DEF 14C: Yubo International Biotech Approves Director Elections, Auditor Ratification, and Share Issuance via Written Consent

Yubo International Biotech Limited informs stockholders of actions taken by written consent, including the election of directors, ratification of the auditor, and issuance of shares to settle shareholder loans.

Summary

• Yubo International Biotech Limited has issued an information statement to its stockholders regarding actions approved via written consent in lieu of a special meeting.
• The actions, approved on March 31, 2025, by stockholders holding approximately 81.5% of the voting power, include the election of four directors, ratification of HHL LLP as the independent auditor for 2024 and 2025, and the issuance of shares to FlyDragon International Limited and ChinaOne Technology Limited to repay shareholder loans.
• 42,000,000 shares were issued to FlyDragon and 8,600,000 shares to ChinaOne, both at $0.05 per share.
• These actions will become effective approximately May 5, 2025, which is twenty calendar days after the mailing of the information statement.
• The company is not soliciting proxies, as the required stockholder vote has already been obtained.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While it addresses shareholder loans and secures an auditor, the significant dilution of existing shareholders and increased insider control raise concerns.

Positives

• The company has addressed shareholder loans by converting them into equity, which can improve the company's balance sheet.
• The company has secured an independent auditor for the current and upcoming fiscal years.
• The company has elected directors to the board.

Negatives

• The issuance of shares to settle shareholder loans will significantly dilute the ownership interests of other stockholders.
• Jun Wang and Yang Wang will significantly increase their ownership and control of the company.
• The company's board held no formal meetings during the year ended December 31, 2024.

Risks

• The significant dilution of existing shareholders' ownership due to the share issuance could negatively impact investor sentiment.
• The increased control by Jun Wang and Yang Wang may raise concerns about potential conflicts of interest.
• The company's reliance on written consents in lieu of meetings may reduce transparency and shareholder engagement.
• The company's lack of standing audit, nominating and corporate governance or compensation committees may indicate a weakness in corporate governance.

Future Outlook

The company intends to review and consider future proposals regarding board compensation. The company may adopt one or more defined benefit, pension plan, profit sharing or other retirement plans in the future.

Management Comments

• The Board considered Jun Wang's extensive marketing experience in the healthcare industry, current service as our Chief Executive Officer and his comprehensive knowledge of Yubo Beijing, its business and operations.
• The Board considered Yang Wang's experience in the capital markets and mergers and acquisitions.
• The Board believes that it is not necessary to have standing audit, nominating and corporate governance or compensation committees at this time because the functions of such committees are adequately performed by our Board.

Industry Context

In the biotech industry, it is not uncommon for companies to raise capital through equity offerings or to compensate executives with equity. However, the level of dilution and concentration of ownership should be carefully considered.

Comparison to Industry Standards

• The issuance of shares at $0.05 per share to settle debt is significantly below the industry average for biotech companies, which typically trade at multiples of revenue or book value.
• Comparable companies in the biotech sector, such as BioNTech or Moderna, have robust corporate governance structures with independent audit and compensation committees, which Yubo International Biotech currently lacks.
• The level of insider ownership post-issuance is high compared to industry standards, where institutional investors typically hold a larger percentage of shares.

Management Changes

Related Party Transactions

• The company issued shares to FlyDragon International Limited and ChinaOne Technology Limited, entities controlled by Jun Wang and Yang Wang, respectively, to repay shareholder loans.
• Yubo Beijing entered into a Joint Research and Development Agreement with Beijing Zhengxigu, and an Entrustment Technical Service Agreement and a Patent Transfer Agreement with Zhenhuikang, both controlled by Yulin Cao, a shareholder of Yubo Beijing and a director of BOAO Biotech Limited.

Stakeholder Impact

• Existing shareholders will experience significant dilution of their ownership interests due to the share issuance.
• The increased control by Jun Wang and Yang Wang may impact the influence of other stakeholders.
• Employees may be affected by future changes in compensation or retirement plans.

Next Steps

• The corporate actions described in the information statement will become effective approximately 20 calendar days after the initial mailing of the statement to stockholders.
• The company intends to review and consider future proposals regarding board compensation.
• The company may adopt one or more defined benefit, pension plan, profit sharing or other retirement plans in the future.

Key Dates

Keywords

share issuance, written consent, directors, auditor, shareholder loans, corporate governance, biotech