UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
(Amendment No. __)
Filed by the Registrant ☒
Filed by a Party
other than the Registrant ☐
Check the
appropriate box:
☐
Preliminary Proxy Statement
☐
Confidential, For Use of the Commission Only (As Permitted by Rule
14a-6(e)(2))
☒
Definitive Proxy Statement
☐
Definitive Additional Materials
☐
Soliciting Material under Rule 14a-12
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AOXING
PHARMACEUTICAL COMPANY, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment of Filing
Fee (Check the appropriate box):
☒ No
fee required
☐ Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title
of each class of securities to which transaction
applies:
(2) Aggregate
number of securities to which transaction applies:
(3) 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):
(4) Proposed
maximum aggregate value of transaction:
(5) Total
fee paid:
☐ Fee
paid previously with preliminary materials.
☐ 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.
(1) Amount
Previously Paid:
(2) Form,
Schedule or Registration Statement No.:
(3) Filing
Party:
(4) Date
Filed:
AOXING PHARMACEUTICAL COMPANY, INC.
1098 Foster City Blvd., Suite 106-810, Foster City, CA
94404
Notice of Annual Meeting
and
Proxy Statement
Annual Meeting to be held
on June 22, 2017,
at
No. 8 Bojin Mansion, Floor 12
Chang An District, Guang An Street
Shijiazhuang City, Hebei Province, People’s Republic of
China
at 9:30 a.m. local time.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
ON
JUNE 22, 2017
Dear
Shareholder:
NOTICE
IS HEREBY GIVEN that an Annual Meeting of Shareholders (the
“Annual Meeting”) of Aoxing Pharmaceutical Company,
Inc. is to be held on June 22, 2017 at No. 8 Bojin Mansion, Floor
12, Chang An District, Guang An Street, Shijiazhuang City, Hebei
Province, People’s Republic of China, at 9:30 a.m. local
time. The meeting will be held for the following
purposes:
1.
To elect directors,
each to serve until the next annual meeting of Shareholders or
until each successor is duly elected and qualified;
2.
To ratify the
appointment of BDO China Shu Lun Pan Certified Accountants LLP as
the independent registered public accounting firm for the Company
for the fiscal year ending June 30, 2017; and
3.
To transact such
other business as may properly come before the Annual Meeting and
any adjournments or postponements thereof.
All
shareholders are cordially invited to attend the Annual Meeting;
however, only shareholders of record at the close of business on
May 3, 2017 (“Record Date”) are entitled to notice of
and to vote at the Annual Meeting or any adjournments thereof. A
complete list of these shareholders will be open for the
examination of any shareholder of record at the principal executive
offices of the Company, but will be closed at least 10 days
immediately preceding the Annual Meeting. The list will also be
available for the examination of any shareholder of record present
at the Annual Meeting. The Annual Meeting may be adjourned or
postponed from time to time without notice other than by
announcement at the meeting.
The
Board of Directors recommends that you vote FOR Proposals 1 and
2.
We look
forward to seeing you at the meeting.
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Sincerely,
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/s/
Zhenjiang
Yue
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Name: Zhenjiang
Yue
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Title:
Chairman and Chief Executive Officer
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May 10,
2017
Whether or not you plan to attend the meeting in person, please
complete, sign and date the enclosed proxy and return it promptly
in the enclosed return envelope.
No postage is required if
mailed in the United States. You may also vote your shares by
telephone voting which is explained in further detail on your proxy
card. Shareholders who execute a proxy card may nevertheless attend
the meeting, revoke their proxy and vote their shares in
person.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 22,
2017.
Electronic copies of this proxy statement and proxy card for the
2017 Annual Meeting of Shareholders and are available to you at
http://
www.iproxydirect.com/axn
.
Requests for additional copies of the proxy materials should be
addressed to Investor Relations, Aoxing Pharmaceutical Company,
Inc., 1098 Foster City Blvd., Suite 106-810, Foster City, CA 94404.
This material will be furnished without charge to any shareholder
requesting it.
TABLE OF CONTENTS
Page No.
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INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
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1
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Why did you send me this proxy statement?
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1
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What proposals will be addressed at the meeting?
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1
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Who may attend the meeting?
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1
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Who can vote?
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1
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How many votes do I have?
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1
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Why would the annual meeting be postponed and
adjourned?
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1
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How do I vote by proxy?
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2
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How do I vote in person?
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2
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May I revoke my proxy?
