restricted Stock, as applicable, may be subject to future Options or Restricted Stock under the Plan.

 

5.

Terms and Conditions of Options.

 

Options granted under the Plan shall be subject to the following conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable:

 

(a) Option Price. The purchase price of each share of Common Stock purchasable under an Incentive Option shall be determined by the Administrator at the time of grant, but shall not be less than 100% of the Fair Market Value (as defined below) of such share of Common Stock on the date the Option is granted, unless otherwise permitted pursuant to applicable Nasdaq Listing Rules and applicable regulations; provided, however, that with respect to an Optionee who, at the time such Incentive Option is granted, owns (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or of any Subsidiary, the purchase price per share of Common Stock shall be at least 110% of the Fair Market Value per share of Common Stock on the date of grant. The purchase price of each share of Common Stock purchasable under a Nonqualified Option shall not be less than 100% of the Fair Market Value of such share of Common Stock on the date the Option is granted. The exercise price for each Option shall be subject to adjustment as provided in Section 8 below. “Fair Market Value” means the closing price on the final trading day immediately prior to the grant date of the Common Stock on the NASDAQ Capital Market or other principal securities exchange on which shares of Common Stock are listed (if the shares of Common Stock are so listed), or, if not so listed, the mean between the closing bid and asked prices of publicly traded shares of Common Stock in the over the counter market, or, if such bid and asked prices shall not be available, as reported by any nationally recognized quotation service selected by the Company, or as determined by the Administrator in a manner consistent with the provisions of the Code. Anything in this Section 5(a) to the contrary notwithstanding, in no event shall the purchase price of a share of Common Stock be less than the minimum price permitted under the rules and policies of any national securities exchange on which the shares of Common Stock are listed.

 

 

(b) Option Term. The term of each Option shall be fixed by the Administrator, but no Option shall be exercisable more than ten years after the date such Option is granted and in the case of an Incentive Option granted to an Optionee who, at the time such Incentive Option is granted, owns (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or of any Subsidiary, no such Incentive Option shall be exercisable more than five years after the date such Incentive Option is granted.

 

(c) Exercisability. Subject to Section 5(j) hereof, Options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator at the time of grant; provided, however, that in the absence of any Option vesting periods designated by the Administrator at the time of grant, Options shall vest and become exercisable as to one-third of the total number of shares subject to the Option on each of the first, second and third anniversaries of the date of grant; and provided further that no Options shall be exercisable until such time as any vesting limitation required by Section 16 of the Exchange Act, and related rules, shall be satisfied if such limitation shall be required for continued validity of the exemption provided under Rule 16b-3(d)(3).

 

Upon the occurrence of a “Change in Control” (as hereinafter defined), the Administrator may accelerate the vesting and exercisability of outstanding Options, in whole or in part, as determined by the Administrator in its sole discretion. In its sole discretion, the Administrator may also determine that, upon the occurrence of a Change in Control, each outstanding Option shall terminate within a specified number of days after notice to the Optionee thereunder, and each such Optionee shall receive, with respect to each share of Common Stock subject to such Option, an amount equal to the excess of the Fair Market Value of such shares immediately prior to such Change in Control over the exercise price per share of such Option; such amount shall be payable in cash, in one or more kinds of property (including the property, if any, payable in the transaction) or a combination thereof, as the Administrator shall determine in its sole discretion.

 

For purposes of the Plan, unless otherwise defined in an employment agreement between the Company and the relevant Optionee, a Change in Control shall be deemed to have occurred if:

 

(i) a tender offer (or series of related offers) shall be made and consummated for the ownership of 50% or more of the outstanding voting securities of the Company, unless as a result of such tender offer more than 50% of the outstanding voting securities of the surviving or resulting corporation shall be owned in the aggregate by the stockholders of the Company (as of the time immediately prior to the commencement of such offer), any employee benefit plan of the Company or its Subsidiaries, and their affiliates;

 

(ii) the Company shall be merged or consolidated with another corporation, unless as a result of such merger or consolidation more than 50% of the outstanding voting securities of the surviving or resulting corporation shall be owned in the aggregate by the stockholders of the Company (as of the time immediately prior to such transaction), any employee benefit plan of the Company or its Subsidiaries, and their affiliates;

