PROXY STATEMENT
FOR BOARD OF DIRECTORS’ PROPOSAL
ON OCTOBER 2, 2013
This Proxy Statement is being provided to you by Great China Mania Holdings, Inc.’s Board of Directors (the “Board”).
INFORMATION ABOUT THE PROXY AND VOTING
Who can vote?
To be able to vote, you must have been a Great China Mania Holdings, Inc. (the “Company”) shareholder of record at the close of business on October 1, 2013. Shareholders of record who own our voting securities at the close of business on October 7, 2013 (the “Record Date”) are entitled to vote on the proposal.
How many votes do I have?
Each share of our common stock that you own on the Record Date entitles you to one vote on each matter that is voted on.
Is my vote important?
Your vote is important no matter how many shares you own. Please take the time to vote. Take a moment to read the instructions below. Choose the way to vote that is easiest and most convenient for you and cast your vote as soon as possible.
How do I vote?
If you are the “record holder” of your shares, meaning that you own your shares in your own name and not through a bank or brokerage firm, you may vote by mail. You may vote by completing and signing the Proxy Card enclosed with this Proxy Statement and promptly mailing it in the enclosed postage-prepaid envelope. You do not need to put a stamp on the enclosed envelope if you mail it in the United States. The shares you own will be voted according to your instructions on the Proxy Card you mail. If you return the Proxy Card, but do not give any instructions on a particular matter described in this Proxy Statement, the shares you own will be voted in accordance with the recommendations of our Board.
Who is soliciting my proxy?
Our Board is soliciting your proxy to vote on its proposal to effect a one-for-twenty reverse split of the Company’s common stock. By completing and returning a proxy card, you are authorizing the proxy holder to vote your shares as you have instructed.
What is the difference between holding shares as a stockholder of record and as a beneficial owner?
If your shares are registered directly in your name with our transfer agent, Island Stock Transfer, you are considered, with respect to those shares, the “stockholder of record.” The Notice has been directly sent to you by us. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial owner” of shares held in “street name.” The Notice has been forwarded to you by your broker, bank, or company appointed designee. As the beneficial owner, you have the right to direct your broker, bank, or company appointed designee on how to vote your shares by following their instructions which are included with this proxy, if applicable.
Can I change my vote after I have mailed my Proxy Card or after I have voted my shares?
Yes. You can change your vote and revoke your proxy at any time before the polls close at 5:00 p.m. EST on November 15, 2013 by doing any one of the following things:
|
·
|
Signing another proxy with a later date; or
|
|
·
|
Giving our Corporate Secretary a written notice that you want to revoke your proxy.
|
Can I vote if my shares are held in “street name”?
If the shares you own are held in “street name” by a brokerage firm, your brokerage firm, as the record holder of your shares, is required to vote your shares according to your instructions. In order to vote your shares, you will need to follow the directions your brokerage firm provides to you. Many brokers also offer the option of voting over the Internet or by telephone, instructions for which would be provided by your brokerage firm on your vote instruction form.
If your shares are held in street name, you must bring an account statement or letter from your bank or brokerage firm showing that you are the beneficial owner of the shares as of the Record Date, October 7, 2013. To be able to vote your shares held in street name, you will need to obtain a Proxy Card from the holder of record, i.e. your broker.
What if I do not mark the boxes on my Proxy Card?
Any Proxy Card returned without directions given will be voted “
FOR
” the proposal presented.
Who pays for the solicitation of Proxies?
The solicitation of proxies in the enclosed form is made on behalf of the Board. We pay all costs to solicit these proxies. Our officers, directors and employees may solicit proxies but will not be additionally compensated for such activities. We are also working with brokerage houses and other custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of shares held of record by such institutions and persons. We will reimburse their reasonable expenses.
If I don’t vote, how will the shares I own in my brokerage account be voted?