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2
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What vote is required to take action?
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2
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Who is making this solicitation?
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3
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Are there any rights of appraisal?
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3
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Where are the principal executive offices of Aoxing?
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3
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How can I obtain additional information about Aoxing?
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3
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
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4
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Did the directors, executive officers and greater than ten percent
stockholders comply with the Section 16(a) beneficial ownership
reporting requirements in fiscal year 2016?
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4
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PROPOSAL 1
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5
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Compensation of directors and executive officers
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11
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PROPOSAL 2
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14
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REPORT OF THE AUDIT COMMITTEE
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15
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INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED
UPON
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16
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SHAREHOLDER PROPOSALS AND SUBMISSIONS
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16
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OTHER MATTERS
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16
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HOUSEHOLDING OF PROXY MATERIALS
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16
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INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
Why did you send me this proxy statement?
This
proxy statement and the enclosed proxy card are furnished in
connection with the solicitation of proxies by the Board of
Directors of Aoxing Pharmaceutical Company, Inc., a Florida
corporation, for use at the Annual Meeting of its shareholders to
be held on June 22, 2017, at No. 8 Bojin Mansion, Floor 12, Chang
An District, Guang An Street, ShijiaZhuang City, Hebei Province,
People’s Republic of China, at 9:30 a.m. local time, and at
any adjournments or postponements of the Annual Meeting. The
Company first mailed this proxy statement to shareholders on or
about May 10, 2017. This proxy statement summarizes the information
you need to make an informed vote on the proposals to be considered
at the Annual Meeting. However, you do not need to attend the
Annual Meeting to vote your shares. Instead, you may simply
complete, sign and return the enclosed proxy card using the
envelope provided, or vote by telephone as described on the proxy
card. The terms “Aoxing,” “Company,”
“we,” or “our” refer to Aoxing
Pharmaceutical Company, Inc.
What are the proposals to be addressed at this
meeting?
We will
address the following proposals at the Annual Meeting:
1.
To elect directors,
each to serve until the next annual meeting of Shareholders or
until each successor is duly elected and qualified;
2.
To ratify the
appointment of BDO China Shu Lun Pan Certified Accountants LLP as
the independent registered public accounting firm for the Company
for the fiscal year ending June 30, 2017; and
3.
To transact such
other business as may properly come before the Annual Meeting and
any adjournments or postponements thereof.
Who may attend the meeting?
Only
shareholders, their proxy holders, and our invited guests may
attend the Annual Meeting. If you plan to attend, please bring
identification, and, if you hold shares in street name, you should
bring your bank or broker statement showing your beneficial
ownership of Aoxing stock in order to be admitted to the
meeting.
Who can vote?
You can
vote at the Annual Meeting in all matters properly brought before
the Annual Meeting if, as of the close of business on the Record
Date, May 3, 2017, you were a holder of record of our common stock.
On the Record Date, there were 76,209,195 shares of common stock
issued and outstanding.
How many votes do I have?
Each
share of common stock is entitled to one vote on each matter
presented at the Annual Meeting.
Why would the Annual Meeting be postponed or
adjourned?
The
Annual Meeting will be postponed if a quorum is not present on June
22, 2017 at the Annual Meeting. A majority of the shares entitled
to vote, represented in person or by proxy, constitutes a quorum at
a meeting of shareholders. For purposes of determining the presence
of a quorum, abstentions and broker non-votes will be counted as
present. A broker non-vote occurs when a broker or nominee holding
shares for a beneficial owner signs and returns a proxy but does
not vote on a particular proposal because the broker or nominee
does not have discretionary voting power and has not received
instructions from the beneficial owner. If a quorum is not present,
the meeting may be adjourned by those shareholders who are
represented. The meeting may be rescheduled at the time of the
adjournment with no further notice of the rescheduled time. An
adjournment will have no effect on the business to be
conducted.
How do I vote by proxy?
Whether
you plan to attend the Annual Meeting or not, we urge you to
complete, sign and date the enclosed proxy card and return it
promptly in the envelope provided. Returning the proxy card will
not affect your right to attend the Annual Meeting and vote in
person.
If you
properly fill in your proxy card and send it to us in time to vote,
your proxy (one of the individuals named on your proxy card) will
vote your shares as you have directed. If you sign the proxy card
but do not make specific choices, your proxy will vote your shares
as recommended by the Board as follows:
1.
