Delaware
|
86-1032927
|
State of Incorporation
|
IRS Employer Identification No.
|
Large accelerated filer | o | Accelerated filer | o | ||
Non-accelerated filer | o | Smaller reporting company | þ |
Page | ||
ITEM 1.
|
BUSINESS
|
3
|
ITEM 1A.
|
RISK FACTORS
|
21
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
36
|
ITEM 2.
|
PROPERTIES
|
37
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
37
|
ITEM 4.
|
N/A
|
37
|
ITEM 5.
|
MARKET FOR REGISTRANT'S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
38
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
40
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
40
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
45
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
45
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
45
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
45
|
ITEM 9B.
|
OTHER INFORMATION
|
46
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ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
46
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
49
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
52
|
ITEM 13.
|
CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
54
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ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
56
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
57
|
SIGNATURES
|
60
|
ITEM 1.
|
BUSINESS.
|
●
|
Banking processes that insure cell preservation and viability
|
●
|
DNA identification for stem cell ownership
|
●
|
Bio-safety testing at independently certified laboratories.
|
●
|
Cell Therapy
. Cell therapy involves the use of cells, whether derived from adults, children or embryos, third party donors or patients, from various parts of the body, for the treatment of diseases or injuries. Therapeutic applications may include cancer vaccines, cell based immune-therapy, arthritis, heart disease, diabetes, Parkinson’s and Alzheimer’s diseases, vision impairments, orthopedic diseases and brain or spinal cord injuries. This subfield also includes the development of growth factors and serums and natural reagents that promote and guide cell development.
|
●
|
Tissue Engineering
. This subfield involves using a combination of cells with biomaterials (also called “scaffolds”) to generate partially or fully functional tissues and organs, or using a mixture of technology in a bioprinting process. Some natural materials, like collagen, can be used as biomaterial, but advances in materials science have resulted in a variety of synthetic polymers with attributes that would make them uniquely attractive for certain applications. Therapeutic applications may include heart patch, bone re-growth, wound repair, replacement neo-urinary conduits, saphenous arterial grafts, inter-vertebral disc and spinal cord repair.
|
●
|
Diagnostics and Lab Services
. This subfield involves the production and derivation of cell lines that may be used for the development of drugs and treatments for diseases or genetic defects. This sector also includes companies developing devices that are designed and optimized for regenerative medicine techniques, such as specialized catheters for the delivery of cells, tools for the extraction of stem cells and cell-based diagnostic tools.
|
●
|
Our intellectual property portfolio of human adipose derived mesenchymal progenitor/stem cells (haMPC) is well-built and abundant. It covers almost every aspect of adipose stem cell medicine production, including acquisition of human adipose tissue acquisition, preservation, transportation, and storage, tissue, processing, stem cell purification, expansion, banking, formulation for administration, shipment, and administration methods.
|
●
|
Our technology includes adipose derived cellular medicine formulations and their applications in treatment of degenerative diseases and autoimmune diseases, including osteoarthritis, systemic lupus erythematosus, rheumatoid arthritis, and anti-aging.
|
●
|
Our haMPC intellectual property portfolio is distinguished from competitors’ by –
|
o
|
complete coverage of entire production process,
|
o
|
exceptional high yield of Stromal Vascular Fraction (SVF),
|
o
|
convenience of adipose tissue acquisition for banking service, and
|
o
|
preservation techniques enabling long distance shipment of finished cell medicine products.
|
China
Patents
|
Patent
Cooperation
Treaty (PCT)
|
Patents In-
Licensed from U.S.
|
|||||
Work in Process
|
2
|
—
|
—
|
||||
Patents Filed, Pending
|
10
|
3
|
9
|
||||
Granted
|
9
|
—
|
—
|
||||
Total
|
21
|
3
|
9
|
|
●
|
Cash fees and stock equities received as compensation from clients for our listing service;
|
|
●
|
Revenues from operating joint ventures with operating companies generating cash flows; and
|
|
●
|
Fees earned in providing bridge loans to small companies through U.S. lending sources.
|
ITEM 1A.
|
Risk Factors
|
●
|
survive and persist in the desired location;
|
||
●
|
provide the intended therapeutic benefit;
|
||
●
|
engraft or integrate into existing tissue in the desired manner; or
|
||
●
|
achieve therapeutic benefits equal to, or better than, the standard of treatment at the time of testing.
|
●
|
the clinical safety and effectiveness of the product candidates, the availability of alternative treatments and the perceived advantages of the particular product candidates over alternative treatments;
|
|
●
|
the relative convenience and ease of administration of the product candidates;
|
|
●
|
our ability to separate the product candidates from the ethical controversies and political barriers associated with stem cell product candidates derived from human embryonic or fetal tissue;
|
|
●
|
ethical concerns that may arise regarding our commercial use of stem cells, including adult stem cells, in the manufacture of the product candidates;
|
|
●
|
the frequency and severity of adverse events or other undesirable side effects involving the product candidates or the products or product candidates of others that are cell-based; and
|
|
●
|
the cost of the products, the reimbursement policies of government and third-party payors and our ability to obtain sufficient third-party coverage or reimbursement.
|
●
|
regulators or institutional review boards may not authorize us or our investigators to commence clinical trials or conduct clinical trials at a prospective trial site;
|
|
●
|
clinical trials of product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs that we expect to be pursuing;
|
|
●
|
the number of patients required for clinical trials of product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, or participants may drop out of these clinical trials at a higher rate than we anticipate;
|
|
●
|
third party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner or at all;
|
|
●
|
we might have to suspend or terminate clinical trials of our product candidates for various reasons, including a finding that the participants are being exposed to unacceptable health risks;
|
|
●
|
regulators or institutional review boards may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements;
|
|
●
|
the cost of clinical trials of our product candidates may be greater than anticipated;
|
|
●
|
we may be subject to a more complex regulatory process, since cell-based therapies are relatively new and regulatory agencies have less experience with them as compared to traditional pharmaceutical products;
|
|
●
|
the supply or quality of our product candidates or other materials necessary to conduct clinical trials of these product candidates may be insufficient or inadequate; and
|
|
●
|
our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators to halt or terminate the trials.
|
●
|
patients’ willingness to receive a placebo or other inactive control on the control arm of a clinical study;
|
|
●
|
the distance between patients and clinical test sites; and
|
|
●
|
the eligibility criteria for the trial.
|
●
|
our inability to enforce or obtain a remedy under any material agreements;
|
|
●
|
PRC restrictions on foreign investment that could impair our ability to conduct our business or acquire or contract with other entities in the future;
|
|
●
|
restrictions on currency exchange that may limit our ability to use cash flow most effectively or to repatriate our investment;
|
|
●
|
fluctuations in currency values;
|
|
●
|
cultural, language and managerial differences that may reduce our overall performance; and
|
|
●
|
political instability in China.
|
●
|
Section 15(g) of the Exchange Act and Exchange Act rules 15g-1 through 15g-6, which impose additional sales practice requirements on broker-dealers who sell Company securities to persons other than established customers and accredited investors.
|
●
|
Exchange Act rule 15g-2 declares unlawful any broker-dealer transactions in penny stocks unless the broker-dealer has first provided to the customer a standardized disclosure document.
|
●
|
Exchange Act rule 15g-3 provides that it is unlawful for a broker-dealer to engage in a penny stock transaction unless the broker-dealer first discloses and subsequently confirms to the customer the current quotation prices or similar market information concerning the penny stock in question.
|
●
|
Exchange Act rule 15g-4 prohibits broker-dealers from completing penny stock transactions for a customer unless the broker-dealer first discloses to the customer the amount of compensation or other remuneration received as a result of the penny stock transaction.
|
●
|
Exchange Act rule 15g-5 requires that a broker-dealer executing a penny stock transaction, other than one exempt under Rule 15g-1, disclose to its customer, at the time of or prior to the transaction, information about the sales person’s compensation.
|
ITEM 2.
|
PROPERTIES.
|
Palo Alto
|
Scottsdale
|
Beijing China
|
Total
|
|||||||||||||
2012
|
$ | - | $ | 664 | $ | 3,800 | $ | 4,464 | ||||||||
2011
|
$ | - | $ | 664 | $ | 6,050 | $ | 6,714 |
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURE
|
ITEM 5.
|
MARKET FOR REGISTRANT'S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
|
Periods | High | Low | ||||||
Fiscal Year 2012 | ||||||||
First Quarter (January - March 2012) | 8.00 | 4.00 | ||||||
Second Quarter (April - June 2012) | 11.00 | 3.00 | ||||||
Third Quarter (July - September 2012) | 11.00 | 4.00 | ||||||
Fourth Quarter (October - December 2012) | 8.00 | 4.00 | ||||||
Fiscal Year 2011 | ||||||||
First Quarter (January - March 2011) | 18.00 | 10.00 | ||||||
Second Quarter (April - June 2011) | 11.00 | 5.00 | ||||||
Third Quarter (July - September 2011) | 9.00 | 5.00 | ||||||
Fourth Quarter (October - December 2011) | 9.00 | 5.00 |
Plan Category
|
Number of securities
to be issued
upon exercise of
outstanding options,
warrants and rights (#)
|
Weighted-average
exercise price of
outstanding options,
w
arrants and rights ($)
|
Number of securities
remaining available
for future
issuance under
equity compensation plans
|
||||
Equity compensation plans approved by shareholders
|
781,225 | ||||||
Equity compensation plans not approved by shareholders
|
-
|
-
|
-
|
||||
Total
|
-
|
-
|
781,225 |
Years Ended |
Stock
issued for Cash
|
Cash Received |
Stock for
Conversion of Debt
|
Stock Issued
for services
|
Cancelled Shares | |||||||||||||||
December 31, 2012 | 1,250 | $ | 5,000 | 9,101 | 12,668 | $ | - | |||||||||||||
December 31, 2011 | - | $ | - | 14,316 | 45,047 | - | ||||||||||||||
December 31, 2010 | - | $ | - | 43,444 | 39,321 | - |
ITEM 6.
|
SELECTED FINANCIAL DATA.