Abstentions and broker non-votes typically will not be counted for purposes of approving any of the matters. A broker non-vote generally occurs when a broker or nominee who holds shares in street name for a customer does not have authority to vote on certain non-routine matters because its customer has not provided any voting instructions on the matter. Non-routine matters would be those matters more likely to affect the structure and operations of the company, which would have a greater impact on the value of the underlying security. Examples of non-routine matters would include, among other things, decisions as to corporate restructuring, poison pill provisions, and changes in capitalization. In general, routine matters are those matters that do not propose to change the structure, bylaws or operations of the company. An example of such matters would include, among other things, approval of the auditors. Therefore, abstentions and broker non-votes generally have no effect under Florida law with respect to routine matters which require the approval of only a majority of the shares of common stock voting on the proposal
.
However, with respect to non-routine matters, abstentions and broker non-votes generally have the effect of a vote “against” a non-routine proposal since a majority of the shares of common stock outstanding must be voted in present or by proxy. If your shares are held in the name of a brokerage firm, and you do not tell your broker how to vote your shares (a "broker non-vote"), the broker can vote them as it sees fit only on matters that are determined to be routine, and not on any other proposal.
What vote is required for each item?
Authorization and approval for a reverse split of the common stock of the Company in the ratio of one-for-twenty (1:20).
The affirmative vote of a majority of the total number of votes cast “for” the amendment must exceed the votes cast “against” the amendment, with abstentions and “broker non-votes” not counting as votes “against” the amendment. If the shares you own are held in “street name” by a brokerage firm, your brokerage firm, as the record holder of your shares, is required to vote your shares according to your instructions.
Who will count the votes?
The votes will be counted, tabulated and certified by Island Stock Transfer, our proxy agent.
Will my vote be kept confidential?
Yes, your vote will be kept confidential and we will not disclose your vote, unless we are required to do so by law (including in connection with the pursuit or defense of a legal or administrative action or proceeding). The Inspector of Elections will forward any written comments that you make on the Proxy Card to management without providing your name, unless you expressly request disclosure on your Proxy Card.
How does the Board recommend that I vote on the proposal?
The Board recommends that you vote
FOR
the proposal.
Where can I find the voting results?
Voting results will be updated by Island Stock Transfer and can be reviewed at: www.islandstocktransfer.com. We also plan to file a Current Report on Form 8-K if the action is approved and once announced by FINRA.
How can I obtain an Annual Report on Form 10-K?
Our Annual Report on Form 10-K for the fiscal year ended December 31, 2012 is available on the Securities & Exchange Commission website at:
http://www.sec.gov/Archives/edgar/data/1382112/000144586613000263/gmec10k03262013.htm
Our latest Quarterly Report on Form 10-Q for the second fiscal quarter ended June 30, 2013 is available on the Securities & Exchange Commission website at:
http://www.sec.gov/Archives/edgar/data/1382112/000144586613001000/0001445866-13-001000-index.htm
If you would like a copy of our Annual Report on Form 10-K or any of its exhibits, we will send you one without charge. Please contact:
Great China Mania Holdings, Inc.
Attn: Kwong Kwan Yin Roy, Chief Financial Officer
Room 1902, 19/F., Kodak House II
321 Java Road, Hong Kong
Whom should I contact if I have any questions?
Great China Mania Holdings, Inc. can be reached by viewing our corporate website at
http://greatchinamania.com/
or
Great China Mania Holdings, Inc.
Room 1902, 19/F., Kodak House II
321 Java Road, Hong Kong
Phone:
(852) 2882-7026
DELIVERY OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS
We will only deliver one set of materials to multiple stockholders sharing an address, unless we have received contrary instructions from one or more of the stockholders. Also, we will promptly deliver a separate copy of these materials and future stockholder communication documents to any stockholder at a shared address to which a single copy of these materials were delivered, or deliver a single copy of these materials and future stockholder communication documents to any stockholder or stockholders sharing an address to which multiple copies are now delivered, upon written request to us at our address noted above. Stockholders may also address future requests regarding delivery of proxy materials and/or annual reports by contacting us at the address noted above.