FOR
the election of the director nominees; and
2.
FOR
ratification of the appointment of BDO China Shu Lun Pan Certified
Accountants LLP
If any
other matters are presented, your proxy will vote in accordance
with his best judgment. At the time this proxy statement was
printed, we knew of no matters that needed to be acted on at the
Annual Meeting other than those discussed in this proxy
statement.
How do I vote in person?
If you
plan to attend and vote in person at the Annual Meeting or at a
later date if the meeting is adjourned or postponed, we will give
you a ballot when you arrive. However, if your shares are held in
the name of your broker, bank or other nominee, you must bring a
power of attorney executed by the broker, bank or other nominee
that owns the shares of record for your benefit and authorizing you
to vote the shares.
If your
shares are registered in your name, you are a shareholder of record
with respect to those shares. On the other hand, if your shares are
registered in the name of your broker or bank, your shares are held
in street name and you are considered the “beneficial
owner” of the shares. As the beneficial owner of those
shares, you have the right to direct your broker or bank how to
vote your shares, and you will receive separate instructions from
your broker or bank describing how to vote your
shares.
May I revoke my proxy?
If you
give a proxy, you may revoke it at any time before it is exercised.
You may revoke your proxy in three ways:
1.
You may send in
another proxy with a later date.
2.
You may notify us
in writing (or if the stockholder is a corporation, under its
corporate seal, by an officer or attorney of the corporation) at
our principal executive offices before the Annual Meeting that you
are revoking your proxy.
3.
You may vote in
person at the Annual Meeting.
What vote is required to take action?
Proposal 1
(Election of Directors)
: A plurality of
the eligible votes cast is required to elect director nominees at
the Annual Meeting at which a quorum is present in person or by
proxy. A nominee who receives a plurality means he has received
more votes than any other nominee for the same director’s
seat.
Proposal 2 (Ratification of Auditors):
The affirmative vote of a majority of the shares present, either by
proxy or in person, and entitled to vote is required to approve
this proposal.
Any
shares not voted (whether by abstention or broker non-votes) will
have no impact on the election of directors, except to the extent
that withholding the authority to vote for an individual results in
another individual receiving a larger number of votes. Most brokers
are subject to rules which prohibit them from
“discretionary” voting on certain proposals unless they
receive specific instruction from the beneficial owner to vote on
such matters. Such rules prohibit the brokers to vote with respect
to proposals related to director elections absent such instruction,
but such rules currently do not prohibit the brokers to vote on
proposals related to ratification of accountants in the absence of
such instructions if and as they choose. Your shares will not be
voted in the election for director under Proposal 1 if you hold
your shares in “street name” and do not instruct your
broker how to vote, so please instruct your broker and make your
vote count.
Who is making this solicitation?
The
Board of Directors is soliciting your vote through the use of the
mail and the Company will bear the cost of this solicitation. We
will not employ third party solicitors, but our directors,
officers, employees, and consultants may solicit proxies by mail,
telephone or personal contact. We will reimburse their expenses for
doing this. We will also reimburse brokers, fiduciaries, and
custodians for their costs in forwarding proxy materials to
beneficial owners of our stock. Other proxy solicitation expenses
include those for preparation, mailing, returning, and tabulating
the proxies.
Are there any rights of appraisal?
The
Board is not proposing any action for which the laws of the State
of Florida, our Articles of Incorporation or our Bylaws, as amended
from time to time, provide a right of a shareholder to obtain
appraisal of or payment for such shareholder’s
shares.
Where are the principal executive offices of Aoxing?
Our
principal executive offices are located at Aoxing Pharmaceutical
Company, Inc., 1098 Foster City Blvd., Suite 106-810, Foster City,
CA 94404 and our telephone is 646-367-1747.
How can I obtain additional information about Aoxing?
Copies
of our Annual Report on Form 10-K for the fiscal year ended June
30, 2016, as filed with the Securities and Exchange Commission, are
being sent to all shareholders along with this proxy statement.
Additional copies will be furnished without charge to shareholders
upon written request. Exhibits to the Annual Report will be
provided upon written request. All written requests should be
directed to: Aoxing Pharmaceutical Company, Inc., c/o Investor
Relations, 1098 Foster City Blvd., Suite 106-810, Foster City, CA
94404.
