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 |
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| ☐ |
Confidential,
for Use of the Commission Only (as permitted by Rule 14c-5(d)(2)) |
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| ☒ |
Definitive
Information Statement |
CIMG
INC.
(Name
of Registrant As Specified In Its Charter)
| Payment
of Filing Fee (Check the appropriate box): |
| |
| ☒ |
No
fee required |
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| ☐ |
Fee
paid previously with preliminary materials. |
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| ☐ |
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 |
CIMG
INC.
Room
R2, FTY D, 16/F, Kin Ga Industrial Building,
9
San On Street, Tuen Mun, Hong Kong
+
852 70106695
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 CIMG Inc.:
This
Notice and the accompanying Information Statement are being furnished to the stockholders of CIMG 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
implementation of a reverse stock split at a ratio between 1-for-10 and 1-for-30, to be effected at the Board’s discretion;
and |
| |
|
| (ii) |
the
adoption of the CIMG Inc. 2025 Equity Incentive Plan. |
This
Information Statement is being furnished to our stockholders of record as of July 3, 2025 (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 the Board, |
|
| |
|
| /s/
Jianshuang Wang |
|
| Jianshuang
Wang |
|
Chief
Executive Officer and Director
July
25, 2025
CIMG
INC.
Room
R2, FTY D, 16/F, Kin Ga Industrial Building,
9
San On Street, Tuen Mun, Hong Kong
+
852 70106695
INFORMATION
STATEMENT
(dated July 25, 2025)
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 CIMG 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 July 3, 2025. Copies of this Information
Statement are first being sent on or about July 29, 2025, to the holders of record as of July 3, 2025, of the outstanding shares
of the Company’s common stock.
General
Information
Unless
otherwise noted, references to the “Company,” “we,” “us,” or “our” mean CIMG Inc., a
Nevada corporation. Our principal executive offices are located at Room R2, FTY D, 16/F, Kin Ga Industrial Building, 9 San On Street,
Tuen Mun, Hong Kong, telephone + 852 70106695.
By
written consent dated July 3, 2025, 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, DADA Business Trading Co.,
Limited, METAVERSE INTELLIGENCE TECH LTD, YY Tech Inc., and VMADE CO., LIMITED, 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
implementation of a reverse stock split at a ratio between 1-for-10 and 1-for-30, to be effected at the Board’s discretion;
and |
| |
|
| (ii) |
the
adoption of the CIMG Inc. 2025 Equity Incentive Plan. |
Nasdaq
Requirements
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.
As a result of
the foregoing resolution, 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 this resolution constitute stockholder approval for the Company to adopt the
CIMG Inc. 2025 Equity Incentive Plan and issue shares thereunder.
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 July 3,
2025. The record date for determining those stockholders of the Company entitled to receive this Information Statement is the close of
business on July 3, 2025. As of July 3, 2025, the Company had 36,397,418 shares of voting stock outstanding, with all 36,397,418
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 July 3, 2025, totaling in the aggregate 50.23% 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, FOR PURPOSES OF REGAINING COMPLIANCE WITH THE NASDAQ CAPITAL MARKET’S MINIMUM BID PRICE REQUIREMENT SET FORTH IN NASDAQ
LISTING RULE 5550(A)(2), THE IMPLEMENTATION OF A REVERSE STOCK SPLIT AT A RATIO BETWEEN 1-FOR-10 AND 1-FOR-30, TO BE EFFECTED AT THE
BOARD’S DISCRETION.
On
June 30, 2025, our Board, and on July 3, 2025, the Majority Shareholders authorized and approved, for purposes of regaining compliance
with the Nasdaq Capital Market’s minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2), the implementation
of a reverse stock split at a ratio between 1-for-10 and 1-for-30, to be effected at the Board’s discretion.
Background
On
January 14, 2025, the Company received a notification letter (the “Minimum Bid Price Notice”) from the Listing Qualifications
Department of The Nasdaq Stock Market LLC (“NASDAQ”) indicating that the Company is not in compliance with the minimum bid
price requirement for continued listing set forth in Nasdaq Listing Rule 5550(a)(2). Nasdaq Listing Rule 5550(a)(2) requires listed securities
to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum
bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. The Minimum Bid Price Notice has
no immediate effect on the listing of the Company’s common stock, par value $0.00001 per share (the “Common Stock”),
which continues to trade on The Nasdaq Capital Market under the symbol “IMG.”