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
Statement of Operations Data
|
December 31,
|
||||||||
|
2012
|
2011
|
|
||||||
Revenues
|
$ | 9,368,771 | $ | 35,500 | |||||
Operating and Other Expenses
|
(11,316 | ) | (801,915 | ) | |||||
|
|||||||||
Net Income (Loss)
|
$ | 9,357,455 | $ | (766,414 | ) | ||||
|
|||||||||
Balance Sheet Data:
|
|||||||||
|
December 31,
|
||||||||
|
2012 | 2011 | |||||||
Current Assets
|
$ | 3,454,173 | $ | 602,747 | |||||
Total Assets
|
5,293,656 | 1,545,230 | |||||||
Current Liabilities
|
2,383,918 | 1,970,886 | |||||||
Non Current Liabilities
|
110,930 | –– | |||||||
Total Liabilities
|
2,494,848 | 1,970,886 | |||||||
Working Capital (Deficit)
|
1,070,255 | (1,368,139 | ) | ||||||
Shareholders'Equity (Deficit)
|
$ | 2,798,808 | $ | (425,656 | ) |
Year Ended December 31, | Revenues | Change from Prior Year | Percent Change from Prior Year | |||||||||
2012 | $ | 9,368,771 | $ | 9,333,271 | 26,291 | % | ||||||
2011 | $ | 35,500 |
General & Administrative Expenses | Change from Prior Year | Percent Change from Prior Year | ||||||||||
2012 | $ | 1,275,570 | $ | 55,688 | 5 | % | ||||||
2011 | $ | 1,219,882 |
●
|
Increase in accounting and legal fees related to our listing agreements with our clients of approximately $148,000 (we agreed to cover these professional fees for our clients under certain of these agreements).
|
●
|
An increase in payroll tax expense of $119,000 as the Company has accrued for a potential liability from an IRS review.
|
●
|
An increase in payroll expense of $77,000 as the Company has hired additional staff.
|
●
|
A decrease in consulting fees related to the needs of the listing agreements of approximately $230,000 (we agreed to cover non-legal and non-accounting professional fees for our clients under certain of these agreements).
|
●
|
A decrease in rent expense of approximately $39,000, as we entered into an agreement to provide living quarters in Beijing.
|
●
|
A decrease of other general and administrative fees of approximately $19,000.
|
Year Ended December 31,
|
Sales & Marketing Expenses
|
Change
from Prior Year
|
Percent Change
f
rom Prior Year
|
|||||||||
2012
|
$ | 94,435 | $ | (8,044 | ) | (8 | )% | |||||
2011
|
$ | 102,479 |
Year Ended December 31,
|
Operating
Income (Loss)
|
Change
from Prior Year
|
Percent Change
from Prior Year
|
|||||||||
2012
|
$ | 7,998,766 | $ | 9,285,627 | (722 | )% | ||||||
2011
|
$ | (1,286,861 | ) |
Year Ended December 31,
|
Total Other Income (Expense)
|
Change
from Prior Year
|
Percent Change
from Prior Year
|
|||||||||
2012
|
$ | 1,472,239 | $ | 951,792 | 183 | % | ||||||
2011
|
$ | 520,447 |
●
|
An increase in gain from the sale or exchange of investments of approximately $988,000.
|
●
|
A decrease from the extinguishment of debt of approximately $46,500.
|
Year Ended December 31,
|
Income Tax Provision (Benefit)
|
Change
from Prior Year
|
Percent Change
from Prior Year
|
|||||||||
2012
|
$ | (113,550 | ) | $ | (113,550 | ) | 0 | % | ||||
2011
|
$ | - |
Year Ended December 31,
|
Net Income (Loss)
|
Change
from Prior Year
|
Percent Change
from Prior Year
|
|||||||||
2012
|
$ | 9,357,455 | $ | 10,123,869 | (1,321 | )% | ||||||
2011
|
$ | (766,414 | ) |
Year Ended December 31,
|
Comprehensive Net Income (Loss)
|
Change
from Prior Year
|
Percent Change
from Prior Year
|
|||||||||
2012
|
$ | 5,309,543 | $ | 6,098,804 | (773 | )% | ||||||
2011
|
$ | (789,261 | ) |
Year Ended December 31,
|
||||||||
2012
|
2011
|
|||||||
Net cash provided by (used in) operating activities
|
$
|
173,108
|
$
|
347,866
|
||||
Net cash provided by (used in) financing activities
|
(18,399
|
) |
204,983
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
|
Name
|
Age
|
Position
|
||
Wen Tao (Steve) Liu
|
56
|
Chairman of the Board and Chief Executive Officer
|
||
Wei (William) Cao
|
54
|
Director, President, Chief Operating Officer
|
||
Andrew Chan
|
55
|
Chief Financial Officer and Secretary
|
||
Tony Liu
|
48
|
Director
|
||
Jianping Dai
|
67
|
Director
|
||
Keith Wong
|
57
|
Director
|
||
Norman Klein
|
63
|
Director
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
Name and Principal Position
|
Year
|
Salary ($)
|
Nonqualified
|
||||||||||||||
|
Non-Equity
|
Deferred
|
|||||||||||||||
Stock
|
Option
|
Incentive Plan
|
Compensation
|
All Other
|
|||||||||||||
Bonus
|
Awards
|
Awards |
Compensation
|
Earnings
|
Compensation
|
Total
|
|||||||||||
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
|||||||||||
Keith Wong
|
2012
|
240,000
|
30,188
|
- | - | - | - | - |
270,188
|
||||||||
2011
|
240,000
|
- | - | - | - | - |
-
|
240,000
|
|||||||||
Norm Klein
|
2012
|
180,000
|
- | - | - | - | - | - |
180,000
|
||||||||
2011
|
180,000
|
- | - | - | - | - |
-
|
180,000
|
Change
|
||||||||||||||||||||||||||||
|
|
in Pension
|
|
|||||||||||||||||||||||||
Fees
|
Value and
|
|||||||||||||||||||||||||||
Earned
|
Non-Equity
|
Nonqualified
|
||||||||||||||||||||||||||
or
|
Incentive
|
Deferred
|
||||||||||||||||||||||||||
Paid in
|
Stock
|
Option |
Plan
|
Compensation
|
All Other
|
|||||||||||||||||||||||
Cash
|
Awards
|
Awards
|
Compensation
|
Earnings
|
Compensation
|
Total
|
||||||||||||||||||||||
Name
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
|||||||||||||||||||||
Keith Wong
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Norm Klein
|
- | - | - | - | - | - | - |
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|
Name and Address of Beneficial Owner
|
Shares of Common Stock
BeneficiallyOwned
|
Percent
of Class
|
||||||
Named Executive Officers and Directors
|
||||||||
Wen Tao (Steve) Liu
Chief Executive Officer and Chairman of the Board
|
132,337
|
(4)
|
2.46
|
%
|
||||
Wei (William) Cao
President, Chief Operating Officer and Director
|
127,240
|
(5)
|
2.37
|
%
|
||||
Andrew Chan
Chief Financial Officer and Secretary
|
128,423
|
(6)
|
2.39
|
%
|
||||
Tony Liu
Director
|
294
|
(7)
|
*
|
Jianping Dai
|
1,202
|
*
|
||||||
Director
|
||||||||
Keith Wong (1)
Director
|
492,720
|
(2)
|
9.19
|
%
|
||||
Norm Klein (1)
Director
|
136,153
|
(2)
|
2.54
|
%
|
||||
All Officers and Directors as a Group (7 persons)
|
1,018,369
|
18.92
|
%
|
|||||
5% or more Stockholders
|
||||||||
Global Health Investment Holdings Ltd.(3)
|
2,402,299
|
45.32
|
%
|
|||||
Keith Wong (1)
|
492,720
|
(2)
|
9.19
|
% |
(1)
|
The address for this beneficial owner is 8040 E. Morgan Trail, Unit 18, Scottsdale, Arizona 85258.
|
(2)
|
Reflects a reincorporation of the Company from Arizona to Delaware, in which each 100 shares of common stock of the Arizona corporation outstanding was exchanged for one share of Common Stock, with the same effect as a 1:100 reverse stock split, which became effective on January 31, 2013.
|
(3)
|
Mr. Derek Muhs is vice chairman and Mr. Shu Li is chairman of a nine-person board of directors of Global Health Investment Holdings Ltd. (“Global Health”), and in their capacity as chairman and vice chairman, may be deemed to beneficially own the shares of Company common stock held by Global Health. To the Company’s knowledge, Mr. Muhs and Mr. Li on a combined basis are beneficial owners of approximately 16.2% of the outstanding capital stock of Global Health. The mailing address for the principal office of Global Health is Unit 402,4th floor Fairmont House No. 8 Cotton Tree Drive, Admiralty, Hong Kong.
|
(4)
|
Includes 12,222 shares subject to an option to purchase common stock exercisable by Mr. Liu within 60 days of March 25, 2013
|
(5)
|
Includes 4,722 shares subject to an option to purchase common stock exercisable by Mr. Cao within 60 days of March 25, 2013
|
(6)
|
Includes 3,888 shares subject to an option to purchase common stock exercisable by Mr. Chan within 60 days of March 25, 2013
|
(7)
|
Includes 294 shares subject to an option to purchase common stock exercisable by Mr. Liu within 60 days of March 25, 2013
|
ITEM 13.
|
CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
|
Year ended
|
Year ended
|
|||||||
December 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
1.
Audit fees
|
$ | 17,950 | $ | 20,320 | ||||
2.
Audit-related fees
|
0 | 0 | ||||||
3.
Tax fees
|
0 | 0 | ||||||
4.
