UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14C INFORMATION
Information
Statement Pursuant to Section 14(c)
of
the Securities Exchange Act of 1934
Check
the appropriate box:
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Preliminary
Information Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule 14c-5(d)(2))
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Definitive
Information Statement
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YEW
BIO-PHARM GROUP, INC.
(Name
of Registrant as Specified In Its Charter)
Payment
of Filing Fee (Check the appropriate box):
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No
fee required.
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Fee
computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
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Title
of each class of securities to which transaction applies:
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2)
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Aggregate
number of securities to which transaction applies:
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3)
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Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4)
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Proposed
maximum aggregate value of transaction:
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Fee
paid previously with preliminary materials.
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Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its
filing.
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1)
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Amount
Previously Paid:
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2)
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Form,
Schedule or Registration Statement No.:
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YEW
BIO-PHARM GROUP, INC.
9460
Telstar Avenue, Suite 6
El
Monte, California 91731
To:
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The
Holders of the Common Stock of Yew Bio-Pharm Group, Inc.
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Re:
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Action
by Written Consent in Lieu of Annual Meeting of Stockholders
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This
Information Statement is furnished by the Board of Directors of Yew Bio-Pharm Group, Inc., a Nevada corporation (the “Company”,
or “YBP”, or “We”), to holders of record of the Company’s common stock, $0.001 par value per share,
at the close of business on November 15, 2021 (the “Record Date”). The purpose of this Information Statement
is to inform the Company’s stockholders of certain actions taken by the written consent of the holders of a majority of the Company’s
voting stock, dated as of November 15, 2021, in lieu of an Annual Meeting of stockholders.
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1.
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To
elect five (5) directors to serve until the next Annual Meeting of Shareholders and thereafter until their successors are elected
and qualified; and
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2.
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To
grant the Board of Directors the discretionary authority to amend the Company’s articles of incorporation to affect a reverse
stock split of the Company’s common stock (“Common Stock”) in a range of not less than five (5) shares and not
more than ten (10) shares, into one share of Common Stock at any time prior to September 30, 2022 (the “Reverse Stock Split
Proposal”); and
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3.
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A
proposal to ratify the appointment of Simon & Edward, LLP as the Company’s independent registered public accounting firm
for the fiscal year ending December 31, 2021.
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The
foregoing actions were approved on November 15, 2021 by our Board of Directors. In addition, on November 15, 2021 the holder
of 52.1% of the Company’s outstanding voting securities, as of the Record Date, approved the foregoing actions. The
number of shares voting for the proposals was sufficient for approval.
Section
78.320 of the Nevada Revised Statutes (the “NRS”) provides in part that any action required or permitted to be taken at a
meeting of the stockholders may be taken without a meeting if, before or after the action, a written consent thereto is signed by stockholders
holding at least a majority of the voting power, except that if a different proportion of voting power is required for such an action
at a meeting, then that proportion of written consents is required.
In
order to eliminate the costs and management time involved in obtaining proxies and in order to effect the above actions as early as possible
in order to accomplish the purposes of the Company as herein described, the Board consented to the utilization of, and did in fact obtain,
the written consent of the Consenting Stockholders who collectively own shares representing a majority of our Common Stock.
The
above actions taken by the Company’s stockholders will become effective on or about December__, 2021 and are more fully described
in the Information Statement accompanying this Notice. Under the rules of the Securities and Exchange Commission, the above actions cannot
become effective until at least 20 days after the accompanying Information Statement has been distributed to the stockholders of the
Company.
The
entire cost of furnishing this Information Statement will be borne by the Company. The Company may request brokerage houses, nominees,
custodians, fiduciaries and other like parties to forward this Information Statement to the beneficial owners of the Common Stock held
of record by them and will reimburse such persons for their reasonable charges and expenses in connection therewith.
WE
ARE NOT ASKING YOU FOR A PROXY, AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
No
action is required by you. The accompanying Information Statement is furnished only to inform our stockholders of the actions described
above before they take place in accordance with Rule 14c-2 of the Securities Exchange Act of 1934. This Information Statement will be
first distributed to you on or about November __, 2021.
If
you have any questions on the enclosed Information Statement you may contact us directly. We thank you for your continued interest in
our Company.
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By
Order of the Board of Directors
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/s/
Guifang Qi
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Guifang
Qi, Chief Executive Officer
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November
__, 2021
El
Monte, CA
WE
ARE NOT ASKING YOU FOR A PROXY
AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
INFORMATION
STATEMENT
INFORMATION
STATEMENT PURSUANT TO SECTION 14C OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
THIS
IS NOT A NOTICE OF AN ANNUAL MEETING OF STOCKHOLDERS AND NO STOCKHOLDER MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN.
THE ACTIONS DESCRIBED IN THIS INFORMATION STATEMENT HAVE BEEN APPROVED BY HOLDERS OF A MAJORITY OF OUR COMMON STOCK. WE ARE NOT ASKING
YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. THERE ARE NO DISSENTERS’ RIGHTS WITH RESPECT TO THE ACTIONS DESCRIBED
IN THIS INFORMATION STATEMENT.
INTRODUCTION
This
Information Statement is being mailed or otherwise furnished to the holders of common stock, $0.001 par value per share (the “Common
Stock”) of Yew Bio-Pharm Group, Inc., a Nevada corporation (“We” or the “Company”) by the Board of Directors
to notify them about a certain action that the holders of a majority of the Company’s outstanding voting stock have taken by written
consent, in lieu of an Annual Meeting of the stockholders. The action was taken on November 15, 2021.
Copies
of this Information Statement are first being sent on or about November __, 2021 to the holders of record on November 15, 2021
of the outstanding shares of the Company’s Common Stock.
General
Information
This
Information Statement and Notice of Stockholder Action by Written Consent is being furnished by us to our stockholders of record as of
November 15, 2021, to inform our stockholders that the Board of Directors of the Company (the “Board”) and
the holders of approximately 52.1% of our outstanding voting stock as of such date (the “Voting Stockholders”), have taken
and approved the following actions (the “Corporate Action”):
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1.
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To
elect seven (5) directors to serve until the next Annual Meeting of Shareholders and thereafter until their successors are elected
and qualified; and
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2.
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To
grant the Board of Directors the discretionary authority to amend the Company’s articles of incorporation to affect a reverse
stock split of the Company’s common stock (“Common Stock”) in a range of not less than five (5) shares and not
more than ten (10) shares, into one share of Common Stock at any time prior to September 30, 2022 (the “Reverse Stock Split
Proposal”); and
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3.
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A
proposal to ratify the appointment of Simon & Edward, LLP as the Company’s independent registered public accounting firm
for the fiscal year ending December 31, 2021.
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The
Company may ask brokers and other custodians, nominees, and fiduciaries to forward this Information Statement to the beneficial owners
of the common stock held of record by such persons and will reimburse such persons for out-of-pocket expenses incurred in forwarding
such material.
Dissenters’
Right of Appraisal
No
dissenters’ or appraisal rights under the Nevada Revised Statutes are afforded to the Company’s stockholders as a result
of the approval of the actions set forth above.
Vote
Required
The
vote, which was required to approve the above actions, was the affirmative vote of the holders of a majority of the Company’s voting
stock. Each holder of Common Stock is entitled to one (1) vote for each share of Common Stock held. The date used for purposes of determining
the number of outstanding shares of voting stock of the Company entitled to vote is November 15, 2021. The Record Date for determining
those shareholders of the Company entitled to receive this Information Statement is the close of business on November 15, 2021.
As of the Record Date, the Company had outstanding 51,700,000 shares of Common Stock. Holders of the Common Stock have no preemptive
rights. All outstanding shares are fully paid and nonassessable. The transfer agent for the Common Stock is West Coast Stock Transfer,
Inc., 721 N. Vulcan Ave. 1st FL, Encinitas, CA 92024. Telephone: 619-664-4780.
Vote
Obtained - Section 78.320 of the Nevada Revised Statutes
Section
78.320 of the Nevada Revised Statutes Law provides that any action required to be taken at any annual or special meeting of stockholders
of a corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting,
without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock, having not less than the minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and voted.