In
accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has 180 calendar days from the date of the Minimum Bid Price Notice, or
until July 14, 2025, to regain compliance. If at any time before July 14, 2025 the closing bid price of the Common Stock closes at or
above $1.00 per share for a minimum of 10 consecutive business days, NASDAQ will provide written notification that the Company has achieved
compliance with the minimum bid price requirement, and the matter will be resolved.
If
the Company does not regain compliance during the compliance period ending July 14, 2025, then NASDAQ may in its discretion determine
to grant the Company an additional 180 calendar day period to regain compliance, provided that the Company on July 14, 2025 meets the
continued listing requirement for market value of publicly held shares and all other applicable initial listing standards for The Nasdaq
Capital Market, with the exception of the minimum bid price requirement, and will need to provide NASDAQ written notice of its intent
to cure the deficiency during the second compliance period.
If
the Company does not regain compliance within the allotted compliance period or periods, including any extensions that NASDAQ may determine
to grant, NASDAQ will provide notice that the Common Stock will be subject to delisting. The Company would then be entitled to appeal
that determination to a NASDAQ hearings panel. There can be no assurance that the Company will regain compliance with the minimum bid
price requirement during the 180-day compliance period, secure a second period of 180 days to regain compliance or maintain compliance
with the other NASDAQ listing requirements.
Stockholders should
note that we received a delisting determination letter from Nasdaq on June 27, 2025. The Company intends to appeal Nasdaq’s delist
determination and plans to request a hearing before a Nasdaq Hearings Panel to present its plan for regaining compliance with the applicable
Nasdaq Listing Rules. Stockholders and investors are advised to refer to our current report on Form 8-K filed with the SEC on July 2,
2025 for more details.
Certain
Risks Associated with the Reverse Stock Split
If
the Reverse Stock Split does not result in a proportionate increase in the price of the Common Stock, we may be unable to meet the initial
listing requirements of a principal national securities exchange.
We
expect that the Reverse Stock Split will increase the market price of the Common Stock so that we will be able to meet the minimum bid
price requirement under the listing rules of a principal national securities exchange. However, the effect of the Reverse Stock Split
on the market price of the Common Stock cannot be predicted with certainty, and the results of reverse stock splits by companies under
similar circumstances have varied. It is possible that the market price of the Common Stock following the Reverse Stock Split will not
increase sufficiently for us to meet the minimum bid price requirement. If we are unable meet the minimum bid price requirement, we may
not be unable to list our common stock on a principal national securities exchange.
Even
if the Reverse Stock Split results in the requisite increase in the market price of the Common Stock, there is no assurance that we will
be able to continue to comply with the minimum bid price requirement.
Even
if the Reverse Stock Split results in the requisite increase in the market price of the Common Stock to be in compliance with the minimum
bid price requirements of a principal national securities exchange, there can be no assurance that the market price of the Common Stock
following the Reverse Stock Split will remain at the level required for continued compliance with such requirement. It is not uncommon
for the market price of a company’s common stock to decline in the period following a reverse stock split. If the market price
of our common stock declines following the implementation of the Reverse Stock Split, the percentage decline may be greater than would
occur in the absence of the Reverse Stock Split. In any event, other factors unrelated to the number of shares of the Common Stock outstanding,
such as negative financial or operational results, could adversely affect the market price of the Common Stock and jeopardize our ability
to meet or continue to comply with the minimum bid price requirement.
The
Reverse Stock Split may decrease the liquidity of the Common Stock.
The
liquidity of the Common Stock may be adversely affected by the Reverse Stock Split given the reduced number of shares that will be outstanding
following the Reverse Stock Split, especially if the market price of the Common Stock does not sufficiently increase as a result of the
Reverse Stock Split. In addition, the Reverse Stock Split may increase the number of stockholders who own odd lots (less than 100 shares)
of the Common Stock, creating the potential for such stockholders to experience an increase in the cost of selling their shares and greater
difficulty effecting such sales.
The
increased market price of the Common Stock resulting from the Reverse Stock Split may not attract new investors, including institutional
investors, and may not satisfy the investing guidelines of those investors, and consequently, the liquidity of the Common Stock may not
improve.