All other fees
|
0 | 0 | ||||||
Totals
|
$ | 17,950 | $ | 20,320 |
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
|
|
Exhibits
|
Exhibit Number
|
Description
|
|
2.1
|
Plan of reorganization and exchange agreement
1
|
|
2.2
|
Agreement and Plan of Merger, dated November 13, 2012
17
|
|
2.3
|
Amendment No. 1 to Agreement and Plan of Merger, dated January 15, 2013
18
|
|
2.4
|
Amendment No. 2 to Agreement and Plan of Merger, dated January 31, 2013
19
|
|
2.5
|
Amendment No. 3 to Agreement and Plan of Merger, dated February 5, 2013
20
|
|
3.1
|
Articles of incorporation of EastBridge Investment Group Corporation
1
|
|
3.1.2
|
Articles of incorporation of EastBridge Investment Group Corporation, as amended
1
|
|
3.1.3
|
Articles of Amendment for Name Change for EastBridge Investment Group Corporation
1
|
|
3.1.4
|
Certificate of Incorporation for EastBridge Investment Group Corporation
16
|
|
3.1.5
|
Certificate of Conversion
16
|
|
3.1.6
|
Certificate of Ownership and Merger to Change Corporate Name
23
|
|
3.2
|
Corporate bylaws for EastBridge Investment Group Corporation
16
|
|
4.1
|
Form of lock-up agreement
1
|
|
4.2
|
2007 Stock Incentive Plan, dated June 14, 2007
3
|
|
4.3
|
2008 Employees and Consultants Stock Option Plan, dated August 20, 2008
8
|
|
4.4
|
2009 Stock Option Plan
10
|
|
4.5
|
2011 Incentive Stock Option Plan
22
|
|
4.6
|
Amended and Restated 2011 Incentive Stock Option Plan
, filed herewith
|
|
10.1
|
Consulting Employment Agreement between EastBridge Investment Group Corporation and Keith Wong dated June 1, 2005
1
|
|
10.2
|
Consulting Employment Agreement between EastBridge Investment Group Corporation and Norm Klein dated June 1, 2005
1
|
|
10.3
|
Translated Listing Agreement signed with Amonics Limited (signed on 11-23-2006)
2
|
|
10.4
|
Translated Listing Agreement signed with Tianjin Hui Hong Heavy Steel Construction Co., Ltd (signed on 12-03-2006)
2
|
|
10.5
|
Translated Listing Agreement signed with NingGuo Shunchang Machinery Co., Ltd (signed on 01-06-2007)
2
|
|
10.6
|
Translated Listing Agreement with Hefe Ginko Real Estate Company, Ltd. (signed on 07-24-2007)
4
|
|
10.7
|
Share Exchange Agreement with AREM Wine Pty, Ltd. (signed on 09-21-2007)
5
|
|
10.8
|
Listing and Consultant Agreement with AREM Wine Pty, Ltd. (signed 09-27-2007)
6
|
|
10.9
|
Translated Listing Agreement with Beijing Zhong Zhe Huang Holding Company, Ltd. (signed on 10-04-2007)
7
|
|
10.10
|
Translated Listing Agreement with Qinhuangdao Huangwei Pharmaceutical Company Limited (signed on 12-29-2007)
12
|
|
10.11
|
Translated US Listing Agreement with Anhui Wenda Educational & Investment Management Corporation (signed on 04-12-2008)
12
|
|
10.12
|
Stock Purchase Agreement with Ji-Bo Pipes & Valves Company, dated September 21, 2008
9
|
|
10.13
|
Stock Purchase Agreement with Aoxing Corporation, dated September 21, 2008
9
|
|
10.14
|
Translated US Listing Agreement with Foshan Jinkuizi Technology Limited Company (signed on 09-22-2008)
12
|
|
10.15
|
Letter Agreement with Alpha Green Energy Limited (signed on 02-18-2009)
12
|
10.16
|
Listing Agreement with AREM Pacific Corporation (signed on 04-30-2009)
12
|
|
10.17
|
Change in Terms Agreement between EastBridge Investment Group Corporation and Goldwater Bank, N.A. dated May 6, 2009
12
|
|
10.18
|
Translated Listing Agreement with SuZhou KaiDa Road Pavement Construction Company Limited (signed on 11-03-2009)
12
|
|
10.19
|
Translated Listing Agreement with Long Whole Enterprises, Ltd. (signed on 11-28-2009)
12
|
|
10.20
|
Translated Listing Agreement with Beijing Tsingda Century Education Investment and Consultancy Limited (signed on 12-24-2009)
12
|
|
10.21
|
Translated Listing Agreement with StrayArrow International Limited (dated 4-11-2010)
13
|
|
10.22
|
Translated Listing Agreement with Hangzhou Dwarf Technology Ltd. (dated 9-26-2010)
14
|
|
10.23
|
Bridge Capital Raise Agreement with FIZZA, LLC, dated December 1, 2010 (confidential treatment requested for redacted portions)
15
|
|
10.24
|
Stock Purchase Agreement with An Lingyan, dated December 14, 2011
21
|
|
14.1
|
Code of Ethics for EastBridge Investment Group Corporation
1
|
|
16.1
|
Letter of Jewett, Schwartz, Wolfe & Associates
11
|
|
21.1
|
Subsidiaries of the Company
12
|
|
23.1
|
Consent of Tarvavan, Askelson & Company, LLP, filed herewith
|
|
31.1
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Chief Executive Officer, filed herewith.
|
|
31.2
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Chief Financial Officer, filed herewith.
|
|
32
|
Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
|
1.
|
Incorporated by reference filed with the Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on October 30, 2006 (File No. 000-52282)
|
2.
|
Incorporated by reference filed with the Registration Statement on Form 10-SB/A filed with the Securities and Exchange Commission on February 27, 2007 (File No. 000-52282)
|
3.
|
Incorporated by reference filed with the Registration Statement on Form S-8 filed with the Securities and Exchange Commission on June 19, 2007 (File No. 333-143878)
|
4.
|
Incorporated by reference filed with the Form 8-K filed with the Securities and Exchange Commission on July 20, 2007 (File No. 000-52282)
|
5.
|
Incorporated by reference filed with the Form 8-K filed with the Securities and Exchange Commission on September 25, 2007 (File No. 000-52282)
|
6.
|
Incorporated by reference filed with the Form 8-K filed with the Securities and Exchange Commission on October 1, 2007 (File No. 000-52282)
|
7.
|
Incorporated by reference filed with the Form 8-K filed with the Securities and Exchange Commission on October 9, 2007 (File No. 000-52282)
|
8.
|
Incorporated by reference filed with the Registration Statement on Form S-8 filed with the Securities and Exchange Commission on August 22, 2008 (File No. 333-153129)
|
9.
|
Incorporated by reference filed with the Form 8-K filed with the Securities and Exchange Commission on October 22, 2008 (File No. 000-52282)
|
10.
|
Incorporated by reference filed with the Registration Statement on Form S-8 filed with the Securities and Exchange Commission on April 15, 2009 (File No. 333-158583)
|
11.
|
Incorporated by reference filed with the Form 8-K/A filed with the Securities and Exchange Commission on May 18, 2009 (File No. 000-52282)
|
12.
|
Incorporated by reference filed with the Form 10-K filed with the Securities and Exchange Commission on April 15, 2010 (File No. 000-52282)
|
13.
|
Incorporated by reference filed with the Form 8-K filed with the Securities and Exchange Commission on July 14, 2010 (File No. 000-52282)
|
14.
|
Incorporated by reference filed with the Form 8-K filed with the Securities and Exchange Commission on November 12, 2010 (File No. 000-52282
|
15.
|
Incorporated by reference filed with the Form 8-K filed with the Securities and Exchange Commission on December 7, 2010 (File No. 000-52282)
|
16.
|
Incorporated by reference filed with the Form 8-K filed with the Securities and Exchange Commission on January 25, 2013 (File No. 000-52282)
|
17.
|
Incorporated by reference filed with the Form 8-K filed with the Securities and Exchange Commission on November 20, 2012 (File No. 000-52282)
|
18.
|
Incorporated by reference filed with the Form 8-K filed with the Securities and Exchange Commission on January 22, 2013 (File No. 000-52282)
|
19.
|
Incorporated by reference filed with the Form 8-K filed with the Securities and Exchange Commission on February 4, 2013 (File No. 000-52282)
|
20.
|
Incorporated by reference filed with the Form 8-K filed with the Securities and Exchange Commission on February 12, 2013 (File No. 000-52282)
|
21.
|
Incorporated by reference filed with the Form 8-K filed with the Securities and Exchange Commission on January 3, 2012 (File No. 000-52282)
|
22.
|
Incorporated by reference filed with the Registration Statement on Form S-8 filed with the Securities and Exchange Commission on March 7, 2012 (File No. 333-179974)
|
23.
|
Incorporated by reference filed with the Form 8-K filed with the Securities and Exchange Commission on March 8, 2013 (File No. 000-52282)
|
Registrant
|
Cellular Biomedicine Group, Inc.
|
||
Date: April 3, 2013
|
By:
|
/s/ Wen Tao (Steve) Liu | |
Wen Tao (Steve) Liu | |||
Chairman, Chief Executive Officer (Principal Executive Officer)
|
|||
Date: April 3, 2013
|
By:
|
/s/ Andrew Chan | |
Andrew Chan | |||
Chief Financial Officer and Secretary
(Principal Financial and Accounting Officer)
|
|||
Date: April 3, 2013
|
By:
|
/s/ Wen Tao (Steve) Liu | |
Wen Tao (Steve) Liu | |||
Chairman, Chief Executive Officer (Principal Executive Officer)
|
|||
Date: April 3, 2013
|
By:
|
/s/ Andrew Chan | |
Andrew Chan | |||
Chief Financial Officer and Secretary
(Principal Financial and Accounting Officer)
|
|||
Date: April 3, 2013
|
By:
|
/s/ Wei (William) Cao | |
Wei (William) Cao | |||
President and Chief Operating Officer | |||
Director |
Date: April 3, 2013
|
By:
|
/s/ Tony Liu | |
Tony Liu | |||
Director
|
|||
Date: April 3, 2013
|
By:
|
/s/ Jianping Dai | |
Jianping Dai | |||
Director
|
|||
Date: April 3, 2013
|
By:
|
/s/ Keith Wong | |
Keith Wong | |||
Director
|
|||
Date: April 3, 2013
|
By:
|
/s/ Norm Klein | |
Norm Klein
|
|||
Director
|
|||
Page
|
||||
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM:
|
2 | |||
CONSOLIDATED FINANCIAL STATEMENTS:
|
||||
Consolidated Balance Sheet at December 31, 2012 and 2011
|
3 | |||
Consolidated Statements of Operations for the years ended
December 31, 2012 and 2011
|
4 | |||
Consolidated Statements of Shareholders' Equity for the years ended
December 31, 2012 and 2011
|
5 | |||
Consolidated Statements of Cash Flows for the years ended
December 31, 2012 and 2011
|
6 | |||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
7 |
December 31,
2012
|
December 31,
2011
|
|||||||
Assets
|
||||||||
Cash
|
$ | 757,457 | $ | 602,747 | ||||
Accounts Receivable
|
2,646,716 | $ | - | |||||
Other assets
|
50,000 | - | ||||||
Total current assets
|
3,454,173 | 602,747 | ||||||
Investments
|
1,839,483 | 942,483 | ||||||
Total assets
|
$ | 5,293,656 | $ | 1,545,230 | ||||