To
eliminate the costs and management time involved in soliciting and obtaining proxies to approve the actions and to effectuate the Actions
as early as possible to accomplish the purposes of the Company as hereafter described, the Board of Directors of the Company voted to
utilize, and did in fact obtain, the written consent of the holders of a majority of the voting power of the Company. The consenting
shareholders and their respective approximate ownership percentage of the voting stock of the Company, which total in the aggregate 52.1%
of the outstanding voting stock, are as follows: Zhiguo Wang (38.9%), a shareholder, Guifang Qi, our CEO/CFO/director and
the wife of Mr. Wang (4.7%), Yicheng Wang (4.7%), a shareholder, Bo Li, a shareholder (1.9%) and Renchun Wang (1.9%), a shareholder.
As of November 15, 2021, there were 51,700,000 shares outstanding.
This
Information Statement is being distributed pursuant to the requirements of Section 14(c) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) to the Company’s stockholders on the Record Date. The corporate action described herein will be
effective approximately 20 days (the “20-day Period”) after the distributing of this Information Statement. The 20-day Period
is expected to conclude on or about December __, 2021.
The
entire cost of furnishing this Information Statement will be borne by the Company.
ACTION
ONE
ELECTION
OF DIRECTORS
Directors
are normally elected by the shareholders at each annual meeting to hold office until their respective successors are elected and qualified
and need not be shareholders of the Company. Directors may receive compensation for their services as determined by the Board of Directors.
See “Compensation of Directors.” Presently, the Board of Directors consists of five (5) members, namely, Ms. Guifang Qi,
Mr. Xuehai Wu, Mr. Xiefeng Liu, Mr. Yongchun Shi and Mr. Hailong Sun. These current directors of the Board been nominated to be
directors.
Voting
for the election of directors is non-cumulative, which means that a simple majority of the shares voting may elect all of the directors.
Each share of common stock is entitled to one (1) vote and, therefore, has a number of votes equal to the number of authorized directors.
Although
the Company’s management expects that each of the following nominees will be available to serve as a director, in the event that
any of them should become unavailable prior to being appointed, a replacement will be appointed by a majority of the then-existing Board
of Directors. Management has no reason to believe that any of its nominees, if elected, will be unavailable to serve. All nominees are
expected to serve until the next Annual Meeting of Shareholders or until their successors are duly elected and qualified.
Nominees
for Election as Director
The
following table sets forth certain information with respect to persons nominated by the Board of Directors of the Company for election
as Directors of the Company and who will be elected following the 20-day Period after the distribution of the Information Statement:
Name
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Age
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Position(s)
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Guifang
Qi
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59
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Director
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Xuehai
Wu
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47
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Director
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Xiefeng
Liu
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58
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Director
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Yongchun
Shi
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57
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Director
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Hailong
Sun
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40
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Director
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Biographical
Information Regarding Directors
Guifang
Qi has been the Chief Executive Officer, Chief Financial Officer of the Company since July 2021 and a director of the Company
since December 2010. Since 1997, she has also served as Vice General Manager of HDS in charge of purchasing and suppliers. Madame Qi
graduated from Mudanjiang Forestry School, located in Mudanjiang, Heilongjiang Province, where she majored in forestry. Madame Qi is
the wife of the Company’s former President, Mr.Zhiguo Wang.
Xuehai
Wu has been a director of the Company since September 2015. Mr. Wu is the Deputy General Manager of Harbin Yew Science and Technology
Development Co., Ltd., a subsidiary of the Company, since April 2014. From October, 2011 until March 2014, Mr. Wu was the Chairman of
the Board of Heilongjiang Zhilong Pharmaceutical Technology Development Co., Ltd and from June 2007 until September 2011, he was the
Deputy General Manager for Harbin High-Tech White Swan Pharmaceutical Group Co. Mr. Wu graduated with a Bachelor degree from Northeast
Agricultural University (China) where he majored in biological science.
Xiefeng
Liu From September 1978 to July 1981, Mr. Liu was a student at Mudanjiang Forestry School; Silviculture Major. From July 1981
to September 1985 he was a teacher at Mudanjiang Forestry and Technical College 09/1985-07/1988. From July 1997 to July 2000, Mr. Liu
worked as a Director, Lecturer and Senior Lecturer for Mudanjiang Forestry and Technical College. From May 2005 to December 2017, he
was Director of Admission Office at Heilongjiang River Forestry Vocational and Technical College and then from January 1 2018 until the
present he was Director of Research Department at Heilongjiang River Forestry Vocational and Technical College.
Yongchun
Shi was born in Harbin City, Heilongjiang Province. In 1981, he majored in Forestry at Northeast Forestry University and received
his bachelor’s degree in Agronomy. In 1985, he worked as a lecturer at Heilongjiang College of Logging Industry Managerial Personnel
Training. In 2006, he started his postgraduate degree in engineering at Northeast Forestry University while teaching at Heilongjiang
College of Logging Industry Managerial Personnel Training. In 2010, he was promoted to professor at Heilongjiang College of Logging Industry
Managerial Personnel Training. Mr. Shi is currently employed as Head of Resources and Environment Department at Heilongjiang Vocational
Institute of Ecological Engineering and as Secretary General of Heilongjiang Vocational Teaching Steering Committee of Environmental
Protection.
Hailong
Sun Male, born in September 1981. From July 2004, he is the teacher of Heilongjiang Forestry Vocational and Technical College.
Mr. Sun graduated with a bachelor’s degree from Northeast Forestry University (China) where he majored in gardens on 2004, and
obtained his master’s degree from Northeast Forestry University (China) on 2009, where he majored in landscape garden area. Mr.
Sun was granted award by Mudanjiang Science and Technology Bureau for Third Prize in Mudanjiang City Science and Technology Progress
on 2010. He also has a few publications on academic journals from 2009 to 2016 such as “Study on the Application of Ornamental
Grass in the Peony River Area”, “Study on Sustainable Management Technology of Natural Scenic Forest in Eastern Mountain
Area of Liaoning Province” and so forth. Mr. Sun has three patents in China including “Electric Garden Repairer”, “Internet
of Things Intelligent Greenhouse” and “A Tree Pruning”.
Each
of our director’s primary qualification to serve as such involves his or her extensive experience with different aspects of yew
tree technology, cultivation, engineering and/or project management, financial and business acumen.
Family
Relationships
There
are no family relationships between or among the above Directors, executive officers or persons nominated or charged by us to become
directors or executive officers.
Historical
Compensation of Directors
Other
than as set forth herein no compensation has been given to any of the directors, although they may be reimbursed for any pre-approved
out-of-pocket expenses.
Involvement
in Legal Proceedings
To
the best of our knowledge, during the past ten years, none of the following occurred with respect to a present or former director or
executive officer of our Company: (1) any bankruptcy petition filed by or against such person or any business of which such person was
a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction
in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3)
being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of any competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or
banking activities; (4) being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission
(the “Commission”) or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities
law, and the judgment has not been reversed, suspended or vacated; and (5) being the subject of, or a party to, any federal or state
judicial or administrative order, judgment, decree or finding, not subsequently reversed, suspended or vacated, relating to an alleged
violation of any federal or state securities or commodities law or regulation, law or regulation respecting financial institutions or
insurance companies or law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or (6) being
the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization
(as defined in Section 3(a)(26) of the Securities Exchange Act of 1934, as amended), any registered entity (as defined in Section 1(a)(29)
of the Commodity Exchange Act, as amended), or any equivalent exchange, association, entity or organization that has disciplinary authority
over its members or associated persons.
Corporate
Governance
The
business and affairs of our Company are managed under the direction of the Board of Directors.
Term
of Office
Directors
serve until the next annual meeting and until their successors are elected and qualified. Officers are appointed to serve for one year
until the meeting of the Board of Directors following the annual meeting of shareholders and until their successors have been elected
and qualified.
Director
Independence
We
use the definition of “independence” of The NASDAQ Stock Market to make this determination. NASDAQ Listing Rule 5605(a)(2)
provides that an “independent director” is a person other than an officer or employee of our Company or any other individual
having a relationship which, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment in carrying
out the responsibilities of a director. The NASDAQ rules provide that a director cannot be considered independent if:
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the
director is, or at any time during the past three years was, an employee of our Company;
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the
director or a family member of the director accepted any compensation from our Company in excess of $120,000 during any period of
12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including,
among other things, compensation for board or board committee service);
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a
family member of the director is, or at any time during the past three years was, an executive officer of our Company;
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the
director or a family member of the director is a partner in, controlling shareholder of, or an executive officer of an entity to
which our Company made, or from which our Company received, payments in the current or any of the past three fiscal years that exceed
5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions);
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the
director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three
years, any of the executive officers of our Company served on the compensation committee of such other entity; or
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the
director or a family member of the director is a current partner of our Company’s outside auditor, or at any time during the
past three years was a partner or employee of our Company’s outside auditor, and who worked on our Company’s audit.