PROPOSAL NO. 1
APPROVAL OF AUTHORIZATION BY THE BOARD OF DIRECTORS TO EFFECT A ONE-FOR-TWENTY REVERSE SPLIT OF THE COMPANY’S COMMON STOCK
We are seeking shareholder approval to grant the Board authority to authorize and effect a reverse stock split of the issued and outstanding shares of our Common Stock, par value $0.01 per share, in the ratio of one-for-twenty, such split to combine every twenty shares issued and outstanding as of October 1, 2013 into one share of Common Stock (the “Reverse Split Proposal”).
The amendments will not change the number of authorized shares of Common Stock, Preferred Stock, or the relative voting power of our shareholders. Because the number of authorized shares will not be reduced, the number of authorized but unissued shares of our Common Stock will materially increase and will be available for reissuance by the Company. The reverse stock split, if effected, would affect all of our holders of Common Stock uniformly.
The Board unanimously approved, and recommended seeking shareholder approval of this Reverse Split Proposal, on October 2, 2013.
The Board's decision to effect the reverse stock split was based on a number of factors, including prevailing market conditions, existing and expected trading prices for our Common Stock, actual or forecasted results of operations, and the likely effect of such results on the market price of our Common Stock.
Following a reverse stock split, the number of our outstanding shares of Common Stock will be significantly reduced, from 100,434,308 to 5,021,716.
The reverse stock split is not being proposed in response to any effort of which we are aware to accumulate our shares of Common Stock or obtain control of the Company, nor is it a plan by management to recommend a series of similar actions to our Board or our shareholders.
There are certain risks associated with a reverse stock split, and we cannot accurately predict or assure the reverse stock split will produce or maintain the desired results (for more information on the risks see the section below entitled “Certain Risks Associated with a Reverse Stock Split”). However, our Board believes that the benefits to the Company and our shareholders outweigh the risks and recommends that you vote in favor of granting the Board the authority to effect a reverse stock split.
Reasons for the Reverse Stock Split
The primary purpose for effecting the reverse stock split, would be to increase the per share price of our Common Stock. The Board of Directors believes that, should the appropriate circumstances arise, effecting the reverse stock split would, among other things, help us to:
|
|
|
|
•
|
Appeal to a broader range of investors to generate greater investor interest in the Company; and
|
|
|
|
|
•
|
Improve the perception of our Common Stock as an investment security.
|
Improve the Perception of Our Common Stock as an Investment Security -
Our Board of Directors unanimously approved the proposal to effect a reverse stock split as one potential means of increasing the share price of our Common Stock to improve the perception of our Common Stock as a viable investment security. Lower-priced stocks have a perception in the investment community as being risky and speculative, which may negatively impact not only the price of our Common Stock, but also our market liquidity. We believe that we may be particularly sensitive to this type of negative public perception and, if this Reverse Split Proposal is approved, the reverse split would increase our per share price if it determines that it is undermining our current or future prospects.
Appeal to a Broader Range of Investors to Generate Greater Investor Interest in the Company -
An increase in our stock price may make our Common Stock more attractive to investors. Brokerage firms may be reluctant to recommend lower-priced securities to their clients. Many institutional investors have policies prohibiting them from holding lower-priced stocks in their portfolios, which reduces the number of potential purchasers of our Common Stock. Investment funds may also be reluctant to invest in lower-priced stocks. Investors may also be dissuaded from purchasing lower-priced stocks because the brokerage commissions, as a percentage of the total transaction, tend to be higher for such stocks. Moreover, the analysts at many brokerage firms do not monitor the trading activity or otherwise provide coverage of lower-priced stocks.
Certain Risks Associated with a Reverse Stock Split
Even if a reverse stock split is effected, some or all of the expected benefits discussed above may not be realized or maintained. The market price of our Common Stock will continue to be based, in part, on our performance and other factors unrelated to the number of shares outstanding.
The reverse stock split will reduce the number of outstanding shares of our Common Stock without reducing the number of shares of available but unissued Common Stock, which will also have the effect of increasing the number of authorized but unissued shares. The issuance of additional shares of our Common Stock may have a dilutive effect on the ownership of existing shareholders.