Liabilities and Stockholders' Equity
|
||||||||
Liabilities:
|
||||||||
Accounts payable
|
$ | 177,161 | $ | 189,296 | ||||
Disputed accounts payable
|
194,711 | 208,350 | ||||||
Accrued expenses
|
1,153,222 | 982,003 | ||||||
Deferred tax liability current
|
2,511 | - | ||||||
Deferred revenue
|
251,834 | 376,104 | ||||||
Advances payable to related party
|
32,635 | 115,133 | ||||||
Other current liabilities
|
571,844 | 100,000 | ||||||
Total current liabilities
|
2,383,918 | 1,970,886 | ||||||
Deferred tax liability non-current
|
110,930 | - | ||||||
Total liabilities
|
2,494,848 | 1,970,886 | ||||||
Stockholders' equity:
|
||||||||
Preferred stock, par value $.001, 50,000,000 shares
|
||||||||
authorized; none issued and outstanding
|
||||||||
as of December 31, 2012 and December 31, 2011, respectively
|
- | - | ||||||
Common stock, par value $.001, 300,000,000 shares authorized;
|
||||||||
1,568,920 and 1,545,902 issued and outstanding
|
||||||||
as of December 31, 2012 and December 31, 2011, respectively
|
1,569 | 1,546 | ||||||
Additional paid in capital
|
6,330,244 | 6,188,505 | ||||||
Retained earnings (deficit)
|
514,907 | (6,592,860 | ) | |||||
Accumulated other comprehensive loss
|
(4,047,912 | ) | (22,847 | ) | ||||
Total stockholders' equity
|
2,798,808 | (425,656 | ) | |||||
Total liabilities and stockholder's equity
|
$ | 5,293,656 | $ | 1,545,230 |
Year ended
|
||||||||
December 31,
|
||||||||
2012
|
2011
|
|||||||
Revenues
|
$ | 9,368,771 | $ | 35,500 | ||||
Cost of services
|
- | - | ||||||
Gross profit
|
9,368,771 | 35,500 | ||||||
Operating expenses:
|
||||||||
General and administrative
|
1,275,570 | 1,219,882 | ||||||
Selling and marketing
|
94,435 | 102,479 | ||||||
Total operating expenses
|
1,370,005 | 1,322,361 | ||||||
Operating income (loss)
|
7,998,766 | (1,286,861 | ) | |||||
Other income (expense)
|
||||||||
Interest expense
|
(58 | ) | (9,871 | ) | ||||
Interest income
|
182 | - | ||||||
Gain on extinguishment of debt
|
6,128 | 52,688 | ||||||
Other income (expense)
|
1,465,987 | 477,630 | ||||||
Total other income (expense)
|
1,472,239 | 520,447 | ||||||
Income (loss) before taxes
|
9,471,005 | (766,414 | ) | |||||
Income tax benefit (provision)
|
(113,550 | ) | - | |||||
Net income (loss)
|
$ | 9,357,455 | $ | (766,414 | ) | |||
Other comprehensive income (loss):
|
||||||||
Unrecognized gain (loss) on investments
|
(4,047,912 | ) | (22,847 | ) | ||||
Comprehensive net income (loss)
|
$ | 5,309,543 | $ | (789,261 | ) | |||
Earnings per share:
|
||||||||
Basic and diluted
|
$ | 5.99 | $ | (0.50 | ) | |||
Weighted average common shares outstanding:
|
||||||||
Basic and diluted
|
1,561,422 | 1,521,614 |
Accumulated Other
Comprehensive
|
||||||||||||||||||||||||||||||||
Common Stock
|
Preferred Stock
|
Additional
|
||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Paid in Capital
|
Income(Loss)
|
Earnings (Deficit)
|
Total
|
|||||||||||||||||||||||||
Balance at December 31, 2010
|
1,486,539 | $ | 1,487 | - | $ | - | $ | 5,670,754 | $ | - | $ | (5,613,378 | ) | $ | 58,863 | |||||||||||||||||
Common stock issued for debt
|
14,316 | 14 | - | - | 100,198 | - | - | 100,212 | ||||||||||||||||||||||||
Common stock issued to consultants
|
45,047 | 45 | - | - | 417,553 | - | - | 417,598 | ||||||||||||||||||||||||
Net loss
|
- | - | - | - | - | - | (766,414 | ) | (766,414 | ) | ||||||||||||||||||||||
Stock dividend issued
|
- | - | - | - | - | - | (213,068 | ) | (213,068 | ) | ||||||||||||||||||||||
Unrecognized gain on investments
|
- | - | - | - | - | (22,847 | ) | - | (22,847 | ) | ||||||||||||||||||||||
Balance at December 31, 2011
|
1,545,902 | 1,546 | - | - | 6,188,505 | (22,847 | ) | (6,592,860 | ) | (425,656 | ) | |||||||||||||||||||||
Common stock issued for debt
|
9,101 | 9 | - | - | 54,596 | - | - | 54,605 | ||||||||||||||||||||||||
Common stock issued to consultants
|
13,917 | 14 | - | - | 87,143 | - | - | 87,157 | ||||||||||||||||||||||||
Net Income
|
- | - | - | - | - | - | 9,357,455 | 9,357,455 | ||||||||||||||||||||||||
Stock dividend issued
|
- | - | - | - | - | - | (2,249,688 | ) | (2,249,688 | ) | ||||||||||||||||||||||
Unrecognized gain on investments
|
- | - | - | - | - | (4,025,065 | ) | - | (4,025,065 | ) | ||||||||||||||||||||||
Balance at December 31, 2012
|
1,568,920 | $ | 1,569 | - | $ | - | $ | 6,330,244 | $ | (4,047,912 | ) | $ | 514,907 | $ | 2,798,808 |
Year ended December 31,
|
||||||||
2012
|
2011
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income (loss)
|
$ | 9,357,455 | $ | (766,414 | ) | |||
Adjustments to reconcile net loss to net cash
|
||||||||
used in operating activities:
|
||||||||
Common stock issued for services
|
51,350 | 417,598 | ||||||
Deferred tax liability
|
113,441 | - | ||||||
Gain on the extinguishment of debt
|
(6,128 | ) | (52,688 | ) | ||||
Value of investment stock received for services
|
(7,171,753 | ) | 435,684 | |||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivables
|
(2,646,716 | ) | - | |||||
Other current assets
|
(50,000 | ) | - | |||||
Accounts payables
|
20,305 | (108,982 | ) | |||||
Accrued liabilities
|
157,580 | 434,435 | ||||||
Deferred revenue
|
(124,270 | ) | 41,233 | |||||
Other current liabilities
|
471,844 | (53,000 | ) | |||||
Net cash provided by operating activities
|
173,108 | 347,866 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Repayment of line of credit
|
- | (18,750 | ) | |||||
Repayment of advances from affiliate
|
(46,120 | ) | - | |||||
Advances from affiliate
|
27,722 | 223,733 | ||||||
Net cash provided by (used in) financing activities
|
(18,398 | ) | 204,983 | |||||
INCREASE IN CASH
|
154,710 | 552,849 | ||||||
CASH, BEGINNING OF PERIOD
|
602,747 | 49,898 | ||||||
CASH, END OF PERIOD
|
$ | 757,457 | $ | 602,747 | ||||
SUPPLEMENTAL CASH FLOW INFORMATION
|
||||||||
Interest paid
|
$ | 1,795 | $ | 6,532 | ||||
Non cash transactions
|
||||||||
Issuance of company stock for accrued liabilities and advances
|
$ | 32,440 | $ | 7,071 | ||||
Debt extinguished with issuance of company stock
|
$ | 64,100 | $ | 152,900 | ||||
Distribution of investment stock as dividend
|
$ | 2,249,688 | $ | - | ||||
2012
|
||||||||||||||||
Fair Vaue Measurements at Reporting Date Using:
|
||||||||||||||||
Quoted Prices in
|
Significant Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||||
Active Markets for
|
||||||||||||||||
Identical Assets
|
||||||||||||||||
Total
|
(Level 1)
|
|||||||||||||||
Assets:
|
||||||||||||||||
Investment Type 1
|
$ | 1,839,483 | $ | 1,839,483 | $ | - | $ | - | ||||||||
Investment Type 2
|
- | - | - | - | ||||||||||||
$ | 1,839,483 | $ | 1,839,483 | $ | - | $ | - |
2011
|
||||||||||||||||
Fair Vaue Measurements at Reporting Date Using:
|
||||||||||||||||
Quoted Prices in
|
Significant Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||||
Active Markets for
|
||||||||||||||||
Identical Assets
|
||||||||||||||||
Total
|
(Level 1)
|
|||||||||||||||
Assets:
|
||||||||||||||||
Investment Type 1
|
$ | 114,235 | $ | 114,235 | $ | - | $ | - | ||||||||
Investment Type 2
|
828,249 | - | - | 828,249 | ||||||||||||
$ | 942,484 | $ | 114,235 | $ | - | $ | 828,249 |
Investments
|
||||||||
2012
|
2011
|
|||||||
Beginning balance
|
$ | 828,249 | $ | 1,477,000 | ||||
Purchases
|
- | - | ||||||
Net realized and unrealized losses
|
- | - | ||||||
Sold and Transferred
|
(828,249 | ) | (648,751 | ) | ||||
Ending balance
|
$ | - | $ | 828,249 |
Year ending December 31,
|
Amount
|
|||
2013
|
$ | 9,317 | ||
2014
|
5,435 | |||
$ | 14,752 |
December 31,
2012
|
December 31,
2011
|
|||||||
Current:
|
||||||||
Federal
|
$ | 14,379 | $ | - | ||||
State
|
2,511 | - | ||||||
16,890 | - | |||||||
Deferred:
|
||||||||
Federal
|
$ | (1,887,057 | ) | $ | 260,581 | |||
State
|
374,510 | 42,153 | ||||||
(1,512,547 | ) | 302,734 | ||||||
Change in
valuation allowance
|
1,625,988 | (302,734 | ) | |||||
Provision for income taxes, net
|
$ | 113,441 | $ | - |
December 31,
2012
|
December 31,
2011
|
|||||||
Statutory federal income tax rate
|
35.00 | % | 34.00 | % | ||||
State income taxes and other
|
6.97 | % | 5.50 | % | ||||
Effective tax rate
|
39.53 | % | 39.50 | % |
December 31,
2012
|
December 31,
2011
|
|||||||
Net operating loss carryforward
|
(1,666,265 | ) | 3,046,593 | |||||
Valuation allowance
|
1,666,265 | (3,046,593 | ) | |||||
Deferred income tax asset
|
- | - |
December 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Jinkuizi Science & Technology Company
|
- | (45,000 | ) | |||||
Alpha Green Energy Company
|
- | (112,212 | ) | |||||
Kaida Road Construction Company
|
(73,000 | ) | (73,000 | ) | ||||
Huang Wei Pharmaceutical Company
|
- | (9,559 | ) | |||||
AREM Pacific Corporation
|
(92,985 | ) | (50,485 | ) | ||||
Dwarf Technologies
|
(75,814 | ) | (75,814 | ) | ||||
LongWen
|
(10,035 | ) | (10,035 | ) | ||||
Deferred Revenue
|
$ | (251,834 | ) | $ | (376,104 | ) |
|
Total shares
reserved
under the
plan
|
Remaining
shares available for issuance
under the
plan
|
||||||
2009 Stock Option Plan
|
100,000
|
4,593
|
|
Total shares
reserved
under the
plan
|
Remaining
shares available for issuance
under the
plan
|
|
|||||
2011 Incentive Stock Option Plan
|
|
|
300,000
|
|
|
|
296,632
|
|
a.
|
“
Affiliate
”
means (i) any person or entity that directly or indirectly controls, is controlled by or is under common control with the Company and/or (ii) to the extent provided by the Committee, any person or entity in which the Company has a significant interest as determined by the Committee in its discretion. The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as applied to any person or entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person or entity, whether through the ownership of voting or other securities, by contract or otherwise.
|
b.
|
“
Award
”
means, individually or collectively, any Stock Option, Stock Appreciation Right and Restricted Stock Award granted under this Plan.
|
c.
|
“
Board
”
means the Board of Directors of the Company.
|
d.
|
“
Business Day
”
means any day other than a Saturday, a Sunday or a day on which banking institutions in New York City are authorized or obligated by federal law or executive order to be closed.
|
e.