Our
Board of Directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly.
Based on this review, our Board of Directors has determined that Xiefeng Liu, Yongchun Shi and Hailong Sun are “independent
directors” as defined in the NASDAQ Listing Rules and Rule 10A-3 promulgated under the Exchange Act. As such, all three
independent directors serve on all three of our standing Board Committees, with Mr. Xiefeng Liu and Mr. Hailong Sun, members
of the Audit Committee, Mr. Yongchun Shi and Mr. Xiefeng Liu, members of the Compensation Committee and Mr. Hailong Sun and Mr. Yongchun
Shi, members of the Nominating and Corporate Governance Committee.
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Board
Committees
Our
Board of Directors has an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee, each comprised
entirely of independent directors.
Audit
Committee
Our
Audit Committee is comprised of two individuals, each of whom is an independent director and we are still seeking for one more candidate
to join our Audit Committee at the point, who will be considered and qualified for an “audit committee financial expert,”
as defined in Item 407(d)(5)(ii) of Regulation S-K.
Our
Audit Committee oversees our corporate accounting, financial reporting practices and the audits of financial statements. For this purpose,
the Audit Committee does have a charter (which is reviewed annually) and perform several functions. The Audit Committee performs the
following:
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evaluate
the independence and performance of, and assess the qualifications of, our independent auditor and engage such independent auditor;
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approve
the plan and fees for the annual audit, quarterly reviews, tax and other audit-related services and approve in advance any non-audit
service to be provided by our independent auditor;
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monitor
the independence of our independent auditor and the rotation of partners of the independent auditor on our engagement team as required
by law;
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review
the financial statements to be included in our future Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q and review with
management and our independent auditor the results of the annual audit and reviews of our quarterly financial statements; and
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oversee
all aspects our systems of internal accounting control and corporate governance functions on behalf of the Board of Directors.
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Compensation
Committee
Our
Compensation Committee is comprised of two individuals, two of the members are independent directors. Mr. Yongchun Shi is appointed
as the Chair of the Compensation Committee.
The
Compensation Committee does review or recommend the compensation arrangements for our management and employees and also assist our Board
of Directors in reviewing and approving matters such as company benefit and insurance plans, including monitoring the performance thereof.
The Compensation Committee has a charter (which is reviewed annually) and perform several functions.
The
Compensation Committee does have the authority to directly engage, at our expense, any compensation consultants or other advisers as
it deems necessary to carry out its responsibilities in determining the amount and form of employee, executive and director compensation.
Nominating
and Corporate Governance Committee
Our
Nominating and Corporate Governance Committee is comprised of two individuals, each of whom is an independent director. Mr. Hailong
Sun is appointed as the Chair of the Nominating and Corporate Governance Committee.
The
Nominating and Corporate Governance Committee is charged with the responsibility of reviewing our corporate governance policies and with
proposing potential director nominees to the Board of Directors for consideration. This committee has the authority to oversee the hiring
of potential executive positions in our Company. The Nominating and Corporate Governance Committee has a charter (which will be reviewed
annually) and performs several functions.
Code
of Ethics
We
have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal
executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.
Indemnification
of Officers and Directors
Chapter
78 of the Nevada Revised Statutes (NRS) provides that a corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he is not
liable pursuant to NRS Section 78.138 or acted in good faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. NRS Chapter 78 further provides that a corporation similarly may indemnify any such person serving in any such capacity
who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of
the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of
the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred
in connection with the defense or settlement of such action or suit if he is not liable pursuant to NRS Section 78.138 or acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the court or other court of competent jurisdiction in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in view of all of the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses which the court or other court of competent jurisdiction shall deem
proper.
Our
bylaws provide that we may indemnify our officers, directors, employees, agents and any other persons to the maximum extent permitted
by the NRS.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us
pursuant to the foregoing provisions, we have been informed that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
Section
16(a) Beneficial Ownership Reporting Compliance
We
do not intend to report compliance thereunder in our proxy statement.
Meetings
of the Board
Each
of the current directors attended 100% of the aggregate number of meetings of the Board in 2021 through the date hereof.
Communications
with the Board
Shareholders
and any interested parties may send correspondence to the Board or to any individual director, by mail to Corporate Secretary, Yew Bio-Pharm
Group, Inc., 9460 Telstar Avenue, Suite 6, El Monte, California 91731 or by e-mail to hpang@speedlightcs.com.
ACTION TWO
APPROVAL
OF GRANT TO THE BOARD OF DIRECTORS THE DISCRETIONARY AUTHORITY TO AFFECT A REVERSE STOCK SPLIT TO THE COMPANY’S COMMON STOCK
We
are seeking shareholder approval to grant the Board discretionary authority to amend the Company’s Articles of Incorporation to
affect a reverse stock split of the issued and outstanding shares of our Common Stock, par value $0.001 per share, such split to combine
a whole number of outstanding shares of our Common Stock in a range of not less than five (5) shares and not more than ten (10) shares,
into one share of Common Stock at any time prior to September 30, 2022 (the “Reverse Stock Split Proposal”).
The
amendments will not change the number of authorized shares of Common Stock, or the relative voting power of our shareholders. Because
the number of authorized shares will not be reduced, the number of authorized but unissued shares of our Common Stock will materially
increase and will be available for reissuance by the Company. The reverse stock split, if affected, would affect all of our holders of
Common Stock uniformly.
The
Board unanimously approved and recommended seeking shareholder approval of this Reverse Stock Split Proposal on November 15, 2020.
Even
if the shareholders approve the Reverse Stock Split Proposal, we reserve the right not to affect any reverse stock split if the Board
does not deem it to be in the best interests of our shareholders. The Board believes that granting this discretion provides the Board
with maximum flexibility to act in the best interests of our shareholders. If this Reverse Split Proposal is approved by the shareholders,
the Board will have the authority, in its sole discretion, without further action by the shareholders, to affect a reverse stock split.
The
Board’s decision as to whether and when to effect the reverse stock split will be based on a number of factors, including prevailing
market conditions, existing and expected trading prices for our Common Stock, actual or forecasted results of operations, and the likely
effect of such results on the market price of our Common Stock.
Following
a reverse stock split, the number of our outstanding shares of Common Stock will be significantly reduced. A reverse stock split will
also affect our outstanding stock options and shares of Common Stock issued under the Company’s 2012 Stock Option Plan (the “Option
Plan”) and the Founder’s Options issued in 2012. Under these plans, the number of shares of Common Stock deliverable upon
exercise or grant must be appropriately adjusted and appropriate adjustments must be made to the purchase price per share to reflect
the reverse stock split.
The
reverse stock split is not being proposed in response to any effort of which we are aware to accumulate our shares of Common Stock or
obtain control of the Company, nor is it a plan by management to recommend a series of similar actions to our Board or our shareholders.
There
are certain risks associated with a reverse stock split, and we cannot accurately predict or assure the reverse stock split will produce
or maintain the desired results (for more information on the risks see the section below entitled “Certain Risks Associated with
a Reverse Stock Split”). However, our Board believes that the benefits to the Company and our shareholders outweigh the risks and
recommends that you vote in favor of granting the Board the discretionary authority to affect a reverse stock split.
Reasons
for the Reverse Stock Split
The
primary purpose for effecting the reverse stock split, should the Board of Directors choose to effect one, would be to increase the per
share price of our Common Stock. The Board of Directors believes that, should the appropriate circumstances arise, affecting the reverse
stock split would, among other things, help us to:
|
●
|
Meet
certain initial listing requirements of the New York Stock Exchange (“NYSE”) and/or NASDAQ;
|
|
|
|
|
●
|
Appeal
to a broader range of investors to generate greater investor interest in the Company; and
|
|
|
|
|
●
|
Improve
the perception of our Common Stock as an investment security.
|
Meet the NYSE or NASDAQ Listing Requirements
- Our Common Stock is currently listed on the OTC:QB (“YEWB”). Both the NYSE and the NASDAQ require a minimum trading
price per share in order to list on either exchange. The NYSE and the NASDAQ Rules and Regulations require among other things, that in
order to list on their exchanges, the average closing price of a company’s common stock must be at least $3.00 or $4.00 per share
over a consecutive 30 trading-day period.