Although
we believe that a higher market price may help generate greater or broader investor interest in the Common Stock, there can be no assurance
that the Reverse Stock Split will result in a per-share price increase sufficient to attract new investors, including institutional investors.
Additionally, there can be no assurance that the market price of the Common Stock will satisfy the investing guidelines of those investors.
As a result, the trading liquidity of the Common Stock may not necessarily improve following the Reverse Stock Split.
Disadvantages
of a Reverse Stock Split
Reduced
Market Capitalization. While we expect that the reduction in the outstanding shares of the Common Stock will increase the market
price of such shares, we cannot assure you that the Reverse Stock Split will increase the market price of the Common Stock by a multiple
corresponding to the final ratio of the Reverse Stock Split, or result in any permanent increase in the market price, which can be dependent
upon many factors, including our financing activities, business, financial performance and prospects. Should the market price decline
after the Reverse Stock Split, the percentage decline may be greater, due to the smaller number of shares outstanding, than it would
have been prior to the Reverse Stock Split. In some cases the stock price of companies that have effected reverse stock splits has subsequently
declined back to pre-reverse split levels. Accordingly, we cannot assure you that the market price of the Common Stock immediately after
the effective date of the Reverse Stock Split will be maintained for any period of time or that the ratio of post- and pre-split shares
will remain the same after the Reverse Stock Split is effected, or that the Reverse Stock Split will not have an adverse effect on our
stock price due to the reduced number of shares outstanding after the Reverse Stock Split. A Reverse Stock Split is often viewed negatively
by the market and, consequently, can lead to a decrease in our overall market capitalization. If the per share price does not increase
proportionately as a result of the Reverse Stock Split, then our overall market capitalization will be reduced.
Increased
Transaction Costs. The number of shares held by each individual stockholder will be reduced if the Reverse Stock Split is implemented.
This will increase the number of stockholders who hold less than a “round lot,” or 100 shares. Typically, the transaction
costs to stockholders selling “odd lots” are higher on a per share basis. Consequently, the Reverse Stock Split could increase
the transaction costs to existing stockholders in the event they wish to sell all or a portion of their position.
Liquidity.
Although the Board believes that the decrease in the number of shares of Common Stock outstanding as a consequence of the Reverse Stock
Split and the anticipated increase in the price of our Common Stock could encourage interest in our Common Stock and possibly promote
greater liquidity for our stockholders, such liquidity could also be adversely affected by the reduced number of shares outstanding after
the Reverse Stock Split.
Effects
of the Reverse Stock Split
As
of July 3, 2025, we had 36,397,418 shares of our Common Stock issued and outstanding. Depending on the ratio for the Reverse Stock Split
determined by our Board, a minimum of ten (10) and a maximum of thirty (30) shares of existing Common Stock will be combined
into one new share of Common Stock. The table below shows, as of July 3, 2025 the number of outstanding shares of Common Stock that would
result from the listed hypothetical Reverse Stock Split ratios (without giving effect to the treatment of fractional shares):
| Reverse
Stock Split Ratio | |
Approximate
Number of
Outstanding
Shares of
Common
Stock Following the
Reverse
Stock Split | |
| | |
| |
| 1-for-10 | |
| 3,639,742 | |
| 1-for-30 | |
| 1,213,248 | |
The
actual number of shares issued after giving effect to the Reverse Stock Split, if implemented, will depend on the Reverse Stock Split
ratio that is ultimately determined by our Board and by the number of issued and outstanding shares at the time of the Board decision.
The
Reverse Stock Split will affect all holders of our Common Stock uniformly and will not affect any Stockholder’s percentage ownership
interest in our company, except that as described below in “Fractional Shares,” record holders of Common Stock otherwise
entitled to a fractional share as a result of the Reverse Stock Split will be rounded up to the next whole number. In addition, the Reverse
Stock Split will not affect any stockholder’s proportionate voting power (subject to the treatment of fractional shares).