|
“
Cause
”
means, in the case of a particular Award, unless the applicable Award agreement states otherwise, (i) the Company or an Affiliate having “cause” to terminate a Participant’s employment or service, as defined in any employment or consulting agreement or similar document or policy between the Participant and the Company or an Affiliate in effect at the time of such termination or (ii) in the absence of any such employment or consulting agreement, document or policy (or the absence of any definition of “Cause” contained therein), (A) a continuing material breach or material default (including, without limitation, any material dereliction of duty) by Participant of any agreement between the Participant and the Company, except for any such breach or default which is caused by the physical disability of the Participant (as determined by a neutral physician), or a continuing failure by the Participant to follow the direction of a duly authorized representative of the Company; (B) gross negligence, willful misfeasance, neglect or breach of fiduciary duty by the Participant; (C) the commission by the Participant of an act of fraud, embezzlement or any felony or other crime of dishonesty in connection with the Participant’s duties to the Company; or (D) conviction of the Participant of a felony or any other crime that would materially and adversely affect (i) the business reputation of the Company or (ii) the
performance of the Participant’s duties to the Company. Any determination of whether Cause exists shall be made by the Committee in its sole discretion.
|
f.
|
“
Change in Control
”
shall, in the case of a particular Award, unless the applicable Award agreement states otherwise or contains a different definition of “Change in Control,” be deemed to occur upon:
|
g.
|
“
Closing Price
”
means (A) during such time as the Common Stock is registered under Section 10 of the Exchange Act, the closing price of the Common Stock as reported by an established stock exchange or automated quotation system on the day for which such value is to be determined, or, if no sale of the Common Stock shall have been made on any such stock exchange or automated quotation system that day, on the next preceding day on which there was a sale of such Common Stock, or (B) during any such time as the Common Stock is not listed upon an established stock exchange or automated quotation system, the mean between dealer “bid” and “ask” prices of the Common Stock in the over-the-counter market on the day for which such value is to be determined, as reported by the Financial Industry Regulatory Authority, Inc., or (C) during any such time as the Common Stock cannot be valued pursuant to (A) or (B) above, the fair market value as determined by the Committee considering all relevant information including, by way of example and not by limitation, the services of an independent appraiser.
|
h.
|
“
Code
”
means the Internal Revenue Code of 1986, as amended, and any successor thereto. References in this Plan to any section of the Code shall be deemed to include any regulations or other interpretative guidance under such section, and any amendments or successor provisions to such section, regulations or guidance.
|
i.
|
“
Committee
”
means a committee of at least two people as the Board may appoint to administer this Plan or, if no such committee has been appointed by the Board, the Board.
|
j.
|
“
Common Stock
”
means the common stock, no par value, of the Company (and any stock or other securities into which such Common Stock may be converted or into which they may be exchanged).
|
k.
|
“
Company
”
means EastBridge Investment Group Corporation, an Arizona corporation, together with its successors and assigns.
|
l.
|
“
Date of Grant
”
means the date on which the granting of an Award is made, or such other date as may be specified in an Award agreement.
|
m.
|
“
Disability
”
means a permanent and total disability incurred by a Participant while in the employ of the Company or an Affiliate. For this purpose, a permanent and total disability shall mean that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months.
|
n.
|
“
Effective Date
”
means November 28, 2012, subject to Section 3 of this Plan.
|
o.
|
“
Eligible Director
”
means a person who is (i) a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act, and (ii) an “outside director” within the meaning of Section 162(m) of the Code.
|
p.
|
“
Eligible Person
”
means any (i) individual employed by the Company or an Affiliate;
provided
,
however
, that no such employee covered by a collective bargaining agreement shall be an Eligible Person unless and to the extent that such eligibility is set forth in such collective bargaining agreement or in an agreement or instrument relating thereto; (ii) director of the Company or an Affiliate; (iii) consultant or advisor to the Company or an Affiliate, provided that if the Securities Act applies, such persons must be eligible to be offered securities registrable on Form S-8 under the Securities Act; or (iv) prospective employees, directors, officers, consultants or advisors who have accepted offers of employment or consultancy from the Company or its Affiliates (and would satisfy the provisions of clauses (i) through (iii) above once he or she begins employment with or begins providing services to the Company or an Affiliate).
|
q.
|
“
Exchange Act
”
has the meaning given such term in the definition of “Change in Control,” and any reference in this Plan to any section of (or rule promulgated under) the Exchange Act shall be deemed to include any rules, regulations or other interpretative guidance under such section or rule, and any amendments or successor provisions to such section, rules, regulations or guidance.
|
r.
|
“
Exercise Price
”
has the meaning given such term in Section 7(b) of this Plan.
|
s.
|
“
Fair Market Value
”
, unless otherwise provided by the Committee in accordance with all applicable laws, rules regulations and standards, means, on a given date, (i) if the Common Stock (A) is listed on a national securities exchange or (B) is not listed on a national securities exchange, but is quoted by the OTC Markets Group, Inc. (
www.otcmarkets.com
) or any successor or alternative recognized over-the-counter market or another inter-dealer quotation system, on a last sale basis, the average selling price of the Common Stock reported on such national securities exchange or other inter-dealer quotation system, determined as the arithmetic mean of such selling prices over the thirty (30)-Business Day period preceding the Date of Grant, weighted based on the volume of trading of such Common Stock on each trading day during such period; or (ii) if the Common Stock is not listed on a national securities exchange or quoted in an inter-dealer quotation system on a last sale basis, the amount determined by the Committee in good faith to be the fair market value of the Common Stock.
|
t.
|
“
Immediate Family Members
”
shall have the meaning set forth in Section 13(b) of this Plan.
|
u.
|
“
Incentive Stock Option
”
means an Option that is designated by the Committee as an incentive stock option as described in Section 422 of the Code and otherwise meets the requirements set forth in this Plan.
|
v.
|
“
Indemnifiable Person
”
shall have the meaning set forth in Section 4(e) of this Plan.
|
w.
|
“
Mature Shares
”
means Common Stock owned by a Participant that is not subject to any pledge or security interest and that has been either previously acquired by the Participant on the open market or meet such other requirements, if any, as the Committee may determine are necessary in order to avoid an accounting earnings charge on account of the use of such stock to pay the Exercise Price or satisfy a withholding obligation of the Participant.
|
x.
|
“
Nonqualified Stock Option
”
means an Option that is not designated by the Committee as an Incentive Stock Option.
|
y.
|
“
Option
”
means an Award granted under Section 7 of this Plan.
|
z.
|
“
Option Period
”
has the meaning given such term in Section 7(c) of this Plan.
|
aa.
|
“
Participant
”
means an Eligible Person who has been selected by the Committee to participate in this Plan and to receive an Award pursuant to Section 5 of this Plan.
|
bb.
|
“
Permitted Transferee
”
shall have the meaning set forth in Section 13(b) of this Plan.
|
cc.
|
“
Person
”
has the meaning given such term in the definition of “Change in Control.”
|
dd.
|
“
Plan
”
means this Amended and Restated 2011 Incentive Stock Option Plan, as amended from time to time.
|
ee.
|
“
Retirement
”
means the fulfillment of each of the following conditions: (i) the Participant is in good standing with the Company as determined by the Committee; (ii) the voluntary termination by a Participant of such Participant’s employment or service to the Company and (iii) that at the time of such voluntary termination, the sum of: (1) the Participant’s age (calculated to the nearest month, with any resulting fraction of a year being calculated as the number of months in the year divided by 12) and (2) the Participant’s years of employment or service with the Company (calculated to the nearest month, with any resulting fraction of a year being calculated as the number of months in the year divided by 12) equals at least 62 (provided that, in any case, the foregoing shall only be applicable if, at the time of Retirement, the Participant shall be at least 55 years of age and shall have been employed by or served with the Company for no less than 5 years).
|
ff.
|
“
Restricted Period
”
means the period of time determined by the Committee during which an Award is subject to restrictions or, as applicable, the period of time within which performance is measured for purposes of determining whether an Award has been earned.
|
gg.
|
“
Restricted Stock Award
”
means Common Stock, subject to certain specified restrictions (including, without limitation, a requirement that the Participant remain continuously employed or provide continuous services for a specified period of time), granted under Section 9 of this Plan.
|
hh.
|
“
SAR Period
”
has the meaning given such term in Section 8(b) of this Plan.
|
ii.
|
“
Securities Act
”
means the Securities Act of 1933, as amended, and any successor thereto. Reference in this Plan to any section of the Securities Act shall be deemed to include any rules, regulations or other official interpretative guidance under such section, and any amendments or successor provisions to such section, rules, regulations or guidance.
|
jj.
|
“
Stock Appreciation Right
”
or
“
SAR
”
means an Award granted under Section 8 of this Plan which meets all of the requirements of Section 1.409A-1(b)(5)(i)(B) of the Treasury Regulations.
|
kk.
|
“
Strike Price
”
means, except as otherwise provided by the Committee in the case of Substitute Awards, (i) in the case of a SAR granted in tandem with an Option, the Exercise Price of the related Option, or (ii) in the case of a SAR granted independent of an Option, the Fair Market Value of one share of Common Stock on the Date of Grant.
|
ll.
|
“
Subsidiary
”
means, with respect to any specified Person:
|
mm.
|
“
Substitute Award
”
has the meaning given such term in Section 5(e).
|
nn.
|
“
Treasury Regulations
”
means any regulations, whether proposed, temporary or final, promulgated by the U.S. Department of Treasury under the Code, and any successor provisions.
|
a.
|
The Committee shall administer this Plan. To the extent required to comply with the provisions of Rule 16b-3 promulgated under the Exchange Act (if the Board is not acting as the Committee under this Plan) or necessary to obtain the exception for performance-based compensation under Section 162(m) of the Code, as applicable, it is intended that each member of the Committee shall, at the time he takes any action with respect to an Award under this Plan, be an Eligible Director. However, the fact that a Committee member shall fail to qualify as an Eligible Director shall not invalidate any Award granted by the Committee that is otherwise validly granted under this Plan. The acts of a majority of the members present at any meeting at which a quorum is present or acts approved in writing by all of the members of the Committee shall be deemed the acts of the Committee. Whether a quorum is present shall be determined based on the Committee’s charter as approved by the Board.
|
b.
|
Subject to the provisions of this Plan and applicable law, the Committee shall have the sole and plenary authority, in addition to other express powers and authorizations conferred on the Committee by this Plan and its charter, to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to a Participant; (iii) determine the number of shares of Common Stock to be covered by, or with respect to which payments, rights, or other matters are to be calculated in connection with, Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Common Stock, other securities, other Awards or other property, or canceled, forfeited, or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended; (vi) determine whether, to what extent, and under what circumstances the delivery of cash, Common Stock, other securities, other Awards or other property and other amounts payable with respect to an Award; (vii) interpret, administer, reconcile any inconsistency in, settle any controversy regarding, correct any defect in and/or complete any omission in this Plan and any instrument or agreement relating to, or Award granted under, this Plan; (viii) establish, amend, suspend, or waive any rules and regulations and appoint such agents as the Committee shall deem appropriate for the proper administration of this Plan; (ix) accelerate the vesting or exercisability of, payment for or lapse of restrictions on, Awards; and (x) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of this Plan.