The current economic environment in which we operate, and other risks, along with otherwise volatile equity market conditions, could limit our ability to raise new equity capital in the future.
Principal Effects of a Reverse Stock Split
If our shareholders approve this Reverse Split Proposal, our issued and outstanding shares of Common Stock would decrease at a rate of approximately one share of Common Stock for every twenty (20) shares of Common Stock currently outstanding. The reverse stock split would be effected simultaneously for all of our Common Stock, and the exchange ratio would be the same for all shares of Common Stock. The reverse stock split would affect all of our shareholders uniformly and would not affect any shareholder's percentage ownership interests in the Company, except to the extent that it results in a shareholder receiving one additional sharein lieu of fractional shares. The reverse stock split would not affect the relative voting or other rights that accompany the shares of our Common Stock, except to the extent that it results in a shareholder receiving one additional share in lieu of fractional shares. Common Stock issued pursuant to the reverse stock split would remain fully paid and non-assessable. The reverse stock split would not affect our securities law reporting and disclosure obligations, and we would continue to be subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have no current plans to take the Company private. Accordingly, a reverse stock split is not related to a strategy to do so.
In addition to the change in the number of shares of Common Stock outstanding, a reverse stock split would have the following effects:
Increase the Per Share Price of our Common Stock
- By effectively condensing a number of pre-split shares into one share of Common Stock, the per share price of a post-split share is generally greater than the per share price of a pre-split share. The amount of the initial increase in per share price and the duration of such increase, however, is uncertain.
Increase in the Number of Shares of Common Stock Available for Future Issuance
- By reducing the number of shares outstanding without reducing the number of shares of available but unissued Common Stock, a reverse stock split will increase the number of authorized but unissued shares. The Board believes the increase is appropriate for use to fund future operations of the Company. Although the Company does not have any pending acquisitions for which shares are expected to be used, the Company may also use authorized shares in connection with the financing of future acquisitions.
Although a reverse stock split would not have any dilutive effect on our shareholders, a reverse stock split without a reduction in the number of shares authorized for issuance would reduce the proportion of shares owned by our shareholders relative to the number of shares authorized for issuance, giving our Board an effective increase in the authorized shares available for issuance, in its discretion. Our Board from time to time may deem it to be in the best interests of the Company and our shareholders to enter into transactions and other ventures that may include the issuance of shares of our Common Stock. If our Board authorizes the issuance of additional shares subsequent to the reverse stock split described above, the dilution to the ownership interest of our existing shareholders may be greater than would occur had the reverse stock split not been effected. Many stock issuances not involving equity compensation do not require shareholder approval, and our Board generally seeks approval of our shareholders in connection with a proposed issuance only if required at that time.
Authorized Shares of Common Stock
The Reverse Stock Split Proposal will not change the number of authorized shares of Common Stock but will increase the number of authorized shares available for future issuance for corporate needs such as equity financing, retirement of outstanding indebtedness, stock splits and stock dividends, employee benefit plans, or other corporate purposes as may be deemed by the Board to be in the best interests of the Company and its shareholders. The Board believes the increase in available shares for future issuance is appropriate to fund the future operations of the Company. It will also provide the Company with greater flexibility to respond quickly to advantageous business opportunities However, we may from time to time explore opportunities to make acquisitions through the use of stock. As a result, the Company's current number of authorized shares of Common Stock may enable the Company to better meet its future business needs.
We believe that the current amount of authorized Common Stock will make a sufficient number of shares available, should the Company decide to use its shares for one or more of such previously mentioned purposes or otherwise. The current capital will provide the Board with the ability to issue additional shares of stock without further vote of the shareholders of the Company, except as provided under Florida corporate law or under the rules of any national securities exchange on which shares of stock of the Company are then listed.
Procedure for Effecting Reverse Stock Split and Exchange of Stock Certificates
If the Reverse Split Proposal is approved by our shareholders, our Board will then implement the reverse stock split.