We are
subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, which requires that we file
reports, proxy statements and other information with the SEC. The
SEC maintains a website that contains reports, proxy and
information statements and other information regarding companies,
including Aoxing, that file electronically with the SEC. The
SEC’s website address is http://www.sec.gov. In addition, our
filings may be inspected and copied at the public reference
facilities of the SEC located at 100 F Street, N.E. Washington, DC
20549; and at the SEC’s regional offices at 233 Broadway, New
York, NY 10279 and Citicorp Center, 500 West Madison Street, Room
1400, Chicago, IL 60661. Copies of the material may also be
obtained upon request and payment of the appropriate fee from the
Public Reference Section of the SEC located at 100 F Street, N.E.,
Washington, DC 20549.
YOUR VOTE IS IMPORTANT. EVEN IF YOU PLAN TO ATTEND THE ANNUAL
MEETING, WE ENCOURAGE YOU TO COMPLETE AND RETURN THE ENCLOSED PROXY
CARD TO ENSURE THAT YOUR SHARES ARE REPRESENTED AND VOTED. THIS
BENEFITS THE COMPANY BY REDUCING THE EXPENSES OF ADDITIONAL PROXY
SOLICITATION.
**********************************************
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Set
forth below is information regarding the beneficial ownership of
our common stock as of May 3, 2017, by:
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each person known
to us that beneficially owns more than 5% of our outstanding shares
of common stock;
●
each of our named
executive officers; and
●
all of our current
directors and executive officers as a group.
As of
the Record Date, there were 76,209,195 shares of our common stock
issued and outstanding. Except as otherwise indicated, we believe
that the beneficial owners of the common stock listed below have
sole voting power and investment power with respect to their
shares, subject to community property laws where
applicable.
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Name of
Beneficial Owner
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Amount and Nature of
Beneficial Ownership
(1)
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Percent of
Class
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Zhenjiang
Yue
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12,211,375
(2)
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16.0%
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Jun
Min
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0
(3)
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--
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Guozhu
Xu
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120,000
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0.2%
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Yang
Li
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40,000
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0.1%
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Yuelin
Zhang
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0
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--
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All
directors and officers as a group (7 persons)
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13,673,588
(4)
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17.8%
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American
Oriental Bioengineering, Inc.
(5)
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16,789,203
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22.0%
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___________________
(1)
Unless otherwise
indicated, all shares are held of record as of the Record Date. For
purposes of determining the amount of securities beneficially
owned, share amounts include all common stock owned outright plus
all shares of common stock issuable upon conversion of convertible
notes, or the exercise of options or warrants currently
exercisable, or exercisable within 60 days of the record date. The
Percent of Class is based on the number of shares of the
Company’s common stock outstanding as of the record date.
Shares of common stock issuable upon conversion of convertible
notes, or the exercise of options or warrants currently
exercisable, or exercisable within 60 days of the record date, are
deemed outstanding for the purpose of computing the percentage
ownership of the person holding such options or warrants, but are
not deemed outstanding for computing the percentage ownership of
any other owners. Except as noted, the address of all persons named
in this table is: c/o Aoxing Pharmaceutical Company, Inc., 1098
Foster City Blvd., Suite 106-810, Foster City, CA
94404.
(2)
Includes (i)
10,661,375 shares of common stock held by Mr. Yue, (ii) options to
purchase 50,000 shares owned by Mr. Yue, and (iii) 1,500,000 shares
of common stock held of record by Mr. Yue’s spouse, Cuiying
Hao.
(3)
Does not include
16,789,203 shares owned of record by American Oriental
Bioengineering, Inc., of which Mr. Min is Vice President and a
member of the Board of Directors.
(4)
Includes options
for 440,000 shares owned by officers of the Company.
(5)
The address for
American Oriental BioEngineering, Inc. is 1 Lianshuihe First Ave.,
Beijing E-Town Economic and Technology Development Area, E-Town,
Beijing 100176, People’s Republic of China.
Did the directors, executive officers and greater than ten percent
stockholders comply with the Section 16(a) beneficial ownership
reporting requirements in fiscal year 2015?
Section
16(a) of the Exchange Act requires our officers, directors and
persons who own more than 10% of a registered class of our equity
securities within the specified time periods to file certain
reports of ownership and changes in ownership with the SEC. Based
solely upon a review the Forms 3 and Forms 4 furnished to the
Company pursuant to Rule 16a-3 under the Exchange Act during the
Company’s most recent fiscal year, it is the Company’s
understanding that all required Forms 3 and 4 were filed on a
timely basis during the fiscal year ended June 30, 2016, except
that Yuelin Zhang and Zheng James Chen each failed to file a Form
3.