The
implementation of the Reverse Stock Split will result in an increased number of available authorized shares of Common Stock. The resulting
increase in such availability in the authorized number of shares of Common Stock could have a number of effects on our stockholders depending
upon the exact nature and circumstances of any actual issuances of authorized but unissued shares. The increase in available authorized
shares for issuance could have an anti-takeover effect, in that additional shares could be issued (within the limits imposed by applicable
law) in one or more transactions that could make a change in control or takeover of our company more difficult. For example, additional
shares could be issued by us so as to dilute the stock ownership or voting rights of persons seeking to obtain control of our company,
even if the persons seeking to obtain control of our company offer an above-market premium that is favored by a majority of the independent
stockholders. Similarly, the issuance of additional shares to certain persons allied with our management could have the effect of making
it more difficult to remove our current management by diluting the stock ownership or voting rights of persons seeking to cause such
removal. We do not have any other provisions in our Articles of Incorporation, Bylaws, employment agreements, credit agreements or any
other documents that have material anti-takeover consequences. Additionally, we have no plans or proposals to adopt other provisions
or enter into other arrangements that may have material anti-takeover consequences. The Board is not aware of any attempt, or contemplated
attempt, to acquire control of our company, and this proposal is not being presented with the intent that it be utilized as a type of
anti-takeover device.
Additionally,
because holders of Common Stock have no preemptive rights to purchase or subscribe for any of our unissued stock, the issuance of additional
shares of authorized Common Stock that will become newly available as a result of the implementation of the Reverse Stock Split will
reduce the current stockholders’ percentage ownership interest in the total outstanding shares of Common Stock.
We
may issue the additional shares of authorized Common Stock that will become available as a result of the Reverse Stock Split without
the additional approval of its Stockholders.
The
Reverse Stock Split may result in some stockholders owning “odd lots” of less than 100 shares of Common Stock. Odd lot shares
may be more difficult to sell, and brokerage commissions and other costs of transactions in odd lots are generally somewhat higher than
the costs of transactions in “round lots” of even multiples of 100 shares.
After
the effectiveness of the Reverse Stock Split, our Common Stock will have a new Committee on Uniform Securities Identification Procedures
(CUSIP) number, which is a number used to identify our equity securities, and stock certificates with the older CUSIP numbers will need
to be exchanged for stock certificates with the new CUSIP number by following the procedures described below. After the Reverse Stock
Split, we will continue to be subject to the periodic reporting and other requirements of the Exchange Act. Our Common Stock will continue
to be listed on the Nasdaq Capital Market under the symbol “IMG.” Stockholders should note that we received a delisting
determination letter from Nasdaq on June 27, 2025. The Company intends to appeal Nasdaq’s delist determination and plans to request
a hearing before a Nasdaq Hearings Panel to present its plan for regaining compliance with the applicable Nasdaq Listing Rules. Stockholders
and investors are advised to refer to our current report on Form 8-K filed with the SEC on July 2, 2025 for more details.
Effect
of the Reverse Stock Split on Employee Plans, Options, Restricted Stock Awards and Units, Warrants, and Convertible or Exchangeable Securities
Based
upon the Reverse Stock Split ratio determined by the Board, proportionate adjustments are generally required to be made to the per share
exercise price and the number of shares issuable upon the exercise or conversion of all outstanding options, warrants, convertible or
exchangeable securities entitling the holders to purchase, exchange for, or convert into, shares of Common Stock. This would result in
approximately the same aggregate price being required to be paid under such options, warrants, convertible or exchangeable securities
upon exercise, and approximately the same value of shares of Common Stock being delivered upon such exercise, exchange or conversion,
immediately following the Reverse Stock Split as was the case immediately preceding the Reverse Stock Split. The number of shares deliverable
upon settlement or vesting of restricted stock awards will be similarly adjusted, subject to our treatment of fractional shares. The
number of shares reserved for issuance pursuant to these securities will be proportionately based upon the Reverse Stock Split ratio
determined by the Board, subject to our treatment of fractional shares.
For
example, upon the effectiveness of the Reverse Stock Split at a ratio of 1-for-10, a warrant holder that previously held a warrant to
purchase 100,000 shares of common stock at an exercise price of $0.10 per share, would hold a warrant to purchase 10,000 shares at an
exercise price of $1 per share. Similarly, a convertible noteholder that previously held a convertible note that is convertible into
100,000 shares of common stock at a conversion price of $0.10 per share, would hold a note that is convertible into 10,000 shares
at a conversion price of $1.00 per share.
Procedure
for Implementing the Reverse Stock Split
The
Reverse Stock Split would become effective upon the filing of the Certificate of Change with the Secretary of State of the State of Nevada.