Appeal
to a Broader Range of Investors to Generate Greater Investor Interest in the Company - An increase in our stock price may make our
Common Stock more attractive to investors. Brokerage firms may be reluctant to recommend lower-priced securities to their clients. Many
institutional investors have policies prohibiting them from holding lower-priced stocks in their portfolios, which reduces the number
of potential purchasers of our Common Stock. Investment funds may also be reluctant to invest in lower-priced stocks. Investors may also
be dissuaded from purchasing lower-priced stocks because the brokerage commissions, as a percentage of the total transaction, tend to
be higher for such stocks. Moreover, the analysts at many brokerage firms do not monitor the trading activity or otherwise provide coverage
of lower-priced stocks. Giving the Board of Directors the ability to affect a reverse stock split, and thereby increase the price of
our Common Stock, would give the Board the ability to address these issues if it is deemed necessary.
Improve
the Perception of Our Common Stock as an Investment Security - We believe that the overall economic environment in which we and other
yew tree farmers and producers companies (“Yew Tree Producers”) are currently operating has been a significant contributing
factor in the decline in the price of our Common Stock. Our Board of Directors unanimously approved the discretionary authority to affect
a reverse stock split as one potential means of increasing the share price of our Common Stock to improve the perception of our Common
Stock as a viable investment security. Lower-priced stocks have a perception in the investment community as being risky and speculative,
which may negatively impact not only the price of our Common Stock, but also our market liquidity. As an independent Yew Tree Producer
company, we believe that we may be particularly sensitive to this type of negative public perception and, if this Reverse Stock
Split Proposal is approved, our Board of Directors would have the ability to increase our per share price if it determines that it is
undermining our current or future prospects.
Certain
Risks Associated with a Reverse Stock Split
Even
if a reverse stock split is affected, some or all of the expected benefits discussed above may not be realized or maintained. The market
price of our Common Stock will continue to be based, in part, on our performance and other factors unrelated to the number of shares
outstanding.
The
reverse stock split will reduce the number of outstanding shares of our Common Stock without reducing the number of shares of available
but unissued Common Stock, which will also have the effect of increasing the number of authorized but unissued shares. The issuance of
additional shares of our Common Stock may have a dilutive effect on the ownership of existing shareholders.
The
current economic environment, in which we operate, the substantial debt we carry and other risks which affect our ability to operate
as a going concern, along with otherwise volatile equity market conditions, could limit our ability to raise new equity capital in the
future.
Principal
Effects of a Reverse Stock Split
If
our shareholders approve this Reverse Stock Split Proposal and the Board of Directors elects to effect a reverse stock split, our issued
and outstanding shares of Common Stock would decrease at a rate of approximately one share of Common Stock for every five (5) to ten
(10) shares of Common Stock currently outstanding, with adjustment for any fractional shares. The reverse stock split would be affected
simultaneously for all of our Common Stock, and the exchange ratio would be the same for all shares of Common Stock. The reverse stock
split would affect all of our shareholders uniformly and would not affect any shareholder’s percentage ownership interests in the
Company, except to the extent that it results in a shareholder receiving whole shares in lieu of fractional shares. Shareholders holding
fractional shares as a result of the reverse stock split will be rounded up to the next whole share. The reverse stock split would
not affect the relative voting or other rights that accompany the shares of our Common Stock, except to the extent that it results in
a shareholder receiving a whole share in lieu of fractional shares. Common Stock issued pursuant to the reverse stock split would remain
fully paid and non-assessable. The reverse stock split would not affect our securities law reporting and disclosure obligations, and
we would continue to be subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). We have no current plans to take the Company private. Accordingly, a reverse stock split is not related to a strategy to
do so.
In
addition to the change in the number of shares of Common Stock outstanding, a reverse stock split would have the following effects:
Increase
the Per Share Price of our Common Stock - By effectively condensing a number of pre-split shares into one share of Common Stock,
the per share price of a post-split share is generally greater than the per share price of a pre-split share. The amount of the initial
increase in per share price and the duration of such increase, however, are uncertain. If appropriate circumstances exist, the Board
may utilize the reverse stock split as part of its plan to obtain listing on the NYSE or NASDAQ to meet their listing standards noted
above.
Increase
in the Number of Shares of Common Stock Available for Future Issuance - By reducing the number of shares outstanding without reducing
the number of shares of available but unissued Common Stock, a reverse stock split will increase the number of authorized but unissued
shares. The Board believes the increase is appropriate for use to fund the future operations of the Company. Although the Company does
not have any pending acquisitions for which shares are expected to be used, the Company may also use authorized shares in connection
with the financing of future acquisitions.
The
following table contains approximate information relating to our common stock, based on share information as of November 15, 2021:
|
|
Current
|
|
|
After
Reverse
Split if 1:5
Ratio is
Selected
|
|
|
After
Reverse
Split if 1:10
Ratio is
Selected
|
|
Authorized Common Stock
|
|
|
140,000,000
|
|
|
|
140,000,000
|
|
|
|
140,000,000
|
|
Common Stock issued and outstanding
|
|
|
51,700,000
|
|
|
|
10,340,000
|
|
|
|
5,170,000
|
|
Common Stock issuable upon exercise of outstanding stock options under Stock Option Plans(1)
|
|
|
250,000
|
|
|
|
50,000
|
|
|
|
25,000
|
|
Common Stock reserved for issuance for future grants under Stock Option Plans(1)
|
|
|
19,550,000
|
|
|
|
3,910,000
|
|
|
|
1,955,000
|
|
Common Stock available for issuance upon exercise of Founder’s Stock Options
|
|
|
7,488,737
|
|
|
|
1,497,747
|
|
|
|
748,874
|
|
(1)
|
We
are authorized to issue up to 15,000,000 shares of common stock for grants under the 2012 Stock Option Plan, and 5,000,000 shares
of common stock for grants under the 2019 Equity Incentive Plan.
|
Although
a reverse stock split would not have any dilutive effect on our shareholders, a reverse stock split without a reduction in the number
of shares authorized for issuance would reduce the proportion of shares owned by our shareholders relative to the number of shares authorized
for issuance, giving our Board an effective increase in the authorized shares available for issuance, in its discretion. Our Board from
time to time may deem it to be in the best interests of the Company and our shareholders to enter into transactions and other ventures
that may include the issuance of shares of our Common Stock. If our Board authorizes the issuance of additional shares subsequent to
the reverse stock split described above, the dilution to the ownership interest of our existing shareholders may be greater than would
occur had the reverse stock split not been affected. Many stock issuances not involving equity compensation do not require shareholder
approval, and our Board generally seeks approval of our shareholders in connection with a proposed issuance only if required at that
time.
Require
Adjustment to Currently Outstanding Securities Exercisable into Shares of our Common Stock - A reverse stock split would affect a
reduction in the number of shares of Common Stock issuable upon the exercise of our outstanding stock options in proportion to the reverse
stock split ratio. Additionally, the exercise price of outstanding options would increase, likewise in proportion to the reverse stock
split ratio.
Require Adjustments to Number of Shares of Common
Stock Available for Future Issuance under our 2012 Stock Option Plan and 2019 Equity Incentive Plan - In connection
with any reverse split, our Board would also make a corresponding reduction in the number of shares available with respect to options
granted under our 2012 Stock Option Plan and 2019 Equity Incentive Plan so as to avoid the effect of increasing the value of options
previously granted.
In
addition, a reverse stock split may result in some shareholders owning “odd lots” of less than 100 shares of Common Stock,
which may be more difficult to sell and may cause those holders to incur greater brokerage commissions and other costs upon sale.