PROPOSAL 1
ELECTION OF DIRECTORS
The
Nominating and Governance Committee nominated and the Board of
Directors approved and recommended that Zhenjiang Yue, Jun Min,
Guozhu Xu, Yang Li and Yuelin Zhang be elected as our Board of
Directors. All of the nominees are currently members of the Board.
All of the nominees have consented to being named herein and have
indicated their intention to serve as our directors, if elected.
The Board has no reason to believe that any nominee would be unable
or unwilling to serve if elected. Unless authority to do so is
withheld, the persons named as proxies will vote the shares
represented by such proxies for the election of the named director
nominees. In case any of the nominees becomes unavailable for
election to the Board, the persons named as proxies will have full
discretion and authority to vote or refrain from voting for any
other nominees in accordance with their judgment. The Board
nominees, if elected, will serve until the next annual meeting of
shareholders or until each successor is duly elected and qualified,
subject to their earlier resignation or removal.
The Nominees
The
five persons named below are the nominees for election as
Directors. Zhenjiang Yue is an employee of the Company and Jun Min
is an officer of the largest shareholder of the Company. The
Nominating and Corporate Governance Committee has determined that
the other three candidates, Guozhu Xu, Yang Li and Yuelin Zhang,
are independent directors as defined in the applicable
rules for companies traded on the NYSE MKT. Therefore, a
majority of the persons nominated to serve on our Board of
Directors are independent as so defined.
Set
forth below are descriptions of the business experience and other
information regarding the nominees for election to our Board of
Directors:
Zhenjiang Yue,
age 58. In 2000, after
securing the approval of the Hebei Provincial Government, Mr. Yue
established the Hebei Aoxing Group. Since 2000, Mr. Yue has been
employed as the President and General Manager of Hebei Aoxing
Pharmaceutical Co. Ltd. Prior to organizing Hebei Aoxing, Mr. Yue
was engaged in senior management of a number of private
enterprises, including a carpet factory, a precast metal factory,
the Hebei Brewery Plant, and China Aoxing Food & Brewery Co.
Ltd. As a result of his entrepreneurial activities, Mr. Yue was
named “Leader in the Science & Technology Development
Project of the Communist Youth League” and “Youth
Entrepreneur of Hebei Province.” Mr. Yue has also served as
the Vice President of the Pharmaceutical Association of
Shijiazhuang City, the Vice President of the Non-Governmental
Entrepreneur Association of Hebei Province. Mr. Yue’s day to
day leadership, as Chief Executive Officer of the Company, provides
him with intimate knowledge of our operations.
Jun Min
, age 58, was one of the founders
of American Oriental Bioengineering Company, which is the largest
shareholder of Aoxing. Mr. Min has served as Vice President and a
member of Board of Directors of AOB since 2002. Mr. Min has over 20
years of experience in operations management, and has an extensive
knowledge of the consumer and pharmaceutical products industries in
China. Mr. Min earned a Bachelor’s Degree with a
concentration in Business Management from the Harbin Broadcast
& Television University in 1986, and an Executive
Master’s in Business Administration degree from Preston
University in 2005. Mr. Min brings his extensive experience in
operations management in China to the Board and the
Company.
Dr. Guozhu Xu
, age 71,
has, since 1990, been employed as
Director of the China National Drug Dependence Institute at Beijing
University, with responsibility for clinical management. Until
recently, Dr. Xu served as a Committee Member of the Center for
Drug Evaluation at the China State Food and Drug Administration
(“CFDA”). In that role, Dr. Xu was the primary
investigator for over seventy clinical programs in pain management,
representing over 80% of new pain management drugs approved by the
CFDA. Dr. Xu is an associate director of China Drug Abuse
Prevention magazine and has published over 100 articles regarding
drug research and
development.
Dr Xu received his medical degree from Beijing Medical University
in 1970. Dr. Xu brings his technical, industry and operational
expertise to the Board.
Yang Li,
age 37, is a member of the
Institute of Chartered Accountants of Ontario,Canada and a member
of the Institute of Chartered Accountants of Ireland. From 2007 to
2009 Ms. Li was employed as an Associate Auditor by
PricewaterhouseCoopers LLP, one of the big four accounting firm.