 

(iii) the Company shall sell substantially all of its assets to another corporation that is not wholly owned by the Company, unless as a result of such sale more than 50% of such assets shall be owned in the aggregate by the stockholders of the Company (as of the time immediately prior to such transaction), any employee benefit plan of the Company or its Subsidiaries and their affiliates; or

 

 

(iv) a Person (as defined below) shall acquire 50% or more of the outstanding voting securities of the Company (whether directly, indirectly, beneficially or of record), unless as a result of such acquisition more than 50% of the outstanding voting securities of the surviving or resulting corporation shall be owned in the aggregate by the stockholders of the Company (as of the time immediately prior to the first acquisition of such securities by such Person), any employee benefit plan of the Company or its Subsidiaries, and their affiliates.

 

Notwithstanding the foregoing, if Change of Control is defined in an employment agreement between the Company and the relevant Optionee, then, with respect to such Optionee, Change of Control shall have the meaning ascribed to it in such employment agreement.

 

For purposes of this Section 5(c), ownership of voting securities shall take into account and shall include ownership as determined by applying the provisions of Rule 13d-3(d)(I)(i) (as in effect on the date hereof) under the Exchange Act. In addition, for such purposes, “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof; provided, however, that a Person shall not include (A) the Company or any of its Subsidiaries; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Subsidiaries; (C) an underwriter temporarily holding securities pursuant to an offering of such securities; or (D) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportion as their ownership of stock of the Company.

 

(d) Method of Exercise. Options to the extent then exercisable may be exercised in whole or in part at any time during the option period, by giving written notice to the Company specifying the number of shares of Common Stock to be purchased, accompanied by payment in full of the purchase price, in cash, or by check or such other instrument as may be acceptable to the Administrator. As determined by the Administrator, in its sole discretion, at or after grant, payment in full or in part may be made at the election of the Optionee (i) in the form of Common Stock owned by the Optionee (based on the Fair Market Value of the Common Stock which is not the subject of any pledge or security interest, (ii) in the form of shares of Common Stock withheld by the Company from the shares of Common Stock otherwise to be received with such withheld shares of Common Stock having a Fair Market Value equal to the exercise price of the Option, or (iii) by a combination of the foregoing, such Fair Market Value determined by applying the principles set forth in Section 5(a), provided that the combined value of all cash and cash equivalents and the Fair Market Value of any shares surrendered to the Company is at least equal to such exercise price and except with respect to (ii) above, such method of payment will not cause a disqualifying disposition of all or a portion of the Common Stock received upon exercise of an Incentive Option. An Optionee shall have the right to dividends and other rights of a stockholder with respect to shares of Common Stock purchased upon exercise of an Option at such time as the Optionee (i) has given written notice of exercise and has paid in full for such shares, and (ii) has satisfied such conditions that may be imposed by the Company with respect to the withholding of taxes.

 

(e) Non-transferability of Options. Options are not transferable and may be exercised solely by the Optionee during his lifetime or after his death by the person or persons entitled thereto under his will or the laws of descent and distribution. The Administrator, in its sole discretion, may permit a transfer of a Nonqualified Option to (i) a trust for the benefit of the Optionee, (ii) a member of the Optionee’s immediate family (or a trust for his or her benefit) or (iii) pursuant to a domestic relations order. Any attempt to transfer, assign, pledge or otherwise dispose of, or to subject to execution, attachment or similar process, any Option contrary to the provisions hereof shall be void and ineffective and shall give no right to the purported transferee.

 

(f) Termination by Death. Unless otherwise determined by the Administrator, if any Optionee’s employment with or service to the Company or any Subsidiary terminates by reason of death, the Option may thereafter be exercised, to the extent then exercisable (or on such accelerated basis as the Administrator shall determine at or after grant), by the legal representative of the estate or by the legatee of the Optionee under the will of the Optionee, for a period of one (1) year after the date of such death (or, if later, such time as the Option may be exercised pursuant to Section 14(d) hereof) or until the expiration of the stated term of such Option as provided under the Plan, whichever period is shorter.