|
c.
|
The Committee may delegate to one or more officers of the Company or any Affiliate the authority to act on behalf of the Committee with respect to any matter, right, obligation, or election that is the responsibility of or that is allocated to the Committee herein, and that may be so delegated as a matter of law, except for grants of Awards to persons (i) subject to Section 16 of the Exchange Act or (ii) who are, or who are reasonably expected to be, “covered employees” for purposes of Section 162(m) of the Code.
|
d.
|
Unless otherwise expressly provided in this Plan, all designations, determinations, interpretations, and other decisions under or with respect to this Plan or any Award or any documents evidencing Awards granted pursuant to this Plan shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon all persons or entities, including, without limitation, the Company, any Affiliate, any Participant, any holder or beneficiary of any Award, and any stockholder of the Company.
|
e.
|
No member of the Board, the Committee, delegate of the Committee or any employee, advisor or agent of the Company or the Board or the Committee (each such person, an “
Indemnifiable Person
”) shall be liable for any action taken or omitted to be taken or any determination made in good faith with respect to this Plan or any Award hereunder. Each Indemnifiable Person shall be indemnified and held harmless by the Company against and from (and the Company shall pay or reimburse on demand for) any loss, cost, liability, or expense (including reasonable attorneys’ fees) that may be imposed upon or incurred by such Indemnifiable Person in connection with or resulting from any action, suit or proceeding to which such Indemnifiable Person may be a party or in which such Indemnifiable Person may be involved by reason of any action taken or omitted to be taken under this Plan or any Award agreement and against and from any and all amounts paid by such Indemnifiable Person with the Company’s approval, in settlement thereof, or paid by such Indemnifiable Person in satisfaction of any judgment in any such action, suit or proceeding against such Indemnifiable Person,
provided
, that the Company shall have the right, at its own expense, to assume and defend any such action, suit or proceeding and once the Company gives notice of its intent to assume the defense, the Company shall have sole control over such defense with counsel of the Company’s choice. The foregoing right of indemnification shall not be available to an Indemnifiable Person to the extent that a final judgment or other final adjudication (in either case not subject to further appeal) binding upon such Indemnifiable Person determines that the acts or omissions of such Indemnifiable Person giving rise to the indemnification claim resulted from such Indemnifiable Person’s bad faith, fraud or willful criminal act or omission or that such right of indemnification is otherwise prohibited by law or by the Company’s Certificate of Incorporation or Bylaws. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such Indemnifiable Persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any other power that the Company may have to indemnify such Indemnifiable Persons or hold them harmless.
|
f.
|
Notwithstanding anything to the contrary contained in this Plan, the Board may, in its sole discretion, at any time and from time to time, grant Awards and administer this Plan with respect to such Awards. In any such case, the Board shall have all the authority granted to the Committee under this Plan.
|
a.
|
The Committee may, from time to time, grant Options, Stock Appreciation Rights and Restricted Stock Awards to one or more Eligible Persons.
|
b.
|
Subject to Sections 3 and 10 of this Plan, the Committee is authorized to deliver under this Plan an aggregate of Seventy Eight Million (78,000,000) shares of Common Stock, which such number shall be increased on the first day of each fiscal year of the Company beginning in 2014 in an amount equal to one percent (1%) of the number of shares of Common Stock outstanding as of such date, or such lesser number of shares of Common Stock as determined by the Committee. Subject to Section 5(c) below, each share of Common Stock subject to an Award will reduce the number of shares of Common Stock available for issuance under this Plan by one share.
|
c.
|
Shares of Common Stock underlying Awards under this Plan that are forfeited, cancelled, expire unexercised, or are settled in cash shall be available again for Awards under this Plan. Notwithstanding the foregoing, the following shares of Common Stock shall not be available again for Awards under the Plan: (i) shares tendered or held back upon the exercise of an Option or settlement of an Award to cover the Exercise Price of an Award; (ii) shares that are used or withheld to satisfy tax obligations of the Participant; and (iii) shares subject to a Stock Appreciation Right that are not issued in connection with the stock settlement of the SAR upon exercise thereof.
|
d.
|
Shares of Common Stock delivered by the Company in settlement of Awards may be authorized and unissued shares, shares held in the treasury of the Company, shares purchased on the open market or by private purchase, or a combination of the foregoing.
|
e.
|
Subject to compliance with Section 1.409A-3(f) of the Treasury Regulations, Awards may, in the sole discretion of the Committee, be granted under this Plan in assumption of, or in substitution for, outstanding awards previously granted by an entity acquired by the Company or with which the Company combines (“
Substitute Awards
”). The number of shares of Common Stock underlying any Substitute Awards shall be counted against the aggregate number of shares of Common Stock available for Awards under this Plan.
|
a.
|
Generally
. Each Option granted under this Plan shall be evidenced by an Award agreement (whether in paper or electronic medium (including email or the posting on a web site maintained by the Company or a third party under contract with the Company)). Each Option so granted shall be subject to the conditions set forth in this Section 7, and to such other conditions not inconsistent with this Plan as may be reflected in the applicable Award agreement. All Options granted under this Plan shall be Nonqualified Stock Options unless the applicable Award agreement expressly states that the Option is intended to be an Incentive Stock Option. Notwithstanding any designation of an Option, to the extent that the aggregate Fair Market Value of shares of Common Stock with respect to which Options designated as Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under all plans of the Company or any Subsidiary) exceeds $100,000, such excess Options shall be treated as Nonqualified Stock Options. Incentive Stock Options shall be granted only to Eligible Persons who are employees of the Company and its Affiliates, and no Incentive Stock Option shall be granted to any Eligible Person who is ineligible to receive an Incentive Stock Option under the Code. No Option shall be treated as an Incentive Stock Option unless this Plan has been approved by the stockholders of the Company in a manner intended to comply with the stockholder approval requirements of Section 422(b)(1) of the Code, provided that any Option intended to be an Incentive Stock Option shall not fail to be effective solely on account of a failure to obtain such approval, but rather such Option shall be treated as a Nonqualified Stock Option unless and until such approval is obtained. In the case of an Incentive Stock Option, the terms and conditions of such grant shall be subject to and comply with such rules as may be prescribed by Section 422 of the Code and any applicable regulations thereunder.
This Plan shall be administered and interpreted so that all Incentive Stock Options granted to Employees under this Plan will qualify as Incentive Stock Options under Section 422 of the Code. If any provision of this Plan should be held invalid for the granting of Incentive Stock Options or illegal for any reason, such determination shall not affect the remaining provisions hereof, and this Plan shall be construed and enforced as if such provision had never been included in this Plan.
If for any reason an Option intended to be an Incentive Stock Option (or any portion thereof) shall not qualify as an Incentive Stock Option, then, to the extent of such nonqualification, such Option or portion thereof shall be regarded as a Nonqualified Stock Option appropriately granted under this Plan. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date such stock certificate is issued, except as expressly provided in Section 7 hereof.
|
b.
|
Exercise Price
. The exercise price (“
Exercise Price
”) per share of Common Stock for each Option shall not be less than 100% of the Fair Market Value of such share determined as of the Date of Grant;
provided, however
, that in the case of an Incentive Stock Option granted to an employee who, at the time of the grant of such Option, owns shares representing more than 10% of the voting power of all classes of shares of the Company or any Affiliate, the Exercise Price per share shall not be less than 110% of the Fair Market Value per share on the Date of Grant;
and, provided further,
that notwithstanding any provision herein to the contrary, the Exercise Price shall not be less than the par value per share of Common Stock.
|
c.
|
Vesting and Expiration
. Options shall vest and become exercisable in such manner and on such date or dates determined by the Committee and as set forth in the applicable Award agreement, and shall expire after such period, not to exceed ten (10) years from the Date of Grant, as may be determined by the Committee (the “
Option Period
”);
provided
,
however
, that the Option Period shall not exceed five (5) years from the Date of Grant in the case of an Incentive Stock Option granted to a Participant who on the Date of Grant owns shares representing more than 10% of the voting power of all classes of shares of the Company or any Affiliate;
and,
provided
,
further
, that notwithstanding any vesting dates set by the Committee, the Committee may, in its sole discretion, accelerate the exercisability of any Option, which acceleration shall not affect the terms and conditions of such Option other than with respect to exercisability. Unless otherwise provided by the Committee in an Award agreement:
|
d.
|
Method of Exercise and Form of Payment
. No Common Stock shall be delivered pursuant to any exercise of an Option until payment in full of the Exercise Price therefor is received by the Company and the Participant has paid to the Company an amount equal to any federal, state, local and non-U.S. income and employment taxes required to be withheld. Options that have become exercisable may be exercised by delivery of written or electronic notice of exercise to the Company in accordance with the terms of the Award agreement accompanied by payment of the Exercise Price. The Exercise Price shall be payable (i) in cash, check (subject to collection), cash equivalent and/or vested shares of Common Stock valued at the Closing Price on the date the Option is exercised (including, pursuant to procedures approved by the Committee, by means of attestation of ownership of a sufficient number of shares of Common Stock in lieu of actual delivery of such shares to the Company);
provided
, however,
that such shares of Common Stock are not subject to any pledge or other security interest and are Mature Shares and; (ii) by such other method as the Committee may permit in accordance with applicable law, in its sole discretion, including without limitation: (A) in other property having a fair market value (as determined by the Committee in its discretion) on the date of exercise equal to the Exercise Price or (B) if there is a public market for Common Stock at such time, by means of a broker-assisted “cashless exercise” pursuant to which the Company is delivered a copy of irrevocable instructions to a stockbroker to sell shares of Common Stock otherwise deliverable upon the exercise of the Option and to deliver promptly to the Company an amount equal to the Exercise Price or (C) by a “net exercise” method whereby the Company withholds from the delivery of shares of Common Stock for which the Option was exercised that number of shares of Common Stock having a Closing Price equal to the aggregate Exercise Price for the shares of Common Stock for which the Option was exercised. Any fractional shares of Common Stock shall be settled in cash.
|
e.
|
Notification upon Disqualifying Disposition of an Incentive Stock Option
. Each Participant awarded an Incentive Stock Option under this Plan shall notify the Company in writing immediately after the date he makes a disqualifying disposition of any shares of Common Stock acquired pursuant to the exercise of such Incentive Stock Option. A disqualifying disposition is any disposition (including, without limitation, any sale) of such shares of Common Stock before the later of (A) two years after the Date of Grant of the Incentive Stock Option or (B) one year after the date of exercise of the Incentive Stock Option. The Company or a third party under contract with the Company may, if determined by the Committee and in accordance with procedures established by the Committee, retain possession of any shares of Common Stock acquired pursuant to the exercise of an Incentive Stock Option as agent for the applicable Participant until the end of the period described in the preceding sentence.
|
f.
|
Compliance With Laws, etc
. Notwithstanding the foregoing, in no event shall a Participant be permitted to exercise an Option in a manner that the Committee determines would violate the Sarbanes-Oxley Act of 2002, if applicable, or any other applicable law or the applicable rules and regulations of the Securities and Exchange Commission or the applicable rules and regulations of any securities exchange or inter-dealer quotation system on which the securities of the Company are listed or traded.
|
a.
|
Generally
. Each SAR granted under this Plan shall be evidenced by an Award agreement (whether in paper or electronic medium (including email or the posting on a web site maintained by the Company or a third party under contract with the Company)). Each SAR so granted shall be subject to the conditions set forth in this Section 8, and to such other conditions not inconsistent with this Plan as may be reflected in the applicable Award agreement. Any Option granted under this Plan may include tandem SARs. The Committee also may award SARs to Eligible Persons independent of any Option.