Authorized
Shares of Common Stock
The
Reverse Stock Split Proposal will not change the number of authorized shares of Common Stock but will increase the number of authorized
shares available for future issuance for corporate needs such as equity financing, retirement of outstanding indebtedness, stock splits
and stock dividends, employee benefit plans, or other corporate purposes as may be deemed by the Board to be in the best interests of
the Company and its shareholders. The Board believes the increase in available shares for future issuance is appropriate to fund the
future operations of the Company. It will also provide the Company with greater flexibility to respond quickly to advantageous business
opportunities. However, we may from time to time explore opportunities to make acquisitions using stock. As a result, the Company’s
current number of authorized shares of Common Stock may enable the Company to better meet its future business needs.
We
believe that the current amount of authorized Common Stock will make a sufficient number of shares available, should the Company decide
to use its shares for one or more of such previously mentioned purposes or otherwise. The current capital will provide the Board with
the ability to issue additional shares of stock without further vote of the shareholders of the Company, except as provided under Nevada
corporate law or under the rules of any national securities exchange on which shares of stock of the Company are then listed.
Procedure
for Effecting Reverse Stock Split and Exchange of Stock Certificates
If
the Reverse Stock Split Proposal is approved by our shareholders, our Board, in its sole discretion, will determine whether such
an action is in the best interests of the Company and our shareholders, taking into consideration the factors discussed above. If our
Board believes that a reverse stock split is in our best interests and the best interest of our shareholders, our Board will then implement
the reverse stock split.
We
would then file a certificate of amendment to our Articles of Incorporation with the Secretary of the State of Nevada at such time as
our Board of Directors had determined as the appropriate effective time for the reverse stock split to affect the reverse split. The
certificate of amendment would add a new provision providing that holders of our Common Stock immediately prior to the filing of the
amendment, as attached to this Information Statement as Exhibit A, will receive one share of Common Stock for each number of shares
selected by the Board. Upon the filing of the certificate of amendment, and without any further action on the part of the Company or
our shareholders, the issued shares of Common Stock held by shareholders of record as of the effective date of the reverse stock split
would be converted into a lesser number of shares of Common Stock calculated in accordance with the reverse stock split ratio of not
less than one-for-five (1:5) or not more than one-for-ten (1:10), as selected by our Board and set forth in the certificate of amendment.
For
example, if a shareholder presently holds 100 shares of our Common Stock, he or she would hold 20 shares of Common Stock following a
one-for-five reverse stock split, or 10 shares of Common Stock following a one-for-ten reverse stock split, in each case with an adjustment
for any fractional shares. Beginning on the effective date of the split, each certificate representing pre-split shares would be deemed
for all corporate purposes to evidence ownership of post-split shares.
As
soon as practicable after the effective date of the reverse stock split, shareholders would be notified that the reverse stock split
had been affected.
Effect
on Beneficial Holders (i.e., Shareholders Who Hold in “Street Name”)
Upon
the reverse stock split, we intend to treat Common Stock held by shareholders in “street name,” through a bank, broker or
other nominee, in the same manner as shareholders whose shares are registered in their own names. Banks, brokers or other nominees will
be instructed to affect the reverse stock split for their customers holding Common Stock in “street name.” However, these
banks, brokers or other nominees may have different procedures than registered shareholders for processing the reverse stock split. If
you hold shares of Common Stock with a bank, broker or other nominee and have any questions in this regard, you are encouraged to contact
your bank, broker or other nominee.
Effect
on Registered “Book-Entry” Holders (i.e., Shareholders that are Registered on the Transfer Agent’s Books and Records
but do not Hold Certificates)
Some
of our registered holders of Common Stock may hold some or all of their shares electronically in book-entry form with our transfer agent,
West Coast Stock Transfer, Inc. These shareholders do not have stock certificates evidencing their ownership of Common Stock. They are,
however, provided with a statement reflecting the number of shares registered in their accounts. If a shareholder holds registered shares
in book-entry form with our transfer agent, no action needs to be taken to receive post-reverse stock split shares. If a shareholder
is entitled to post-reverse stock split shares, a transaction statement will be available to be sent to the shareholder’s address
of record indicating the number of shares (adjusted for any fractional shares) of Common Stock held following the reverse stock split,
if required by the shareholder.
Effect
on Certificated Shares
Upon
the reverse stock split our transfer agent will act as our exchange agent and assist holders of Common Stock in implementing the exchange
of their certificates.
Commencing
on the effective date of a reverse stock split, shareholders holding shares in certificated form may exchange his or her certificates
for new share certificate by contacting our transfer agent directly at West Coast Stock Transfer, Inc., 721 N. Vulcan Ave. 1st FL, Encinitas,
CA 92024. There will be a fee for the issuance of new certificates. The transfer agent will forward you the instructions on how a shareholder
should surrender his or her certificates representing Common Stock (“Old Certificates”) to the transfer agent in exchange
for certificates representing the appropriate number of whole post-reverse stock split Common Stock, as applicable (“New Certificates”).
No New Certificates will be issued to a shareholder until that shareholder has surrendered all Old Certificates, together with a properly
completed and executed letter of transmittal, to the transfer agent. The letter of transmittal will also contain instructions on how
you may obtain New Certificates if your Old Certificates have been lost. If you have lost your certificates, you will have to pay any
surety premium and the service fee required by our transfer agent.
Until
surrendered, we will deem outstanding Old Certificates held by shareholders to be canceled and only to represent the number of whole
shares to which these shareholders are entitled.
Any
Old Certificates submitted for exchange, whether because of a sale, transfer or other disposition of shares, will automatically be exchanged
for New Certificates.
Shareholders
should not destroy any stock certificates and should not submit any certificates until requested to do so by the transfer agent. Shareholders
are encouraged to promptly surrender Old Certificates to the transfer agent (acting as exchange agent in connection with the reverse
stock split) in order to avoid having shares become subject to escheat laws.
Fractional
Shares
The
effect of the reverse split upon existing shareholders of the common stock will be that the total number of shares of the Company’s
common stock held by each shareholder will automatically convert into the number of whole shares of common stock equal to the number
of shares of common stock owned immediately prior to the reverse split divided by the reverse stock split ratio chosen by the Board,
with an adjustment for any fractional shares. (Fractional shares will be rounded up to the next whole share).
Upon
effectuation of the reverse split, each common shareholder’s percentage ownership interest in the Company’s common stock
will remain virtually unchanged, except for minor changes and adjustments that will result from rounding fractional shares into whole
shares. The rights and privileges of the holders of shares of common stock of the Company will be substantially unaffected by the reverse
split. All issued and outstanding options, warrants, and convertible securities would be appropriately adjusted for the reverse split
automatically on the effective date of the reverse split. Shareholders holding a fractional as a result of the reverse split will be
rounded up to the next whole share.
No
Appraisal Rights
Our
shareholders are not entitled to appraisal rights with respect to a reverse stock split, and we will not independently provide shareholders
with any such right.
Interests
of Directors and Executive Officers
Our
directors and executive officers have no substantial interests, directly or indirectly, in the matters set forth in this Reverse Stock
Split Proposal except to the extent of their ownership of shares of our Common Stock.
Reservation
of Right to Abandon Reverse Stock Split
We
reserve the right to abandon a reverse stock split without further action by our shareholders at any time before the effectiveness of
the filing with the Secretary of the State of Nevada of the certificate of amendment to our Articles of Incorporation, even if the authority
to effect a reverse stock split has been approved by our shareholders at the Annual Meeting. By voting in favor of a reverse stock split,
you are expressly also authorizing the Board to delay, not to proceed with, and abandon, a reverse stock split if it should so decide,
in its sole discretion, that such action is in the best interests of the shareholders.
Vote
Required
The
holders of a majority of all of the shares of the stock entitled to vote are required.
The
affirmative vote of the holders of a majority of the outstanding shares of our Common Stock is required for approval of the Reverse
Stock Split Proposal. As discussed above, the majority shareholders of our common stock have consented to this action two.
ACTION THREE
RATIFICATION
OF APPOINTMENT OF INDEPENDENT
REGISTERED
PUBLIC ACCOUNTING FIRM
The
Board has appointed the firm of Simon & Edward, LLP (“Simon & Edward”) to act as our independent registered public
accounting firm for the fiscal year ending December 31, 2021, and such appointment is being submitted to our shareholders for ratification
of which a majority of such shareholders entitled to vote approved of the ratification on November 15, 2021 by written consent
in lieu of a shareholder annual meeting. Simon & Edward is considered by our management to be well qualified.