The
exact timing of the filing of the Certificate of Change to effect the Reverse Stock Split will be determined by
our Board based on its evaluation as to when such action will be the most advantageous to us and our stockholders. In addition, our Board
reserves the right, notwithstanding stockholder approval and without further action by the stockholders, to elect not to proceed with
the Reverse Stock Split if, at any time prior to filing the Certificate of Change, our Board, in its sole discretion, determines that
it is no longer in our best interest and the best interests of our stockholders to proceed with the Reverse Stock Split. If the Certificate
of Change effecting the Reverse Stock Split has not been filed with the Secretary of State of the State of Nevada by the close of business
on the day that is 12 months from the date of the Action, our Board will abandon the Reverse Stock Split.
Beneficial
Holders of Common Stock (i.e. Stockholders who hold in street name)
Upon
the implementation of the Reverse Stock Split, we intend to treat shares held by stockholders through a bank, broker, custodian or other
nominee in the same manner as registered stockholders whose shares are registered in their names. Banks, brokers, custodians or other
nominees will be instructed to effect the Reverse Stock Split for their beneficial holders holding our Common Stock in street name. However,
these banks, brokers, custodians or other nominees may have different procedures than registered stockholders for processing the Reverse
Stock Split. Stockholders who hold shares of our Common Stock with a bank, broker, custodian or other nominee and who have any questions
in this regard are encouraged to contact their banks, brokers, custodians or other nominees
Registered
“Book-Entry” Holders of Common Stock (i.e. Stockholders that are registered on the transfer agent’s books and records
but do not hold stock certificates)
Certain
of our registered holders of Common Stock may hold some or all of their shares electronically in book-entry form with the transfer agent.
These stockholders do not have stock certificates evidencing their ownership of the Common Stock. They are, however, provided with a
statement reflecting the number of shares registered in their accounts. Stockholders who hold shares electronically in book-entry form
with the transfer agent will not need to take action (the exchange will be automatic) to receive whole shares of post-Reverse Stock Split
Common Stock, subject to adjustment for treatment of fractional shares.
Holders
of Certificated Shares of Common Stock
Until
surrendered, we will deem outstanding certificates representing shares of our Common Stock (the “Old Certificates”)
held by stockholders to be cancelled and only to represent the number of whole shares of post-Reverse Stock Split Common Stock to which
these stockholders are entitled, subject to the treatment of fractional shares. Any Old Certificates submitted for exchange, whether
because of a sale, transfer or other disposition of stock, will automatically be exchanged for certificates representing the appropriate
number of whole shares of post-Reverse Stock Split Common Stock (the “New Certificates”). If an Old Certificate has
a restrictive legend on the back of the Old Certificate(s), the New Certificate will be issued with the same restrictive legends that
are on the back of the Old Certificate(s).
STOCKHOLDERS
SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY STOCK CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
Fractional
Shares
We
do not currently intend to issue fractional shares in connection with the Reverse Stock Split. Therefore, we will not issue certificates
representing fractional shares. In lieu of issuing fractions of shares, we will round up to the next whole number.
Accounting
Matters
The
proposed Certificate of Change will not affect the par value of our Common Stock per share, which will remain $0.00001 par value per
share. As a result, as of the effectiveness of the Reverse Stock Split, the stated capital attributable to Common Stock and the additional
paid-in capital account on our balance sheet will not change due to the Reverse Stock Split. Reported per share net income or loss will
be higher because there will be fewer shares of Common Stock outstanding.
No
Appraisal Rights
Under
Nevada law and our charter documents, holders of our Common Stock will not be entitled to dissenter’s rights or appraisal rights
with respect to the Reverse Stock Split.
Interests
of Directors and Executive Officers
Our
directors and executive officers have no substantial interests, directly or indirectly, in the Reverse Stock Split except to the extent
of their ownership of shares of our common stock and/or preferred stock.
Reservation
of Right to Abandon Reverse Stock Split
We
reserve the right to abandon the Reverse Stock Split without further action by our stockholders at any time before the effectiveness
of the filing with the Secretary of the State of Nevada of the Certificate of Change, even though the authority to effect the Reverse
Stock Split has been approved by our stockholders. The Board is also expressly authorized to delay, not to proceed with, and abandon,
the Reverse Stock Split if it should so decide, in its sole discretion, that such action is in the best interests of our stockholders.