The Committee may establish a maximum appreciation value payable for SARs.
|
b.
|
Vesting and Expiration
. A SAR granted in connection with an Option shall become exercisable and shall expire according to the same vesting schedule and expiration provisions as the corresponding Option. A SAR granted independent of an Option shall vest and become exercisable and shall expire in such manner and on such date or dates determined by the Committee and shall expire after such period, not to exceed ten (10) years, as may be determined by the Committee (the “
SAR Period
”);
provided, however
, that notwithstanding any vesting dates set by the Committee, the Committee may, in its sole discretion, accelerate the exercisability of any SAR, which acceleration shall not affect the terms and conditions of such SAR other than with respect to exercisability. Unless otherwise provided by the Committee in an Award agreement:
|
c.
|
Method of Exercise
. SARs that have become exercisable may be exercised by delivery of written or electronic notice of exercise to the Company in accordance with the terms of the Award, specifying the number of SARs to be exercised and the date on which such SARs were awarded. Notwithstanding the foregoing, if on the last day of the Option Period (or in the case of a SAR independent of an option, the SAR Period), the Closing Price exceeds the Strike Price, the Participant has not exercised the SAR or the corresponding Option (if applicable), and neither the SAR nor the corresponding Option (if applicable) has expired, such SAR shall be deemed to have been exercised by the Participant on such last day and the Company shall make the appropriate payment therefor.
|
d.
|
Payment
. Upon the exercise of a SAR, the Company shall pay to the Participant an amount equal to the number of shares of Common Stock subject to the SAR that are being exercised multiplied by the excess, if any, of the Closing Price of one share of Common Stock on the exercise date over the Strike Price, less an amount equal to any federal, state, local and non-U.S. income and employment taxes required to be withheld. The Company shall pay such amount in cash, in shares of Common Stock valued at Fair Market Value, or any combination thereof, as determined by the Committee.
|
a.
|
Generally
. Each grant of Restricted Stock Awards shall be evidenced by an Award agreement (whether in paper or electronic medium (including email or the posting on a web site maintained by the Company or a third party under contract with the Company)). Each such grant shall be subject to the conditions set forth in this Section 9, and to such other conditions not inconsistent with this Plan as may be reflected in the applicable Award agreement.
|
b.
|
Restricted Accounts
;
Escrow or Similar Arrangement
. Upon a grant of Restricted Stock Award, a book entry in a restricted account shall be established in the Participant’s name at the Company’s transfer agent and, if the Committee determines that the Restricted Stock Award shall be held by the Company or in escrow rather than held in such restricted account pending the release of the applicable restrictions, the Committee may additionally require the Participant to execute and deliver to the Company (i) an escrow agreement satisfactory to the Committee, if applicable, and (ii) the appropriate share power (endorsed in blank) with respect to the Restricted Stock Award covered by such agreement. If a Participant shall fail to execute an agreement evidencing a Restricted Stock Award and, if applicable, an escrow agreement and blank share power within the amount of time specified by the Committee, the Award shall be null and void
ab initio
. Subject to the restrictions set forth in this Section 9 and/or as provided in the applicable Award agreement, the Participant generally shall have the rights and privileges of a stockholder as to such Restricted Stock Award, including without limitation the right to vote such Restricted Stock Award and the right to receive dividends, if applicable, upon vesting of such Restricted Stock Award. To the extent shares of a Restricted Stock Award are forfeited, any stock certificates issued to the Participant evidencing such shares shall be returned to the Company, and all rights of the Participant to such shares and as a stockholder with respect thereto shall terminate without further obligation on the part of the Company.
|
c.
|
Vesting; Acceleration of Lapse of Restrictions
. Unless otherwise provided by the Committee in an Award agreement: (i) the Restricted Period shall lapse with respect to 100% of the Restricted Stock Award on the third (3
rd
) anniversary of the Date of Grant; and (ii) the unvested portion of Restricted Stock Award shall terminate and be forfeited upon termination of employment or service of the Participant granted the applicable Award.
|
d.
|
Delivery of Restricted Stock Award
. Upon the expiration of the Restricted Period with respect to any Restricted Stock Award, the restrictions set forth herein or in the applicable Award agreement shall be of no further force or effect with respect to such shares, except as set forth in the applicable Award agreement. If an escrow arrangement is used, upon such expiration, the Company shall deliver to the Participant, or his beneficiary, without charge, the stock certificate evidencing the shares of Restricted Stock that have not then been forfeited and with respect to which the Restricted Period has expired (rounded down to the nearest full share). Dividends, if any, that may have been withheld by the Committee and attributable to any particular share of Restricted Stock shall be distributed to the Participant in cash or, at the sole discretion of the Committee, in shares of Common Stock having a Closing Price equal to the amount of such dividends, upon the release of restrictions on such share and, if such share is forfeited, the Participant shall have no right to such dividends (except as otherwise set forth in the applicable Award agreement).
|
e.
|
Certificate and Restrictive Legend
. A stock certificate will be issued in connection with each Restricted Stock Award. Such certificate will be registered in the name of the grantee receiving the award, and will bear the following legend and/or any other legend required by this Plan, the Award agreement, any stockholders agreement, if any, or by applicable law:
|
f.
|
Restrictions and Conditions
. The Restricted Stock Awards awarded pursuant to this Section 9 will be subject to the following restrictions and conditions:
|
a.
|
adjusting any or all of (A) the number of shares of Common Stock or other securities of the Company (or number and kind of other securities or other property) that may be delivered in respect of Awards or with respect to which Awards may be granted under this Plan (including, without limitation, adjusting any or all of the limitations under Section 5 of this Plan) and (B) the terms of any outstanding Award, including, without limitation, (1) the number of shares of Common Stock or other securities of the Company (or number and kind of other securities or other property) subject to outstanding Awards or to which outstanding Awards relate, (2) the Exercise Price or Strike Price with respect to any Award or (3) any applicable performance measures;
|
b.
|
providing for a substitution or assumption of Awards, accelerating the exercisability of, lapse of restrictions on, or termination of, Awards or providing for a period of time for exercise prior to the occurrence of such event; and
|
|
c.
|
subject to the requirements of Section 409A of the Code, canceling any one or more outstanding Awards and causing to be paid to the holders thereof, in cash, Common Stock, other securities or other property, or any combination thereof, the value of such Awards, if any, as determined by the Committee (which if applicable may be based upon the price per share of Common Stock received or to be received by other stockholders of the Company in such event), including without limitation, in the case of an outstanding Option or SAR, a cash payment in an amount equal to the excess, if any, of the fair market value (as of a date specified by the Committee) of the Common Stock subject to such Option or SAR over the aggregate Exercise Price or Strike Price of such Option or SAR, respectively (it being understood that, in such event, any Option or SAR having a per share Exercise Price or Strike Price equal to, or in excess of, the fair market value of a share of Common Stock subject thereto may be canceled and terminated without any payment or consideration therefor);
provided
,
however
,
that in the case of any “equity restructuring” (within the meaning of the Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123 (revised 2004) or ASC Topic 718, or any successor thereto), the Committee shall make an equitable or proportionate adjustment to outstanding Awards to reflect such equity restructuring. Any adjustment in Incentive Stock Options under this Section 10 (other than any cancellation of Incentive Stock Options) shall be made only to the extent not constituting a “modification” within the meaning of Section 424(h)(3) of the Code, and any adjustments under this Section 10 shall be made in a manner that does not adversely affect the exemption provided pursuant to Rule 16b-3 under the Exchange Act. The Company shall give each Participant notice of an adjustment hereunder and, upon notice, such adjustment shall be conclusive and binding for all purposes.
|
a.
|
all of the then outstanding Options shall vest upon such Change in Control;
|
b.
|
all of the then outstanding SARs
shall
immediately vest and become immediately exercisable as of the date immediately prior to the date of the Change in Control, unless otherwise specified in the Award agreement; and
|
c.
|
the Restricted Period
shall
expire as of the date immediately prior to the date of the Change in Control, unless otherwise specified in the Award agreement.
|
a.
|
Amendment and Termination of this Plan
. The Board may amend, alter, suspend, discontinue, or terminate this Plan or any portion thereof at any time;
provided
, that shareholders must approve material amendments to the Plan (by a majority vote of those shareholders voting on the matter, assuming a quorum is present) including, but not limited to, (1) any material increase in the number of shares to be issued under the Plan (other than to reflect a reorganization, stock split, merger, spinoff or similar transaction); (2) any material increase in benefits to Participants, including any material change to: (i) permit a repricing (or decrease in exercise price) of all of the outstanding options or (ii) extend the duration of the Plan; (3) any material expansion of the class of Eligible Persons; and (4) any expansion in the types of options or awards provided under the Plan;
and,
provided
,
further
that no such amendment, alteration, suspension, discontinuation or termination shall be made without stockholder approval if such approval is necessary to comply with any tax or regulatory requirement applicable to this Plan (including, without limitation, as necessary to comply with any rules or requirements of any securities exchange or inter-dealer quotation system on which the Common Stock may be listed or quoted or to prevent the Company from being denied a tax deduction under Section 162(m) of the Code);
and,
provided
,
further
, that any such amendment, alteration, suspension, discontinuance or termination that would materially and adversely affect the rights of any Participant or any holder or beneficiary of any Award theretofore granted shall not to that extent be effective without the prior written consent of the affected Participant, holder or beneficiary.
|
b.
|
Amendment of Award Agreements
.