Audit
and Other Fees
Since
November 2018, Simon & Edward has served as our independent registered public accounting firm. The following table summarizes the
fees charged by Simon & Edward for the services rendered to the Company during its terms of engagement in 2020:
|
|
2020
|
|
Audit Fees (1)
|
|
$
|
110,000
|
|
Audit-Related Fees
|
|
$
|
-
|
|
Tax Fees -Simon & Edward, LLP
|
|
$
|
10,000
|
|
All Other Fees
|
|
$
|
-
|
|
Total Fees
|
|
$
|
120,000
|
|
(1)
|
Represents
aggregate fees charged by Simon & Edward for its annual audits and quarterly reviews.
|
EXECUTIVE
COMPENSATION
The
Summary Compensation Table shows certain compensation information for services rendered in all capacities for the fiscal years ended
December 31, 2020, 2019 and 2018. Other than as set forth herein, no executive officer’s salary and bonus exceeded $100,000 in
any of the applicable years. The following information includes the dollar value of base salaries, bonus awards, the number of stock
options granted and certain other compensation, if any, whether paid or deferred.
Summary
Compensation Table
Name and Principal Position
|
|
Year
|
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards ($)
|
|
|
Option
Awards
($)
|
|
|
Non-equity
incentive
plan
compensation
($)
|
|
|
Non-qualified
deferred
compensation
earnings
($)
|
|
|
All other
compensation
($)
|
|
|
Total
($)
|
|
Zhiguo Wang (1) President,
|
|
|
2020
|
|
|
|
27,818
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
27,818
|
|
Chief Executive Officer
|
|
|
2019
|
|
|
|
21,077
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
21,077
|
|
|
|
|
2018
|
|
|
|
9,017
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9,017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guifang Qi (1)
|
|
|
2020
|
|
|
|
69,600
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
69,600
|
|
Treasurer, YBP and Vice
|
|
|
2019
|
|
|
|
69,600
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
69,600
|
|
General Manager, HDS
|
|
|
2018
|
|
|
|
69,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
69,600
|
|
(1).
On July 23, 2021, Mr. Zhiguo Wang resigned as a Director and Chief Executive Officer, President and Chief Financial Officer, of the Company,
due to personal reasons. On the same date, Ms. Guifang Qi was appointed as the Chief Executive Officer, President, Chief Financial Officer
and Chairman of the Board of the Company. Ms. Qi is the wife of Mr. Wang.
Employment
Agreements
Currently
we have no written employment agreements with any of our executive officers.
Outstanding
Equity Awards at Fiscal Year-End
On
December 13, 2012, at a special meeting of our shareholders (the “Special Meeting”), our shareholders approved the issuance
of a stock purchase option (each, a “Founder’s Option” and collectively, the “Founders’ Options”)
to Zhiguo Wang, Guifang Qi and Xingming Han (collectively, the “Founders”). Following the Special Meeting, the Board met
on December 13, 2012 and, among other things, issued the Founders’ Options to the Founders.
The
terms of each Founder’s Option are identical to each other except for the name of the optionee and the number of shares of the
Company’s common stock subject to each such Founder’s Option. The principal terms of the Founders’ Options include
the following:
|
●
|
each
Founder’s Option is fully vested upon issuance;
|
|
|
|
|
●
|
each
Founder’s Option is exercisable for a period of five years from the date of issuance; the expiration date for Mr. Zhiguo Wang
and Ms. Guifang Qi’s Options are extended to December 31, 2021, and Mr. Xingming Han’s Option was already expired;
Mr.
Wang’s and Ms. Qi’s options expire on December 31, 2021;
|
|
|
|
|
●
|
each
Founder’s Option is exercisable at $0.22 per share; and
|
|
|
|
|
●
|
each
Founder’s Option has a cashless exercise feature, pursuant to which, at the optionee’s election, he or she may choose
to deliver previously-owned shares of YBP common stock in payment of the exercise price or not pay the exercise price of the Founder’s
Option and receive instead a reduced number of shares of YBP common stock reflecting the value of the number of shares of YBP common
stock equal to the difference, if any, between the aggregate fair market value of the shares issuable upon exercise of the Founder’s
Option and the exercise price of the Founder’s Option.
|
The
following table provides information concerning unexercised options, stock that has not vested and equity incentive plan awards for each
named executive officer outstanding at December 31, 2020.
|
|
OPTION
AWARDS
|
|
STOCK
AWARDS
|
|
Name
|
|
Number
of
Securities
Underlying
Unexercised
options
(#)
|
|
|
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
|
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
|
Option
Exercise
Price
($)
|
|
|
Option
Expiration
Date
|
|
Number
of Shares or Units of Stock that have not Vested
(#)
|
|
|
Market
Value of
Shares
or Units
of Stock
that
have not
Vested
($)
|
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights that
have not
Vested
(#)
|
|
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
other Rights
that have
not Vested
($)
|
|
Zhiguo
Wang (1)
|
|
|
5,000,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.22
|
|
|
12/31/2021
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Guifang
Qi (1)
|
|
|
2,488,737
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.22
|
|
|
12/31/2021
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(1).
On July 23, 2021, Mr. Zhiguo Wang resigned as a Director and Chief Executive Officer, President and Chief Financial Officer, of the Company,
due to personal reasons. On the same date, Ms. Guifang Qi was appointed as the Chief Executive Officer, President, Chief Financial Officer
and Chairman of the Board of the Company. Ms. Qi is the wife of Mr. Wang.
We
are authorized to issue up to 15,000,000 shares of common stock for grants under the 2012 Plan, which was adopted by our Board of Directors
on September 25, 2012 and approved by our shareholders at the Special Meeting on December 13, 2012. Under the Company’s 2019 Equity
Incentive Plan, we are also authorized to issue up to 5,000,000 shares of common stock for grants.
Bonuses
and Deferred Compensation
We
have no bonus, deferred compensation or retirement plan. Decisions regarding compensation are determined by our board of directors.
Payment
of Post-Termination Compensation
We
do not have change-in-control agreements with any of our directors or executive officers, and we are not obligated to pay severance or
other enhanced benefits to executive officers upon termination of their employment.
Board
of Directors and Director Compensation
All
directors hold office until the next annual meeting of shareholders and until their successors have been duly elected and qualified.
Officers are elected by and serve at the discretion of the board of directors. We do not currently have any independent directors. Our
directors do not receive compensation for serving in such capacity.
Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The
following table sets forth, as of November 15, 2021, the number of shares of our common stock owned of record and beneficially
by all directors, executive officers, nominees for director and persons who beneficially own more than 5% of the outstanding shares of
our common stock:
Name
and Address
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Amount
and
Nature of
Beneficial
Ownership
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Percentage
of
Common Stock(1)
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Guifang Qi (2)(4)(5)
President, Chief Executive Officer,
Chief Financial Officer, Director
9460 Telstar Avenue, Suite 6
El Monte, CA 91731
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30,031,949
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50.74
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%
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Xuehai Wu
Director
Room 503, Unit 2, No 117, North No. 7 Street
Daowai District, Harbin City
People’s Republic of China
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200,000
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*
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Yongchun Shi
Independent Director
9460 Telstar Avenue, Suite 6
El Monte, CA 91731
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-0-
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*
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Xiefeng Liu
Independent Director
9460 Telstar Avenue, Suite 6
El Monte, CA 91731
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-0-
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*
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Hailong Sun
Independent Director
9460 Telstar Avenue, Suite 6
El Monte, CA 91731
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-0-
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*
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Zhiguo Wang (2)(3)(5)
Harbin, China
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30,031,949
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50.74
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%
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All Officers and Directors
as a group - 5
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30,231,949
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51.08
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%
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*
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less
than 1%
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(1)
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Percentage
ownership is based on 59,188,737 shares of YBP common stock deemed outstanding on November 15, 2021, assuming exercise of
all outstanding Founders’ Options, all of which are exercisable within 60 days. Beneficial ownership is determined in accordance
with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject
to options, warrants and convertible notes currently exercisable or convertible, or exercisable or convertible within 60 days, are
deemed outstanding for determining the number of shares beneficially owned and for computing the percentage ownership of the person
holding such options, but are not deemed outstanding for computing the percentage ownership of any other person. Except as indicated
by footnote, the persons named in the table have sole voting and investment power with respect to all shares of common stock shown
as beneficially owned by them.
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(2)
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Zhiguo
Wang and Guifang Qi are husband and wife.
