DEF 14C: Elevai Labs Inc. Announces Re-Domestication to Nevada as PMGC Holdings Inc.

Elevai Labs Inc. will re-domesticate from Delaware to Nevada, becoming PMGC Holdings Inc., to eliminate Delaware franchise tax obligations.

Summary

• Elevai Labs Inc. is re-domesticating from Delaware to Nevada and will become PMGC Holdings Inc.
• The re-domestication was approved by a majority of shareholders holding approximately 60.32% of the voting power as of July 15, 2024.
• The primary reason for the move is to avoid Delaware's annual franchise tax, which will result in significant savings.
• Nevada does not have annual franchise taxes, capital stock taxes, or inventory taxes.
• The re-domestication will be achieved through a merger of Elevai Labs Inc. into a wholly-owned Nevada subsidiary, PMGC Holdings Inc.
• The merger will not be effective until at least 20 days after the mailing of this information statement, which is scheduled for on or about November 21, 2024.
• Existing Elevai Labs Inc. shareholders will automatically become shareholders of PMGC Holdings Inc. with the same number of shares.
• The authorized capital stock of PMGC Holdings Inc. will be 2,000,000,000 shares of common stock and 500,000,000 shares of preferred stock, identical to Elevai Labs Inc.
• The re-domestication will not change the company's daily operations or principal executive offices in Newport Beach, California.
• The financial condition and results of operations will remain identical immediately before and after the re-domestication.
• The board of directors of PMGC Holdings Inc. will be the same as Elevai Labs Inc.

Sentiment

Score: 7

Explanation: The document is generally positive, highlighting cost savings and operational continuity. However, it also acknowledges potential risks and uncertainties associated with the re-domestication, which tempers the overall sentiment.

Positives

• The re-domestication will eliminate the annual Delaware franchise tax, leading to significant cost savings.
• Nevada has minimal reporting and corporate disclosure requirements.
• The identity of corporate shareholders is not part of the public record in Nevada.
• The company will endeavor to make no substantive changes in the provisions and terms of the Nevada Articles and Nevada Bylaws from the provisions and terms of Elevai Labs Inc.'s Third Amended and Restated Certificate of Incorporation, as amended, and Bylaws.
• The re-domestication is not being effected to prevent a change in control or in response to any present attempt to acquire control of the company.

Negatives

• Nevada case law concerning the effects of its statutes and regulations is more limited than Delaware, which may lead to less predictability in corporate affairs and transactions.
• Under Nevada law, directors can only be removed by a two-thirds vote of shareholders, whereas Delaware law allows removal by a simple majority.
• Nevada law permits greater latitude in indemnifying officers and directors and the ability to shield them from liabilities.
• Nevada law does not require notice to stockholders of action taken by less than all of the stockholders by written consent.

Risks

• The limited Nevada case law may result in less predictability regarding the legality of corporate affairs and transactions.
• The re-domestication may have anti-takeover implications due to Nevada law allowing directors to consider interests beyond just stockholders.
• There is a risk that future legislation, regulations, administrative rulings, or court decisions could alter the tax consequences of the re-domestication.
• The company has not requested a tax opinion from legal counsel or rulings from the Internal Revenue Service regarding the consequences of the re-domestication.

Future Outlook

The company intends the re-domestication to be a tax-free reorganization under the Internal Revenue Code. The re-domestication is expected to be effective at the earliest practicable date, but the merger agreement can be terminated at any time before the effective date.

Management Comments

• The principal reason for Re-Domestication from Delaware to Nevada is to eliminate our obligation to pay the annual Delaware franchise tax that will result in significant savings to us in the future.
• We will endeavor to adapt as closely as possible the Nevada incorporation and bylaws documents to the existing Delaware documents.

Industry Context

The document notes that Delaware has historically been the state in which a majority of public companies incorporate, and that Nevada is emulating and in certain cases surpassing Delaware in creating a corporation-friendly environment. This suggests a trend of companies considering alternative states for incorporation to reduce costs and potentially benefit from more favorable regulations.

Comparison to Industry Standards

• Delaware is known for its comprehensive and frequently updated corporate laws, as well as a substantial body of case law, which provides predictability for corporations.
• Nevada is becoming an increasingly popular alternative to Delaware, particularly for companies seeking to reduce tax burdens and benefit from more flexible corporate laws.
• Many companies, such as those in the technology and biotech sectors, have historically chosen Delaware for its established legal framework, while others, particularly smaller companies, are increasingly considering Nevada for its cost-effectiveness.
• The document highlights specific differences between Delaware and Nevada law, such as the removal of directors, limitations on personal liability, and indemnification of officers and directors, which are important considerations for companies when choosing a state of incorporation.
• The document does not mention specific comparable companies that have re-domesticated from Delaware to Nevada, but the general trend of companies seeking cost savings and more flexible regulations is well-documented.

Corporate Governance

Stakeholder Impact

• Shareholders will see no change in their ownership percentage or the number of shares they hold.
• Shareholders will be subject to Nevada law, which has some differences from Delaware law.
• Employees will not be affected by the re-domestication, as the company's daily operations and location will remain the same.
• Creditors and suppliers will not be affected by the re-domestication, as the company's financial condition and operations will remain the same.

Next Steps

• The company will file the Merger Agreement with the Secretary of State of Nevada and Delaware.
• The re-domestication will become effective at least 20 days after the mailing of the information statement.
• Existing Elevai Labs Inc. stock certificates will automatically represent PMGC Holdings Inc. shares.

Key Dates

Keywords

re-domestication, Nevada corporation, Delaware corporation, franchise tax, PMGC Holdings Inc., merger, corporate governance, shareholder rights