 

 

(g) Termination by Reason of Disability. Unless otherwise determined by the Administrator, if any Optionee’s employment with or service to the Company or any Subsidiary terminates by reason of Disability (as defined below), then any Option held by such Optionee may thereafter be exercised, to the extent it was exercisable at the time of termination due to Disability (or on such accelerated basis as the Administrator shall determine at or after grant), but may not be exercised after ninety (90) days after the date of such termination of employment or service (or, if later, such time as the Option may be exercised pursuant to Section 14(d) hereof) or the expiration of the stated term of such Option, whichever period is shorter; provided, however, that, if the Optionee dies within such ninety (90) day period, any unexercised Option held by such Optionee shall thereafter be exercisable to the extent to which it was exercisable at the time of death for a period of one (1) year after the date of such death (or, if later, such time as the Option may be exercised pursuant to Section 14(d) hereof) or for the stated term of such Option, whichever period is shorter. “Disability” shall mean an Optionee’s total and permanent disability; provided, that if Disability is defined in an employment agreement between the Company and the relevant Optionee, then, with respect to such Optionee, Disability shall have the meaning ascribed to it in such employment agreement

 

(h) Termination by Reason of Retirement. Unless otherwise determined by the Administrator, if any Optionee’s employment with or service to the Company or any Subsidiary terminates by reason of Normal or Early Retirement (as such terms are defined below), any Option held by such Optionee may thereafter be exercised to the extent it was exercisable at the time of such Retirement (or on such accelerated basis as the Administrator shall determine at or after grant), but may not be exercised after ninety (90) days after the date of such termination of employment or service (or, if later, such time as the Option may be exercised pursuant to Section 14(d) hereof) or the expiration of the stated term of such Option, whichever date is earlier; provided, however, that, if the Optionee dies within such ninety (90) day period, any unexercised Option held by such Optionee shall thereafter be exercisable, to the extent to which it was exercisable at the time of death, for a period of one (1) year after the date of such death (or, if later, such time as the Option may be exercised pursuant to Section 14(d) hereof) or for the stated term of such Option, whichever period is shorter.

 

For purposes of this paragraph (h), “Normal Retirement” shall mean retirement from active employment with the Company or any Subsidiary on or after the normal retirement date specified in the applicable Company or Subsidiary pension plan or if no such pension plan, age 65, and “Early Retirement” shall mean retirement from active employment with the Company or any Subsidiary pursuant to the early retirement provisions of the applicable Company or Subsidiary pension plan or if no such pension plan, age 55.

 

(i) Other Terminations. Unless otherwise determined by the Administrator upon grant, if any Optionee’s employment with or service to the Company or any Subsidiary is terminated by such Optionee for any reason other than death, Disability, Normal or Early Retirement or Good Reason (as defined below), the Option shall thereupon terminate, except that the portion of any Option that was exercisable on the date of such termination of employment or service may be exercised for the lesser of ninety (90) days after the date of termination (or, if later, such time as the Option may be exercised pursuant to Section 14(d) hereof) or the balance of such Option’s term, which ever period is shorter. The transfer of an Optionee from the employ of or service to the Company to the employ of or service to a Subsidiary, or vice versa, or from one Subsidiary to another, shall not be deemed to constitute a termination of employment or service for purposes of the Plan.

 

(i) In the event that the Optionee’s employment or service with the Company or any Subsidiary is terminated by the Company or such Subsidiary for “cause” any unexercised portion of any Option shall immediately terminate in its entirety. For purposes hereof, unless otherwise defined in an employment agreement between the Company and the relevant Optionee, “Cause” shall exist upon a good-faith determination by the Board, following a hearing before the Board at which an Optionee was represented by counsel and given an opportunity to be heard, that such Optionee has been accused of fraud, dishonesty or act detrimental to the interests of the Company or any Subsidiary of Company or that such Optionee has been accused of or convicted of an act of willful and material embezzlement or fraud against the Company or of a felony under any state or federal statute; provided, however, that it is specifically understood that “Cause” shall not include any act of commission or omission in the good-faith exercise of such Optionee’s business judgment as a director, officer or employee of the Company, as the case may be, or upon the advice of counsel to the Company. Notwithstanding the foregoing, if Cause is defined in an employment agreement between the Company and the relevant Optionee, then, with respect to such Optionee, Cause shall have the meaning ascribed to it in such employment agreement.