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(3)
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Consists
of (i) 20,103,475 shares held by Mr. Wang; (ii) 2,439,737 shares held by Madame Qi; and (iii) 5,000,000 shares which are issuable
upon exercise of the Founder’s Option issued to Mr. Wang, which option is exercisable within 60 days; and (iv) 2,488,737 shares
which are issuable upon exercise of the Founder’s Option issued to Madame Qi, which option is exercisable within 60 days.
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(4)
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Consists
of (i) 2,439,737 shares held by Madame Qi; (ii) 20,103,475 shares held by Mr. Wang; (iii) 2,488,737 shares which are issuable upon
exercise of the Founder’s Option issued to Madame Qi, which option is exercisable within 60 days; and (iv) 5,000,000 shares
which are issuable upon exercise of the Founder’s Option issued to Mr. Wang, which option is exercisable within 60 days.
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(5)
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On
July 23, 2021, Mr. Zhiguo Wang resigned as a Director and Chief Executive Officer, President and Chief Financial Officer, of the
Company, due to personal reasons. On the same date, Ms. Guifang Qi was appointed as the Chief Executive Officer, President, Chief
Financial Officer and Chairman of the Board of the Company. Ms. Qi is the wife of Mr. Wang.
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Certain
Relationships and Related Transactions and Director Independence
Transactions
with Yew Pharmaceutical
On
January 9, 2010, the Company entered into a Cooperation and Development Agreement (the “Development Agreement”) with Yew
Pharmaceutical. Pursuant to the Development Agreement, for a period of ten years expiring on January 9, 2020, the Company shall supply
cultivated yew raw materials to Yew Pharmaceutical that will be used by Yew Pharmaceutical to make traditional Chinese medicines and
other pharmaceutical products, at price of RMB 1,000,000 (approximately $146,000) per metric ton. In addition, the Company entered into
a series of wood ear mushroom selling agreements with Yew Pharmaceuticals, pursuant to which the Company sells wood ear mushroom collected
from local peasants to Yew Pharmaceuticals for manufacturing of wood ear mushroom products. Furthermore, the Company entered into a series
of yew candles, yew essential oil soaps, complex taxus cuspidate extract, composite northeast yew extract and pine needle extracts purchase
agreements with Yew Pharmaceuticals, pursuant to which the Company purchases yew candles and pine needle extracts as finished goods and
then sells to third party and related party. The Company has not renewed the Development Agreement with Yew Pharmaceutical yet. We currently
enter into individual agreement for each single transaction.
For
the years ended December 31, 2020 and 2019, total revenues from Yew Pharmaceutical under the above agreement amounted to $16,659,547
and $10,705,727, and the corresponding cost of revenues amounted to $14,792,713 and $9,962,940, respectively. At December 31, 2020 and
2019, the Company had $2,982,114 and $Nil accounts receivable from Yew Pharmaceutical, respectively.
For
the years ended December 31, 2020 and 2019, the total purchase of yew candles, yew essential oil soap, complex taxus cuspidate extract,
composite northeast yew extract, wood ear mushroom extract, and pine needle extracts from Yew Pharmaceutical amounted to $7,980,296 and
$13,299,780, respectively. For the years ended December 31, 2020 and 2019, the products purchased from Yew Pharmaceutical in the amount
of $10,059,610 and $16,633,020 were sold and included in the total cost of revenues of $23,846,886
and $27,109,518, respectively. At December 31, 2020 and 2019, the Company had $Nil and $16,629 accounts payable to Yew Pharmaceutical,
respectively.
Transactions
with HBP
For
the years ended December 31, 2020 and 2019, HBP paid off operation expense on behalf of HYF in the amount of $Nil and $1,737. As of December
31, 2020 and 2019, HYF had due to HBP in the amount of $96,282 and $103,158, respectively, which was included in due to related parties
in the accompanying consolidated balance sheets.
Transactions
with Lifeforfun Limited
For
the years ended December 31, 2020 and 2019, total revenues from Lifeforfun Limited amounted to $7,056,000 and receivable from $Nil. As
of December 31, 2020 and 2019, the Company had $6,036,080 and $Nil accounts Lifeforfun Limited, respectively.
Transactions
with DMSU
On
February 10, 2020, the Company entered a payment schedule agreement with DMSU regarding the outstanding accounts receivable under 2018
and 2020 sales contracts. Pursuant to the payment schedule, DMSU agreed to make payments in 2020 totaling of $1,000,000 out of total
$5,304,000 receivable balance under 2018 sales contracts and the remaining will be paid within next three years. Regarding the 2020 sales
contracts entered, DMSU will arrange payments of the entire transaction within six months after goods are delivered.
For
the year ended December 31, 2020, total revenues from DMSU amounted to $2,592,000. The company collected approximately $2,753,000 from
DMSU during the year of 2020, of which $161,000 was recorded as recovery of accounts receivable due from DMSU previously written off
under 2018 sales contracts. The company further collected approximately $757,000 from DMSU subsequently during the first quarter of 2021,
which was fully recorded as recovery of accounts receivable due from DMSU previously written off under 2018 sales contracts.
For
the year ended December 31, 2019, there was $Nil sales transaction the Company conducted with DMSU. The Company recovered approximately
$1,034,000 of accounts receivable previously written off from DMSU. The amount 1,034,000 was recorded in bad debt recovery.
Transactions
with YIDA
For
the years ended December 31, 2020 and 2019, total revenues from YIDA amounted to $Nil and $7,144,649. As of December 31, 2020 and 2019,
the Company had $Nil and $193,000 accounts receivable, which were net of allowance for doubtful account $386,000 and $193,000 from YIDA,
respectively.
Transactions
with ZTC
For
the years ended December 31, 2020 and 2019, HDS purchased yew forest assets from ZTC in the amount of $1,057,664 and $2,121,880, respectively.
Since the assets purchase occurred between entities under common control, the Company recorded the assets received at historical carrying
costs recorded by ZTC, which amounted to $935,885 and $1,729,793, respectively. The differences between the actual contract price and
carrying costs are recorded as additional paid-in capital in the amount of $121,779 and $392,087, respectively. As of December 31, 2020
and 2019, the Company had no balance payable to ZTC.
Transactions
with Xinlin
For
the years ended December 31, 2020 and 2019, HDS purchased yew forest assets from Xinlin in the amount of $463,634 and $148,396, respectively.
Since the assets purchase occurred between entities under common control, the Company recorded the assets received at historical carrying
costs recorded by Xinlin, which amounted to $410,316 and $121,981, respectively. The differences between the actual contract price and
carrying costs are recorded as additional paid-in capital in the amount of $53,318 and $26,415, respectively. As of December 31, 2020
and 2019, the Company had no balance payable to Xinlin.
Transactions
with Jinguo Wang
For
the years ended December 31, 2020 and 2019, HDS purchased yew forest assets and yew seedlings from Jinguo Wang in the amount of $1,124,312
and $1,078,121, respectively. As of December 31, 2020 and 2019, the Company had no accounts payable to Jinguo Wang.
Transactions
with Weihong Zhang
For
the years ended December 31, 2020 and 2019, HDS purchased yew forest assets from Weihong Zhang in the amount of $28,977 and $789,032,
respectively.
Transactions
with Chunping Wang
For
the years ended December 31, 2020 and 2019, HDS purchased yew forest assets from Chunping Wang in the amount of $870,762 and $1,653,347,
respectively.
Transactions
with Xue Wang
For
the years ended December 31, 2020 and 2019, HDS purchased yew forest assets from Xue Wang in the amount of $751,956 and $157,054, respectively.
Transactions
with Cai Wang
For
the years ended December 31, 2020 and 2019, HDS purchased yew forest assets from Cai Wang in the amount of $391,191 and $81,075, respectively.
Loans
Guaranteed
As
of December 31, 2020 and 2019, the Company’s certain loans were guaranteed by related parties (see note 8).