For example, if a shareholder presently holds 100 shares of our Common Stock, he or she would hold 5 shares of Common Stock following this one-for-twenty reverse stock split. Fractional shares will be handled as described below under “Fractional Shares.” Beginning on the effective date of the split, each certificate representing pre-split shares would be deemed for all corporate purposes to evidence ownership of post-split shares.
As soon as practicable after the effective date of the reverse stock split, shareholders would be notified that the reverse stock split had been effected.
Effect on Beneficial Holders (i.e., Shareholders Who Hold in “Street Name”)
Upon the reverse stock split, we intend to treat Common Stock held by shareholders in “street name,” through a bank, broker or other nominee, in the same manner as shareholders whose shares are registered in their own names. Banks, brokers or other nominees will be instructed to effect the reverse stock split for their customers holding Common Stock in “street name.” However, these banks, brokers or other nominees may have different procedures than registered shareholders for processing the reverse stock split. If you hold shares of Common Stock with a bank, broker or other nominee and have any questions in this regard, you are encouraged to contact your bank, broker or other nominee.
Effect on Registered “Book-Entry” Holders (i.e., Shareholders That are Registered on the Transfer Agent's Books and Records but do not Hold Certificates)
Some of our registered holders of Common Stock may hold some or all of their shares electronically in book-entry form with our transfer agent, Island Stock Transfer. These shareholders do not have stock certificates evidencing their ownership of Common Stock. They are, however, provided with a statement reflecting the number of shares registered in their accounts. If a shareholder holds registered shares in book-entry form with our transfer agent, no action needs to be taken to receive post-reverse stock split shares or fractional shares, if applicable. If a shareholder is entitled to post-reverse stock split shares, a transaction statement will automatically be sent to the shareholder's address of record indicating the number of shares (including fractional shares) of Common Stock held following the reverse stock split.
Effect on Certificated Shares
Upon the reverse stock split our transfer agent will act as our exchange agent and assist holders of Common Stock in implementing the exchange of their certificates.
Commencing on the effective date of a reverse stock split, shareholders holding shares in certificated form will be sent a transmittal letter by our transfer agent. The letter of transmittal will contain instructions on how a shareholder should surrender his or her certificates representing Common Stock (“Old Certificates”) to the transfer agent in exchange for certificates representing the appropriate number of whole post-reverse stock split Common Stock, as applicable (“New Certificates”). No New Certificates will be issued to a shareholder until that shareholder has surrendered all Old Certificates, together with a properly completed and executed letter of transmittal, to the transfer agent. No shareholder will be required to pay a transfer or other fee to exchange Old Certificates. The letter of transmittal will contain instructions on how you may obtain New Certificates if your Old Certificates have been lost. If you have lost your certificates, you will have to pay any surety premium and the service fee required by our transfer agent.
Until surrendered, we will deem outstanding Old Certificates held by shareholders to be canceled and only to represent the number of whole shares to which these shareholders are entitled.
Any Old Certificates submitted for exchange, whether because of a sale, transfer or other disposition of shares, will automatically be exchanged for New Certificates.
Shareholders should not destroy any stock certificates and should not submit any certificates until requested to do so by the transfer agent. Shortly after the reverse stock split the transfer agent will provide registered shareholders with instructions and a letter of transmittal for converting Old Certificates into New Certificates. Shareholders are encouraged to promptly surrender Old Certificates to the transfer agent (acting as exchange agent in connection with the reverse stock split) in order to avoid having shares become subject to escheat laws.
Fractional Shares
No fractional shares will be issued in connection with the reverse stock split. Stockholders of record who otherwise would be entitled to receive fractional shares will be entitled to rounding up of their fractional share to the nearest whole share
Accounting Matters
The par value of our Common Stock would remain unchanged at $0.01 per share, if a reverse stock split is effected. The Company's shareholders' equity in its consolidated balance sheet would not change in total. However, the Company's stated capital (i.e., $0.01 par value times the number of shares issued and outstanding), would be proportionately reduced based on the reduction in shares of Common Stock outstanding. Additional paid in capital would be increased by an equal amount, which would result in no overall change to the balance of shareholders' equity.