The Committee may, to the extent consistent with the terms of any applicable Award agreement, waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, any Award theretofore granted or the associated Award agreement, prospectively or retroactively;
provided
,
however
that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the rights of any Participant with respect to any Award theretofore granted shall not to that extent be effective without the consent of the affected Participant;
and,
provided
,
f
urther
, that without stockholder approval, except as otherwise permitted under Section 10 of this Plan, (i) no amendment or modification may reduce the Exercise Price of any Option or the Strike Price of any SAR, (ii) the Committee may not cancel any outstanding Option or SAR and replace it with a new Option or SAR, another Award or cash or take any action that would have the effect of treating such Award as a new Award for tax or accounting purposes and (iii) the Committee may not take any other action that is considered a “repricing” for purposes of the stockholder approval rules of the applicable securities exchange or inter-dealer quotation system on which the Common Stock is listed or quoted.
|
a.
|
Award Agreements
. Each Award under this Plan shall be evidenced by an Award agreement, which shall be delivered to the Participant (whether in paper or electronic medium (including email or the posting on a web site maintained by the Company or a third party under contract with the Company)) and shall specify the terms and conditions of the Award and any rules applicable thereto, including without limitation, the effect on such Award of the death, Disability or termination of employment or service of a Participant, or of such other events as may be determined by the Committee. The Company’s failure to specify any term of any Award in any particular Award agreement shall not invalidate such term, provided such terms was duly adopted by the Board or the Committee.
|
b.
|
Nontransferability; Trading Restrictions
. Each Award shall be exercisable only by a Participant during the Participant’s lifetime, or, if permissible under applicable law, by the Participant’s legal guardian or representative. No Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant other than by will or by the laws of descent and distribution and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or an Affiliate; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.
|
c.
|
Notice
. Time shall be of the essence with respect to all time periods specified for the giving of notices to the Company hereunder, as well as all time periods for the expiration and termination of Options, SARs and Restricted Stock Awards in accordance with Sections 7, 8 and 9 hereof (or as otherwise set forth in an Award agreement).
|
d.
|
Tax Withholding
.
|
e.
|
No Claim to Awards; No Rights to Continued Employment; Waiver
. No employee of the Company or an Affiliate, or other person, shall have any claim or right to be granted an Award under this Plan or, having been selected for the grant of an Award, to be selected for a grant of any other Award. There is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards. The terms and conditions of Awards and the Committee’s determinations and interpretations with respect thereto need not be the same with respect to each Participant and may be made selectively among Participants, whether or not such Participants are similarly situated. Neither this Plan nor any action taken hereunder shall be construed as giving any Participant any right to be retained in the employ or service of the Company or an Affiliate, nor shall it be construed as giving any Participant any rights to continued service on the Board. The Company or any of its Affiliates may at any time dismiss a Participant from employment or discontinue any consulting relationship, free from any liability or any claim under this Plan, unless otherwise expressly provided in this Plan or any Award agreement. By accepting an Award under this Plan, a Participant shall thereby be deemed to have waived any claim to continued exercise or vesting of an Award or to damages or severance entitlement related to non-continuation of the Award beyond the period provided under this Plan or any Award agreement, notwithstanding any provision to the contrary in any written employment contract or other agreement between the Company and its Affiliates and the Participant, whether any such agreement is executed before, on or after the Date of Grant.
|
f.
|
International Participants
. With respect to Participants who reside or work outside of the United States of America and who are not (and who are not expected to be) “covered employees” within the meaning of Section 162(m) of the Code, the Committee may in its sole discretion amend the terms of this Plan or outstanding Awards (or establish a sub-plan) with respect to such Participants in order to conform such terms with the requirements of local law or to obtain more favorable tax or other treatment for a Participant, the Company or its Affiliates.
|
g.
|
Designation and Change of Beneficiary
. Each Participant may file with the Committee a written designation of one or more persons as the beneficiary(ies) who shall be entitled to receive the amounts payable with respect to an Award, if any, due under this Plan upon his or her death. A Participant may, from time to time, revoke or change his or her beneficiary designation without the consent of any prior beneficiary by filing a new designation with the Committee. The last such designation filed with the Committee shall be controlling;
provided
,
however
, that no designation, or change or revocation thereof, shall be effective unless received by the Committee prior to the Participant’s death, and in no event shall it be effective as of a date prior to such receipt. If no beneficiary designation is filed by a Participant, the beneficiary shall be deemed to be his or her spouse or, if the Participant is unmarried at the time of death, his or her estate. Upon the occurrence of a Participant’s divorce (as evidenced by a final order or decree of divorce), any spousal designation previously given by such Participant shall automatically terminate.
|
h.
|
Termination of Employment/Service
. Unless determined otherwise by the Committee at any point following such event: (i) neither a temporary absence from employment or service due to illness, vacation or leave of absence nor a transfer from employment or service with the Company to employment or service with an Affiliate (or vice-versa) shall be considered a termination of employment or service with the Company or an Affiliate; and (ii) if a Participant’s employment with the Company and its Affiliates terminates, but such Participant continues to provide services to the Company and its Affiliates in a non-employee capacity (or vice-versa), such change in status shall not be considered a termination of employment with the Company or an Affiliate.
|
i.
|
No Rights as a Stockholder
. Except as otherwise specifically provided in this Plan or any Award agreement, no person shall be entitled to the privileges of ownership in respect of shares of Common Stock that are subject to Awards hereunder until such shares have been issued or delivered to that person.
|
j.
|
Government and Other Regulations
.
|
k.
|
Payments to Persons Other Than Participants
. If the Committee shall find that any person to whom any amount is payable under this Plan is unable to care for his affairs because of illness or accident, or is a minor, or has died, then any payment due to such person or his estate (unless a prior claim therefor has been made by a duly appointed legal representative) may, if the Committee so directs the Company, be paid to his spouse, child, relative, an institution maintaining or having custody of such person, or any other person deemed by the Committee to be a proper recipient on behalf of such person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Committee and the Company therefor.
|
l.
|
Nonexclusivity of this Plan
. Neither the adoption of this Plan by the Board nor the submission of this Plan to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options or other equity-based awards otherwise than under this Plan, and such arrangements may be either applicable generally or only in specific cases.
|
m.
|
No Trust or Fund Created
. Neither this Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate, on the one hand, and a Participant or other Person or entity, on the other hand. No provision of this Plan or any Award shall require the Company, for the purpose of satisfying any obligations under this Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or otherwise to segregate any assets, nor shall the Company maintain separate bank accounts, books, records or other evidence of the existence of a segregated or separately maintained or administered fund for such purposes. Participants shall have no rights under this Plan other than as general unsecured creditors of the Company, except that insofar as they may have become entitled to payment of additional compensation by performance of services, they shall have the same rights as other employees under general law.
|
n.
|
Reliance on Reports
. Each member of the Committee and each member of the Board shall be fully justified in acting or failing to act, as the case may be, and shall not be liable for having so acted or failed to act in good faith, in reliance upon any report made by the independent public accountant of the Company and its Affiliates and/or any other information furnished in connection with this Plan by any agent of the Company or the Committee or the Board, other than himself.
|
o.
|
Relationship to Other Benefits
. No payment under this Plan shall be taken into account in determining any benefits under any pension, retirement, profit sharing, group insurance or other benefit plan of the Company except as otherwise specifically provided in such other plan.
|
p.
|
Governing Law
. The Plan shall be governed by and construed in accordance with the internal laws of the State of Arizona, without giving effect to the conflict of laws provisions, provided that if the Company changes its State of domicile, the Plan shall be governed by and construed in accordance with the internal laws of that State.
|
q.
|
Severability
. If any provision of this Plan or any Award or Award agreement is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any person or entity or Award, or would disqualify this Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws in the manner that most closely reflects the original intent of the Award or the Plan, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of this Plan or the Award, such provision shall be construed or deemed stricken as to such jurisdiction, person or entity or Award and the remainder of this Plan and any such Award shall remain in full force and effect.
|
r.
|
Obligations Binding on Successors
. The obligations of the Company under this Plan shall be binding upon any successor corporation or organization resulting from the merger, amalgamation, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to substantially all of the assets and business of the Company.
|
s.
|
Expenses; Gender; Titles and Headings
. The expenses of administering this Plan shall be borne by the Company and its Affiliates. Masculine pronouns and other words of masculine gender shall refer to both men and women. The titles and headings of the sections in this Plan are for convenience of reference only, and in the event of any conflict, the text of this Plan, rather than such titles or headings shall control.
|
t.
|
Other Agreements
. Notwithstanding the above, the Committee may require, as a condition to the grant of and/or the receipt of Common Stock under an Award, that the Participant execute lock-up, stockholder or other agreements, as it may determine in its sole and absolute discretion.
|
u.
|
Section 409A
.
The Plan and all Awards granted hereunder are intended to comply with, or otherwise be exempt from, the requirements of Section 409A of the Code. The Plan and all Awards granted under this Plan shall be administered, interpreted, and construed in a manner consistent with Section 409A of the Code to the extent necessary to avoid the imposition of additional taxes under Section 409A(a)(1)(B) of the Code. Notwithstanding anything in this Plan to the contrary, in no event shall the Committee exercise its discretion to accelerate the payment or settlement of an Award where such payment or settlement constitutes deferred compensation within the meaning of Section 409A of the Code unless, and solely to the extent that, such accelerated payment or settlement is permissible under Section 1.409A-3(j)(4) of the Treasury Regulations. If a Participant is a “specified employee” (within the meaning of Section 1.409A-1(i) of the Treasury Regulations) at any time during the twelve (12)-month period ending on the date of his termination of employment, and any Award hereunder subject to the requirements of Section 409A of the Code is to be satisfied on account of the Participant’s termination of employment, satisfaction of such Award shall be suspended until the date that is six (6) months after the date of such termination of employment.
|
v.
|
Effect of Disqualifying Disposition
.
If the transfer of a share of stock to an individual pursuant to his exercise of an option would otherwise meet the requirements of §422 (a) or §423 (a) of the Code except that there is a failure to meet any of the holding period requirements of §422 (a)(1) or §423 (a)(1) of the Code, then any increase in the income of such individual or deduction from the income of his employer corporation for the taxable year in which such exercise occurred attributable to such disposition, shall be treated as an increase in income or a deduction from income in the taxable year of such individual or of such employer corporation in which such disposition occurred. No amount shall be required to be deducted and withheld under chapter 24 of the Code with respect to any increase in income attributable to a disposition described in the preceding sentence.
|
w.
|
Payments
.
Participants shall be required to pay, to the extent required by applicable law, any amounts required to receive shares of Common Stock under any Award made under this Plan.
|
1.
|
I have reviewed this annual report on Form 10-K of Cellular Biomedicine Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15-d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 3, 2013
|
By:
|
/s/ Wen Tao (Steve) Liu | |
Wen Tao (Steve) Liu | |||
Chief Executive Officer (Principal Executive Officer)
|
|||
1.
|
I have reviewed this annual report on Form 10-K of Cellular Biomedicine Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15-d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 3, 2013
|
By:
|
/s/ Andrew Chan | |
Andrew Chan | |||
Chief Financial Officer (Principal Financial and Accounting Officer)
|
|||
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the date and for the periods indicated.
|
Date: April 3, 2013
|
By:
|
/s/ Wen Tao (Steve) Liu | |
Wen Tao (Steve) Liu | |||
Chief Executive Officer (Principal Executive Officer)
|
|||
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the date and for the periods indicated.
|
Date: April 3, 2013
|
By:
|
/s/ Andrew Chan | |
Andrew Chan | |||
Chief Financial Officer (Principal Financial and Accounting Officer)
|
|||