Operating
Leases
On
March 25, 2005, the Company entered into an Agreement for the Lease of Seedling Land with ZTC (the “ZTC Lease”). Pursuant
to the ZTC Lease, the Company leased 361 mu of land from ZTC for a period of 30 years, expiring on March 24, 2035. Annual payments under
the ZTC Lease are RMB 162,450 (approximately $24,000). The payment for the first five years of the ZTC Lease was due prior to December
31, 2010 and beginning in 2011, the Company is required to make full payment for the land use rights in advance for each subsequent five-year
period. For the years ended December 31, 2020 and 2019, rent expense related to the ZTC Lease amounted to approximately
$24,000 and $24,000, respectively. At December 31, 2020 and 2019, prepaid rent to ZTC amounted to approximately
$Nil and $5,800 which was included in prepaid expenses-related parties in the accompanying consolidated balance sheets.
On
January 1, 2010, the Company entered into a lease for office space with Mr. Wang (the “Office Lease”). Pursuant to the Office
Lease, annual payments of RMB15,000 (approximately $2,000) are due for each of the term. The term of the Office Lease is 15 years and
expires on December 31, 2025. For the years ended December 31, 2020 and 2019, rent expense related to the Office Lease amounted to approximately
$2,200 and $2,200, respectively. As of December 31, 2020 and 2019, the Company had no unpaid rent related to the Office Lease.
On
July 1, 2012, the Company entered into a lease for office space with Mr. Wang (the “JSJ Lease”). Pursuant to the JSJ Lease,
JSJ leases approximately 30 square meter of office space from Mr. Wang in Harbin. Rent under the JSJ Lease is RMB10,000 (approximately
$1,500) annually. The term of the JSJ Lease is three years and expires on June 30, 2015. On July 1, 2015, the Company and Mr. Wang renewed
the JSJ Lease. The renewed lease expires on June 30, 2018. On July 1, 2018, the Company renewed JSJ Lease for three years, which will
now expire on June 30, 2021. Pursuant to the renewed lease agreement, the annual payment will be RMB 10,000 (approximately $1,500). For
the years ended December 31, 2020 and 2019, rent expense related to the JSJ Lease amounted to approximately $1,400 and $1,400, respectively.
As of December 31, 2020 and 2019, the unpaid rent was approximately $Nil and $700 respectively, which was included in due to related
parties in the accompanying consolidated balance sheets.
The
Company entered into two forest land leases with Mr. Wang. Pursuant to the Leases, Mr.Wang leases two forest land with area of 20 mu
and 73 mu, respectively, to the Company for free. The leases terms are for the periods from January 9, 2008 to November 24, 2022 and
from January 30, 2007 to December 30, 2026, respectively.
On
January 1, 2015, HYF entered into an lease agreement with HBP, pursuant to which HBP leases a warehouse, with an area of 225 square meters,
and a workshop, with an area of 50 square meters, both of which are located at No.1 Zisan Road, Shangzhi economic development district,
Shangzhi City, Heilongjiang Province, to HYF in exchange for no consideration for the period from January 1, 2015 to December 31, 2020.
The
Company leased office space in the A’cheng district in Harbin (the “A’cheng Lease”) from HDS Development on March
20, 2002. The A’cheng Lease is for a term of 23 years and expires on March 19, 2025. Pursuant to the A’cheng Lease, lease
payment shall be made as follows:
Period
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Annual
lease
amount
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Payment
due date
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March
2002 to February 2012
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RMB
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25,000
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Before
December 2012
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March
2012 to February 2017
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RMB
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25,000
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Before
December 2017
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March
2017 to March 2025
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RMB
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25,000
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Before
December 2025
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For
the years ended December 31, 2020 and 2019, rent expense related to the A’cheng Lease amounted approximately $3,600 and $3,600,
respectively. At December 31, 2020 and 2019, the prepaid rent was $Nil.
The
Company leased an apartment the Nangang district (the “Jixing Lease”) in Harbin from Ms. Qi on October 1, 2016. The initial
lease term of Jixing Lease is one year and renewed twice currently with the expiration date on September 30, 2019. For the years ended
December 31, 2020 and 2019, rent expense related to the Jixing Lease amounted approximately $Nil and $1,100, respectively.
Due
to Related Parties
The
Company’s officers, directors and other related parties, from time to time, provided advances to the Company for working capital
purpose. These advances and payables are usually short-term in nature, non-interest bearing, unsecured and payable on demand.
The
following summarized the Company’s due to related parties as of December 31, 2020 and 2019:
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December 31,
2020
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December 31,
2019
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Zhiguo Wang and Guifang Qi
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$
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555,078
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$
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530,621
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HBP
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96,282
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103,158
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Total
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$
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651,360
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$
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633,779
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The
original structuring of the Company and the second restructure of the Company that we implemented in 2010 (the “Second Restructure”)
involved transactions between the Company and Zhiguo Wang, Guifang Qi, who are also our directors and executive officers, and Xingming
Han, a former director of the Company (collectively, the “HDS Shareholders”). These transactions were not negotiated at arm’s
length. While we have not discovered any precedent under Nevada law for a transaction like the Second Restructure, it is possible that
the Second Restructure should have been approved by YBP’s shareholders because it may be viewed as having involved the sale of
all or substantially all of YBP’s assets in that the stock of HDS was transferred from a wholly-owned subsidiary, JSJ, to the HDS
Shareholders. However, because the Company was not yet subject to the reporting obligations of the Exchange Act, YBP was unable to issue
a proxy statement to its shareholders in connection with such approval. The Company sought and obtained shareholder ratification of the
Second Restructure and all of the transactions effected in connection therewith at the Special Meeting on December 13, 2012.
The
terms of the Founders’ Options have not been determined as a result of arm’s-length negotiations. The Board of Directors
of YBP, which consists of the same persons who are the HDS Shareholders and the grantees of the Founders’ Options, sought and obtained
shareholder approval of the issuance of the Founders’ Options at the Special Meeting on December 13, 2012.
WHERE
YOU CAN FIND MORE INFORMATION
The
Company is subject to the informational requirements of the Exchange Act and files reports and other information with the SEC. Such reports
and other information filed by the Company may be inspected and copied at the SEC’s Public Reference Room at 100 F Street, N.E.,
Washington, DC 20549-2736.
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By
order of the Board of Directors
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/s/
Guifang Qi
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Guifang
Qi, Chief Executive Officer
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November__,
2021
El
Monte, California
Exhibit
A
CERTIFICATE
OF AMENDMENT
OF
ARTICLES
OF INCORPORATION
OF
YEW
BIO-PHARM GROUP, INC.
Yew
Bio-Pharm Group, Inc., a corporation organized and existing under the laws of the State of Nevada (the “Corporation”), does
hereby certify as follows:
1.
The name of the Corporation is Yew Bio-Pharm Group, Inc.
2.
Article 4 of the Articles of Incorporation of the Corporation, as amended to date, is hereby amended by replacing the first paragraph
thereof with the following:
“The
total number of shares of all classes of stock which the Corporation shall have the authority to issue 140,000,000 shares of the par
value of $.001 each are to be of a class designated Common Stock (the “Common Stock”).
Upon
the filing and effectiveness (the “Effective Time”) of this amendment to the Corporation’s Articles of Incorporation
pursuant to the Nevada Corporation Law, each _______________ shares of the Common Stock (the “Old Common Stock”) issued immediately
prior to the Effective Time shall be reclassified and combined into one validly issued, fully paid and non-assessable share of the Corporation’s
common stock, $.001 par value per share (the “New Common Stock”), without any action by the holder thereof (the “Reverse
Stock Split”). Any shareholder who owns one or fewer shares will be rounded-up to one whole share. No fractional shares will be
issued. Each certificate that theretofore represented shares of Old Common Stock shall thereafter represent that number of shares of
New Common Stock into which the shares of Old Common Stock, represented by such certificate shall have been reclassified and combined;
provided, that each person holding of record a stock certificate or certificates that represented shares of Old Common Stock shall receive,
upon surrender of such certificate or certificates, a new certificate or certificates evidencing and representing the number of shares
of New Common Stock to which such person is entitled under the foregoing reclassification and combination.”
3.
This Certificate of Amendment has been duly adopted by the Board of Directors and stockholders of the Corporation in accordance with
Section ___ of the Corporation Law of the State of Nevada.
4.
This Certificate of Amendment shall become effective at ____________ ___. m. Pacific Time on ___________, _________.
IN
WITNESS WHEREOF, the Corporation has caused its duly authorized officer to execute this Certificate of Amendment on this _____ day of
_________, _________.
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Yew
Bio-Pharm Group, Inc.
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By:
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Name:
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Title:
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