 

 

(ii) In the event that an Optionee is removed as a director, officer or employee by the Company at any time other than for “Cause” or resigns as a director, officer or employee for “Good Reason” the Option granted to such Optionee may be exercised by the Optionee, to the extent the Option was exercisable on the date such Optionee ceases to be a director, officer or employee. Such Option may be exercised at any time within one (1) year after the date the Optionee ceases to be a director, officer or employee (or, if later, such time as the Option may be exercised pursuant to Section 14(d) hereof), or the date on which the Option otherwise expires by its terms; whichever period is shorter, at which time the Option shall terminate; provided, however, if the Optionee dies before the Options terminate and are no longer exercisable, the terms and provisions of Section 5(f) shall control. For purposes of this Section 5(i), and unless otherwise defined in an employment agreement between the Company and the relevant Optionee, Good Reason shall exist upon the occurrence of the following:

 

	(A)	the assignment to Optionee of any duties inconsistent with the position in the Company that Optionee held immediately prior to the assignment;
	(B)	a Change of Control resulting in a significant adverse alteration in the status or conditions of Optionee’s participation with the Company or other nature of Optionee’s responsibilities from those in effect prior to such Change of Control, including any significant alteration in Optionee’s responsibilities immediately prior to such Change in Control; and
	(C)	the failure by the Company to continue to provide Optionee with benefits substantially similar to those enjoyed by Optionee prior to such failure.

 

Notwithstanding the foregoing, if Good Reason is defined in an employment agreement between the Company and the relevant Optionee, then, with respect to such Optionee, Good Reason shall have the meaning ascribed to it in such employment agreement.

 

(j) Limit on Value of Incentive Option. The aggregate Fair Market Value, determined as of the date the Incentive Option is granted, of Common Stock for which Incentive Options are exercisable for the first time by any Optionee during any calendar year under the Plan (and/or any other stock option plans of the Company or any Subsidiary) shall not exceed $100,000. Should it be determined that an Incentive Stock Option granted under the Plan exceeds such maximum for any reason other than a failure in good faith to value the Stock subject to such option, the excess portion of such option shall be considered a Nonqualified Option. To the extent the employee holds two (2) or more such Options which become exercisable for the first time in the same calendar year, the foregoing limitation on the exercisability of such Option as Incentive Stock Options under the Federal tax laws shall be applied on the basis of the order in which such Options are granted. If, for any reason, an entire Option does not qualify as an Incentive Stock Option by reason of exceeding such maximum, such Option shall be considered a Nonqualified Option.

 

6.

Terms and Conditions of Restricted Stock.

 

Restricted Stock may be granted under this Plan aside from, or in association with, any other award and shall be subject to the following conditions and shall contain such additional terms and conditions (including provisions relating to the acceleration of vesting of Restricted Stock upon a Change of Control), not inconsistent with the terms of the Plan, as the Administrator shall deem desirable:

 

(a) Grantee rights. A Grantee shall have no rights to an award of Restricted Stock unless and until Grantee accepts the award within the period prescribed by the Administrator and, if the Administrator shall deem desirable, makes payment to the Company in cash, or by check or such other instrument as may be acceptable to the Administrator. After acceptance and issuance of a certificate or certificates, as provided for below, the Grantee shall have the rights of a stockholder with respect to Restricted Stock subject to the non-transferability and forfeiture restrictions described in Section 6(d) below.

 

 

(b) Issuance of Certificates. The Company shall issue in the Grantee’s name a certificate or certificates for the shares of Common Stock associated with the award promptly after the Grantee accepts such award.

 

(c) Delivery of Certificates. Unless otherwise provided, any certificate or certificates issued evidencing shares of Restricted Stock shall not be delivered to the Grantee until such shares are free of any restrictions specified by the Administrator at the time of grant.

 

(d) Forfeitability, Non-transferability of Restricted Stock. Shares of Restricted Stock are forfeitable until the terms of the Restricted Stock grant have been satisfied. Shares of Restricted Stock are not transferable until the date on which the Administrator has specified such restrictions have lapsed. Unless otherwise provided by the Administrator at or after grant, distributions in the form of dividends or otherwise of additional shares or property in respect of shares of Restricted Stock shall be subject to the same restrictions as such shares of Restricted Stock.