II.
APPROVAL OF, FOR PURPOSES OF ATTRACTING, RETAINING, AND MOTIVATING EMPLOYEES, DIRECTORS, AND CONSULTANTS, THE ADOPTION OF CIMG INC. 2025
EQUITY INCENTIVE PLAN.
On
June 30, 2025 and July 3, 2025, our Board and the Majority Shareholders authorized and approved the adoption of the Company’s 2025
Equity Incentive Plan (the “2025 Equity Incentive Plan”), under which an aggregate of 7,279,400 of our shares of common
stock or options to purchase shares of common stock may be newly issued, and such number of shares of common stock shall be and
is hereby reserved for such purpose. The 2025 Equity Incentive Plan is appended to this information statement as Appendix A.
Administration.
Authority
to administer and manage the 2025 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 2025
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 2025 Equity Incentive Plan.
Eligibility.
The
persons eligible for participation in the 2025 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 7,279,400 new shares of the Company’s common stock, par value $0.00001 per share shall be subject to the 2025
Equity Incentive Plan. The shares of common stock subject to the 2025 Equity Incentive Plan shall consist of unissued shares, treasury
shares or previously issued shares held by any subsidiary of the Company, and such number of shares of common stock shall be and is hereby
reserved for such purpose.
Options.
The
purchase price of each share of common stock purchasable under an incentive option shall be determined by the Administrator at the time
of grant, but shall not be less than 100% of the Fair Market Value of such share of common stock on the date the option is granted.
The
term of each option shall be fixed by the Administrator, but no incentive option shall be exercisable more than ten years after the date
such option is granted and in the case of an incentive option granted to an optionee who, at the time such incentive option is granted,
owns (within the meaning of Section 424(d) of the code) more than 10% of the total combined voting power of all classes of stock of the
Company or of any subsidiary, no such incentive option shall be exercisable more than five years after the date such incentive option
is granted
Change
of Control.
Upon
the occurrence of a change in control, the Administrator may accelerate the vesting of outstanding restricted stock, in whole or in part,
as determined by the Administrator, in its sole discretion.
EXECUTIVE
COMPENSATION
Executive
Officers Compensation for the fiscal years ended September 30, 2024 and 2023
| Name | |
Position | |
Fiscal Year ended September 30 | |
Fees Earned or Paid in Cash ($) | | |
Stock Awards
($) | | |
Option Awards
($) | | |
All Other Compensation
($) | | |
Total
($) | |
| Jianshuang Wang | |
Chief Executive Officer | |
2024 | |
$ | 8,000 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 8,000 | |
| | |
| |
2023 | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| Zhanzhan Shi | |
Chief Financial Officer | |
2024 | |
$ | 1,000 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 1,000 | |
| | |
| |
2023 | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| Xiaocheng Hao | |
Chief Operating Officer | |
2024 | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| | |
| |
2023 | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| Randell Weaver | |
Former Chief Financial Officer | |
2024 | |
$ | 245,689 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 245,689 | |
| | |
| |
2023 | |
$ | 27,404 | | |
$ | 48,000 | | |
$ | 31,819 | | |
$ | - | | |
$ | 107,223 | |
| | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| Masa Higashida | |
Former Chief Executive Officer | |
2024 | |
$ | 243,997 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 243,997 | |
| | |
| |
2023 | |
$ | 318,000 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 318,000 | |
| | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| Patrick Shearer | |
Former Chief Financial Officer | |
2024 | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| | |
| |
2023 | |
$ | 66,250 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 66,250 | |
| | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| Shana Bowman, | |
Former Interim Chief Financial Officer | |
2024 | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| | |
| |
2023 | |
$ | 165,446 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 165,446 | |
Director
Compensation Table
CIMG’s
non-employee directors are entitled to receive $60,000 in compensation per year for services rendered to CIMG. The following table presents
the directors’ compensation during the fiscal years ended September 30, 2024 and 2023.
