DEFR14C: Elevai Labs Inc. Announces Re-Domestication to Nevada as PMGC Holdings Inc.

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

Summary

• Elevai Labs Inc. is changing its state of incorporation from Delaware to Nevada, and will become PMGC Holdings Inc.
• This re-domestication was approved by a majority of shareholders holding approximately 60.32% of the company's 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 cost savings.
• The re-domestication will be achieved through a merger of Elevai Labs Inc. into a newly formed Nevada subsidiary, PMGC Holdings Inc.
• The merger will not be effective until at least 20 days after the mailing of this information statement, which was on or about November 25, 2024.
• Existing shareholders of Elevai Labs Inc. will automatically become shareholders of PMGC Holdings Inc. with each share of Elevai Labs Inc. converting into one share of PMGC Holdings Inc.
• 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 company's daily business operations and principal executive offices will remain in Newport Beach, California.
• The financial condition and results of operations of PMGC Holdings Inc. will be identical to that of Elevai Labs Inc. immediately prior to the re-domestication.
• The directors of PMGC Holdings Inc. will be Braeden Lichti, Graydon Bensler, Jeffrey Parry, Juliana Daley, George Kovalyov and Jordan Plews.

Sentiment

Score: 7

Explanation: The document conveys a positive sentiment due to the cost-saving benefits of the re-domestication and the company's efforts to maintain continuity. However, there are some potential risks and uncertainties associated with the move to Nevada, which temper the overall sentiment.

Positives

• The re-domestication to Nevada will eliminate the obligation to pay Delaware's annual franchise tax, resulting in significant cost savings.
• Nevada has minimal reporting and corporate disclosure requirements, and the identity of corporate shareholders is not part of the public record.
• 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 existing documents.
• The re-domestication will not result in any change to the company's daily business operations or the location of its principal executive offices.

Negatives

• Nevada case law concerning the effects of its statutes and regulations is more limited than Delaware, which may lead to less predictability regarding 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 provides greater latitude in indemnifying officers and directors and shielding them from liabilities, which may be seen as less shareholder-friendly.

Risks

• The limited case law in Nevada may lead to less predictability in legal matters compared to Delaware.
• The re-domestication may have anti-takeover implications due to Nevada law allowing directors to consider interests beyond just shareholders.
• 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 company anticipates that the re-domestication will become effective at the earliest practicable 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 re-domestication is a strategic move to reduce costs and potentially benefit from Nevada's corporate-friendly environment, which is a trend among some companies seeking to optimize their operational and tax structures. Many companies are incorporated in Delaware due to its well-established corporate law, but some are choosing other states like Nevada for potential cost savings and other benefits.

Comparison to Industry Standards

• Many public companies are incorporated in Delaware due to its comprehensive corporate laws and established case law, including companies like Apple, Google, and Coca-Cola.
• Nevada is becoming an increasingly popular alternative for incorporation, particularly for companies seeking lower taxes and less stringent reporting requirements, similar to companies like Switch and Zappos.
• The move to Nevada is similar to other companies that have re-domesticated to reduce tax burdens and streamline corporate governance, although the specific benefits and drawbacks can vary based on the company's unique circumstances.
• The company's decision to maintain similar provisions in the Nevada Articles and Bylaws to the existing Delaware documents is a common practice to ensure continuity and minimize disruption.

Stakeholder Impact

• Shareholders will see their shares automatically converted to PMGC Holdings Inc. shares.
• The re-domestication is expected to benefit shareholders through cost savings from reduced taxes.
• Employees will not experience any changes in their daily work or location.
• Customers and suppliers will not be directly impacted by the re-domestication.

Next Steps

• The company will file the Articles of Merger with the Secretary of State of Nevada and a Certificate of Merger with the Secretary of State of Delaware.
• The re-domestication will become effective at least 20 days after the mailing of the information statement.
• The company will operate under the name PMGC Holdings Inc. after the merger.

Key Dates

Keywords

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