 

(e) Change of Control. Upon the occurrence of a Change in Control as defined in Section 5(c), the Administrator may accelerate the vesting of outstanding Restricted Stock, in whole or in part, as determined by the Administrator, in its sole discretion.

 

(f) Termination of Employment. Unless otherwise determined by the Administrator at or after grant, in the event the Grantee ceases to be an employee or otherwise associated with the Company for any other reason, all shares of Restricted Stock theretofore awarded to him which are still subject to restrictions shall be forfeited and the Company shall have the right to complete the blank stock power. The Administrator may provide (on or after grant) that restrictions or forfeiture conditions relating to shares of Restricted Stock will be waived in whole or in part in the event of termination resulting from specified causes, and the Administrator may in other cases waive in whole or in part restrictions or forfeiture conditions relating to Restricted Stock.

 

7.

Term of Plan.

 

No Securities shall be granted pursuant to the Plan on or after the date which is ten years from the effective date of the Plan, but Options and awards of Restricted Stock theretofore granted may extend beyond that date.

 

8.

Capital Change of the Company.

 

In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, or other change in corporate structure affecting the Common Stock of the Company, the Administrator shall make an appropriate and equitable adjustment in the number and kind of shares reserved for issuance under the Plan and (A) in the number and option price of shares subject to outstanding Options granted under the Plan, to the end that after such event each Optionee’s proportionate interest shall be maintained (to the extent possible) as immediately before the occurrence of such event. The Administrator shall, to the extent feasible, make such other adjustments as may be required under the tax laws so that any Incentive Options previously granted shall not be deemed modified within the meaning of Section 424(h) of the Code. Appropriate adjustments shall also be made in the case of outstanding Restricted Stock granted under the Plan.

 

The adjustments described above will be made only to the extent consistent with continued qualification of the Option under Section 422 of the Code (in the case of an Incentive Option) and Section 409A of the Code.

 

 

9.

Purchase for Investment/Conditions.

 

Unless the Options and shares covered by the Plan have been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the Company has determined that such registration is unnecessary, each person exercising or receiving Securities under the Plan may be required by the Company to give a representation in writing that he is acquiring the securities for his own account for investment and not with a view to, or for sale in connection with, the distribution of any part thereof. The Administrator may impose any additional or further restrictions on awards of Securities as shall be determined by the Administrator at the time of award.

 

10.

Taxes.

 

(a) The Company may make such provisions as it may deem appropriate, consistent with applicable law, in connection with any Securities granted under the Plan with respect to the withholding of any taxes (including income or employment taxes) or any other tax matters.

 

(b) If any Grantee, in connection with the acquisition of Restricted Stock, makes the election permitted under Section 83(b) of the Code (that is, an election to include in gross income in the year of transfer the amounts specified in Section 83(b)), such Grantee shall notify the Company of the election with the Internal Revenue Service pursuant to regulations issued under the authority of Code Section 83(b).

 

(c) If any Grantee shall make any disposition of shares of Common Stock issued pursuant to the exercise of an Incentive Option under the circumstances described in Section 421(b) of the Code (relating to certain disqualifying dispositions), such Grantee shall notify the Company of such disposition within ten (10) days hereof.

 

11.

Effective Date of Plan.

 

The Plan shall be effective on September 16, 2024 when the Plan was approved by majority vote of the Company’s stockholders on September 16, 2024.

 

12.

Amendment and Termination.