Additionally, net income or loss per share for all periods would increase proportionately as a result of a reverse stock split since there would be a lower number of shares outstanding. We do not anticipate that any other material accounting consequences would arise as a result of a reverse stock split.
Potential Anti-Takeover Effect
Even though a potential reverse stock split would result in an increased proportion of unissued authorized shares to issued shares, which could, under certain circumstances, have an anti-takeover effect (for example, by permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the composition of the Board or contemplating a tender offer or other transaction for the combination of us with another company), the Reverse Split Proposal is not being proposed in response to any effort of which we are aware to accumulate shares of our Common Stock or obtain control of us, nor is it part of a plan by management to recommend a series of similar amendments to our Board and our shareholders.
No Appraisal Rights
Our shareholders are not entitled to appraisal rights with respect to a reverse stock split, and we will not independently provide shareholders with any such right.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE AUTHORIZATION TO EFFECT A ONE-FOR-TWENTY REVERSE SPLIT OF THE COMMON STOCK OF THE COMPANY.
DELIVERY OF VOTING MATERIALS
To reduce the expenses of delivering duplicate voting materials to our stockholders who may have more than one
Great China Mania Holdings, Inc.
stock account, we are taking advantage of “house-holding” rules that permit us to deliver only one set of the Proxy Statement to stockholders who share an address unless otherwise requested. If you hold your shares through a broker, you may have consented to reducing the number of copies of materials delivered to your address. If you wish to revoke a consent previously provided to your broker, you must contact the broker to do so. In any event, if you share an address with another stockholder and have received only one set of voting materials, you may write or call us to request a separate copy of these materials at no cost to you. For future proxy solicitations, you may request separate voting materials, or request that we send only one set of voting materials to you if you are receiving multiple copies.
|
|
By Order of the Board of Directors,
|
|
|
|
|
|
|
|
October 14, 2013
|
By:
|
/s/ Kwong Kwan Yin Roy
|
|
|
Hong Kong
|
|
Kwong Kwan Yin Roy
|
|
|
|
|
Chief Executive Officer
|
|
GREAT CHINA MANIA HOLDINGS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
CONTROL ID:
REQUEST ID:
The undersigned appoints Kwong Kwan Yin Roy as proxy, each with the power of substitution, and authorizes each of them to represent and to vote, as designated on the reverse hereof, all of the shares of common stock of Great China Mania Holdings, Inc. held of record by the undersigned at the close of business on October 7, 2013.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
|
|
|
|
|
VOTING INSTRUCTIONS
|
|
If you vote by fax, please DO NOT mail your proxy card.
|
|
|
MAIL –
Date, sign and mail your proxy card in the
envelope provided as soon as possible.
-or-
TELEPHONE-
Call toll-free
1-877-502-0550
from any touch-tone telephone and follow the
instructions. Have your proxy card available
when you call.
-or-
INTERNET-
Access
www.islandstocktransfer.com
, click on
Vote Your Proxy
and follow the on-screen instructions to enter your Control Number. Have your proxy card available when you access the web page.
|
PROXY VOTE FOR GREAT CHINA MANIA HOLDINGS, INC.
|
PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
|
|
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
|
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK
|
|
|
|
|
|
|
|
|
|
|
Proposal 1
|
|
|
|
FOR
|
AGAINST
|
ABSTAIN
|
|
|
|
TO EFFECT A REVERSE STOCK SPLIT OF OUR COMMON STOCK IN THE RATION OF ONE-FOR-TWENTY.
|
o
|
o
|
o
|
|
|
|
|
|
|
|
MARK “X” HERE FOR ADDRESS CHANGE:
|
|
This Proxy will be voted as directed or, if no contrary direction is indicated, will be voted FOR the approval to effect a one-for-twenty reverse stock split of our common stock.
|
IMPORTANT:
Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Print Name of Stockholder and/or Joint Tenant)
|
|
|
|
|
|
|
(Signature of Stockholder)
|
|
|
|
|
|
|
(Second Signature if held jointly)
|
|
|
|
|
|
|
(Date)
|