| | |
Fiscal
Year | |
Fees
Earned
or Paid in | | |
Stock | | |
Option | | |
All Other | | |
| |
| | |
ended | |
Cash(1) | | |
Awards | | |
Awards | | |
Compensation | | |
Total | |
| Name | |
30-Sep | |
($) | | |
($) | | |
($) | | |
($) | | |
($) | |
| Yanli Hou | |
2024 | |
$ | 4,000 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 4,000 | |
| | |
2023 | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| Jian Liu | |
2024 | |
$ | 3,000 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 3,000 | |
| | |
2023 | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| Changzheng Ye | |
2024 | |
$ | 5,000 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 5,000 | |
| | |
2023 | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| Zongmei Huang | |
2024 | |
$ | 3,000 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 3,000 | |
| | |
2023 | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| Jinmei Guo Hellstroem | |
2024 | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| | |
2023 | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| Kevin J. Conner | |
2024 | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| | |
2023 | |
$ | 72,000 | | |
$ | 50,000 | | |
$ | - | | |
$ | - | | |
$ | 122,000 | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| Tracy Ging | |
2024 | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
| $ | |
| | |
2023 | |
$ | 56,000 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 56,000 | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| J. Chris Jones | |
2024 | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| | |
2023 | |
$ | 62,000 | | |
$ | 50,000 | | |
$ | - | | |
$ | - | | |
$ | 112,000 | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| Nobuki Kurita | |
2024 | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| | |
2023 | |
$ | 62,000 | | |
$ | 50,000 | | |
$ | - | | |
$ | - | | |
$ | 112,000 | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| David G. Robson | |
2024 | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| | |
2023 | |
$ | 62,000 | | |
$ | 50,000 | | |
$ | - | | |
$ | - | | |
$ | 112,000 | |
| (1) |
Pro-rated
compensation for the fiscal year ended September 30, 2024, served as a director and chairperson of the Board. |
| |
● |
On
June 18, 2024, J. Chris Jones, and on June 19, 2024, David G. Robson, resigned from the Board. |
| |
● |
On
May 2, 2024, Mr. Kurita resigned from the Company’s board of directors. |
| |
● |
On
June 6, 2024, Masateru Higashida and Kevin J. Conner resigned from the Board. |
| |
● |
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. |
| |
● |
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. |
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, 2024:
| | |
| |
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 terminated the 2013 Plan, the 2019 Plan and the 2023 Plan.
The
following table sets forth information concerning the 2024 Plan as of September 30, 2024:
| 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 | |
| — | | |
$ | — | | |
| — | |
| Equity compensation plans not approved by security holders | |
| — | | |
| — | | |
| — | |
| Total | |
| 0 | | |
$ | 0 | | |
| 0 | |
As of the date of this information statement, all shares under the 2024 Equity Incentive Plan have been issued.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following tables set forth, as of July 3, 2025, 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 36,397,418 shares of Common Stock issued
and outstanding on July 3, 2025. 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 “
2022 Reverse Stock Split”). Unless we indicate otherwise, all share and per share information in this information statement reflects
the 2022 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 July 3, 2025. 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 Room R2, FTY D, 16/F, Kin Ga Industrial Building,
9 San On Street, Tuen Mun, Hong Kong.
| Name of Beneficial Owner | |
Shares
of Common
Stock Beneficially
Owned | | |
Percent
of Common
Stock Beneficially
Owned | |
| Jianshuang Wang | |
| — | | |
| — | % |
| Zhanzhan Shi | |
| — | | |
| — | % |
| Xiaocheng Hao | |
| — | | |
| — | % |
| Changzheng Ye | |
| — | | |
| — | % |
| Yanli Hou | |
| — | | |
| — | % |
| Jinmei Guo Hellstroem | |
| — | | |
| — | % |
| Zongmei Huang | |
| — | | |
| — | % |
| All directors, nominees and executive officers
as a group (7 persons) | |
| 0 | | |
| 0 | % |
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 July 2, 2025 based
on 36,397,418 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) | |
| 7,125,872 | | |