 

The Board may amend, suspend, or terminate the Plan, except that no amendment shall be made that would impair the rights of any Participant under Securities theretofore granted without the Participant’s consent, and except that no amendment shall be made which, without the approval of the stockholders of the Company would:

 

(a) materially increase the number of shares that may be issued under the Plan, except as is provided in Section 8;

 

(b) materially increase the benefits accruing to the Participants under the Plan;

 

(c) materially modify the requirements as to eligibility for participation in the Plan;

 

(d) decrease the exercise price of an Incentive Option to less than 100% of the Fair Market Value per share of Common Stock on the date of grant thereof or the exercise price of a Nonqualified Option to less than 100% of the Fair Market Value per share of Common Stock on the date of grant thereof;

 

(e) extend the term of any Option beyond that provided for in Section 5(b);

 

(f) except as otherwise provided in Sections 5(d) and 8 hereof, reduce the exercise price of outstanding Options or effect repricing through cancellations and re-grants of new Options;

 

(g) increase the number of shares of Common Stock to be issued or issuable under the Plan to an amount that is equal to or in excess of 19.99% of the number of shares of Common Stock outstanding before the issuance of the stock or securities; or

 

 

(h) otherwise require stockholder approval pursuant to the rules and regulations of the NASDAQ Stock Market.

 

Subject to the forgoing, the Administrator may amend the terms of any Option theretofore granted, prospectively or retrospectively, but no such amendment shall impair the rights of any Optionee without the Optionee’s consent.

 

It is the intention of the Board that the Plan comply strictly with the provisions of Section 409A of the Code and Treasury Regulations and other Internal Revenue Service guidance promulgated thereunder (the “Section 409A Rules”) and the Administrator shall exercise its discretion in granting awards hereunder (and the terms of such awards), accordingly. The Plan and any grant of an award hereunder may be amended from time to time (without, in the case of an award, the consent of the Participant) as may be necessary or appropriate to comply with the Section 409A Rules.

 

13.

Government Regulations.

 

The Plan, and the grant and exercise or conversion, as applicable, of Securities hereunder, and the obligation of the Company to issue and deliver shares under such Securities shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies, national securities exchanges and interdealer quotation systems as may be required.

 

14.

General Provisions.

 

(a) Certificates. All certificates for shares of Common Stock delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Administrator may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, or other securities commission having jurisdiction, any applicable Federal or state securities law, any stock exchange or interdealer quotation system upon which the Common Stock is then listed or traded and the Administrator may cause a legend or legends to be placed on any such certificates to make appropriate reference to such restrictions.

 

(b) Employment Matters. Neither the adoption of the Plan nor any grant or award under the Plan shall confer upon any Participant who is an employee of the Company or any Subsidiary any right to continued employment or, in the case of a Participant who is a director, continued service as a director, with the Company or a Subsidiary, as the case may be, nor shall it interfere in any way with the right of the Company or any Subsidiary to terminate the employment of any of its employees, the service of any of its directors or the retention of any of its consultants or advisors at any time.

 

(c) Limitation of Liability. No member of the Administrator, or any officer or employee of the Company acting on behalf of the Administrator, shall be personally liable for any action, determination or interpretation taken or made in good faith with respect to the Plan, and all members of the Administrator and each and any officer or employee of the Company acting on their behalf shall, to the extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, determination or interpretation.

 

(d) Registration of Stock. Notwithstanding any other provision in the Plan, no Option may be exercised unless and until the Common Stock to be issued upon the exercise thereof has been registered under the Securities Act and applicable state securities laws, or are, in the opinion of counsel to the Company, exempt from such registration in the United States. The Company shall not be under any obligation to register under applicable federal or state securities laws any Common Stock to be issued upon the exercise of an Option granted hereunder in order to permit the exercise of an Option and the issuance and sale of the Common Stock subject to such Option, although the Company may in its sole discretion register such Common Stock at such time as the Company shall determine. If the Company chooses to comply with such an exemption from registration, the Common Stock issued under the Plan may, at the direction of the Administrator, bear an appropriate restrictive legend restricting the transfer or pledge of the Common Stock represented thereby, and the Administrator may also give appropriate stop transfer instructions with respect to such Common Stock to the Company’s transfer agent.

 

 

15.

Non-Uniform Determinations.

 

The Administrator’s determinations under the Plan, including, without limitation, (i) the determination of the Participants to receive awards, (ii) the form, amount and timing of such awards, (iii) the terms and provisions of such awards and (ii) the agreements evidencing the same, need not be uniform and may be made by it selectively among Participants who receive, or who are eligible to receive, awards under the Plan, whether or not such Participants are similarly situated.

 

16.

Governing Law.

 

The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the internal laws of the State of Nevada, without giving effect to principles of conflicts of laws, and applicable federal law.

 

 

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