| — | | |
| | | |
| | | |
| | | |
| 17.6 | % |
| DYT INFO PTE. LTD.(2) | |
| 9,270,842 | | |
| — | | |
| | | |
| | | |
| | | |
| 22.5 | % |
| YY Tech Inc.(3) | |
| 8,365,419 | | |
| | | |
| | | |
| | | |
| | | |
| 20.3 | % |
| VMADE CO., LIMITED(4) | |
| 7,400,282 | | |
| — | | |
| | | |
| | | |
| | | |
| 18.4 | % |
| DADA Business Trading Co., Limited(5) | |
| 6,739,761 | | |
| — | | |
| | | |
| | | |
| | | |
| 17 | % |
| Xiangrong Dai(6) | |
| 3,000,000 | | |
| — | | |
| | | |
| | | |
| | | |
| 8.24 | % |
| Yanqin Chen(7) | |
| 3,000,000 | | |
| | | |
| | | |
| | | |
| | | |
| 8.24 | % |
| METAVERSE INTELLIGENCE TECH LTD(8) | |
| 8,688,557 | | |
| — | | |
| | | |
| | | |
| | | |
| 21.1 | % |
| (1) |
|
Based on Schedule 13 D filed with the SEC on April 3, 2025, Yumei
Liu, through her 100% ownership of Joyer Investment Limited, beneficially owns 7,125,872 shares of common stock, including (i) 3,074,590
shares of common stock directly held; and (ii) warrants have the right to acquire up to 4,051,282 shares of common stock within 60
days. |
| (2) |
|
Based on Schedule 13 D filed with the SEC on April 3, 2025, Ling
Choi, through her 100% ownership of DYT INFO PTE LTD. beneficially owns 9,270,842 shares of common stock, including (i) 4,399,048
shares of common stock directly held; and (ii) warrants have the right to acquire up to 4,871,794 shares of common stock within 60
days. |
| (3) |
|
Based on Schedule 13 D filed with the SEC on April 3, 2025, Yujie
Liu, through her 100% ownership of YY Tech Inc., beneficially owns 8,365,419 shares of common stock, including (i) 3,609,009 shares
of common stock directly held; and (ii) warrants have the right to acquire up to 4,756,410 shares of common stock within 60 days. |
| (4) |
|
Based on Schedule 13 D filed with the SEC on April 3, 2025, Xiaodong
Liu, through her 100% ownership of Vmade Co., Limited, beneficially owns 7,400,282 shares of common stock, including (i) 3,528,488
shares of common stock directly held; and (ii) warrants have the right to acquire up to 3,871,794 shares of common stock within 60
days. |
| (5) |
|
Based on Schedule 13 D/A filed with the SEC on July 14, 2025, Yubo
Yang 100% owns Dada Business Trading Co., Limited and is the sole director of it, and therefore beneficially owns 6,739,761 shares
of common stock, including (i) 3,406,428 shares of common stock directly held; and (ii) warrants have the right to acquire up to
3,333,333 shares of common stock within 60 days. |
| (6) |
|
Based on Schedule 13 G/A filed with the SEC on June 10, 2025, Xiangrong
Dai beneficially owns 3,000,000 shares of common stock. |
| (7) |
|
Based on Schedule 13 G/A filed with the SEC on June 9, 2025, Yanqin
Chen beneficially owns 3,000,000 shares of common stock. |
| (8) |
|
Based on Schedule 13 D filed with the SEC
on April 3, 2025, Wenwen Yu, through her 100% ownership of Metaverse Intelligence Tech Ltd., beneficially owns 8,688,557 shares of
common stock, including (i) 3,932,147 shares of common stock directly held; and (ii) warrants have the right to acquire up to 4,756,410
shares of common stock within 60 days.
Metaverse Intelligence Tech Ltd. is governed
by its sole director, Ying Yu. As such, Ms. Yu has voting and investment discretion with respect to the shares of common stock held
of record by Metaverse Intelligence Tech Ltd. and may be deemed to have beneficial ownership of the shares and warrants held directly
by Metaverse Intelligence Tech Ltd. Therefore, both Wenwen Yu and Ying Yu are deemed to have shared voting power over the 8,688,557
shares of common stock. |
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 July 3, 2025 based on 36,397,418 shares of common stock outstanding as of such date.
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 Room R2, FTY D, 16/F, Kin Ga Industrial Building, 9 San
On Street, Tuen Mun, Hong Kong, telephone + 852 70106695. 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
July
25, 2025
Appendix
A
CIMG
INC.
2025
SHARE INCENTIVE PLAN
This
2025 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 7,279,400 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 cancelled 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.
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.
(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 [*], 2025 when the Plan was approved by majority vote of the Company’s stockholders on [*], 2025.
| 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.
(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.
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.