She led an audit team to provide audit services for many U.S. and
Canadian public companies. From 2003 to 2007, Ms. Li was employed
as Senior Auditor by Sherry McNabola Murray & Co., a firm of
chartered accountants located in Dublin, Ireland. After her return
to China, she has been self-employed. Her activities have included
assisting a Chinese company in successfully listing in the U.S.
market, and leading a team that provided audit and tax services to
many state-owned enterprises. In 2003 Ms. Li was awarded a Masters
Degree in Accounting by the University College Dublin of the
National University of Ireland. Ms. Li brings to the Board a
thorough understanding of U.S. accounting principles and practices,
and the knowledge of business gained from her experience as an
auditor.
Yuelin Zhang
, age 61, brings to the
board more than 30 years of experience in the pharmaceuticals
industry in China. Mr. Zhang has been the general manager for
Shijiazhuang Xinantai Pharmaceutical Logistics Limited since 2012.
From 2007 to 2012 Mr. Zhang was employed as deputy general manager
by Hebei Fuge Pharmaceutical Limited. Prior to joining Hebei Fuge
Pharmaceutical Limited, Mr. Zhang had been general manager for
Shijiazhuang Yuanzheng Keyun Limited and, before that, Wuji Huamao
Pharmaceutical Limited.
Director and Board Nominee Independence
Our
Board is subject to the independence requirements of the NYSE MKT
LLC. Pursuant to the requirements, the Nominating and Corporate
Governance Committee of the Board undertakes an annual review of
director independence. During this review, the Committee considers
transactions and relationships between each director or any member
of his immediate family and Aoxing and its affiliates, including
those transactions that are contemplated under Item 404(a) of
Regulation S-K. The purpose of this review was to determine whether
any such relationships or transactions existed that were
inconsistent with a determination that the director is independent.
Based on this review, the Committee has determined that two of our
directors are not “independent” as defined by the
listing standards of the NYSE MKT Company Guide: Zhenjiang Yue and
Jun Min. Accordingly, neither Mr. Yue nor Mr. Jun serves on the
Audit, Nominating, or Compensation Committees. The Nominating and
Corporate Governance Committee has also determined that the members
of the Audit Committee are “independent” for purposes
of Section 10A-3 of the Exchange Act and Section 803 of the NYSE
MKT Company Guide. The Committee based these determinations
primarily on a review of the responses of the directors and
executive officers to questions regarding employment and
transaction history, affiliations and family and other
relationships and on discussions with the directors.
Membership, Meetings and Attendance
The
Board of Directors oversees the business affairs of Aoxing and
monitors the performance of management. Members of the Board of
Directors discussed various business matters informally on numerous
occasions throughout the fiscal year ended June 30, 2016. The Board
held eleven meetings during fiscal 2016. Each director attended at
least 75% of the total number of meetings of the
Board.
Our
Board has three committees: Audit Committee, Compensation
Committee, and the Nominating and Corporate Governance Committee.
The membership and responsibilities of these current committees are
summarized below. Additional information regarding the
responsibilities of each committee is found in, and is governed by,
our Bylaws, as amended, each committee’s Charter, specific
directions of the Board, and certain mandated regulatory
requirements. The Charters of the Audit, Compensation, and
Nominating and Corporate Governance Committees, as well as the Code
of Ethics, are available at the Company’s website at
http://www.aoxingpharma.com.
The
information on the Company’s website is not a part of this
proxy statement.
The information is also available in print
to any shareholder who requests it.
Below
are the current committee memberships and other information about
the Board committees. The membership of each of the standing
committees of the Board is comprised solely of independent
directors, as described below.
|
Name
|
|
Audit
Committee
|
|
Compensation
Committee
|
|
Nominating and
Corporate Governance Committee
|
|
Yang
Li
|
|
Chair
(1)
|
|
Member
|
|
Member
|
|
Guozhu
Xu
|
|
Member
|
|
Chair
|
|
Chair
|
|
Yuelin
Zhang
(2)
|
|
Member
|
|
Member
|
|
Member
|
|
Number
of Meetings in 2016
|
|
4
|
|
3
|
|
3
|
(1)
Audit Committee
financial expert.
(2)
Yuelin Zhang joined
the Board and was appointed to its Committees in June
2016.
Audit Committee
Yang Li
currently serves as Chairman of the Audit Committee. The Board has
determined that Yang Li is an audit committee financial expert as
defined by Item 407(d)(5) of Regulation S-K under the Securities
Act and is “independent” within the meaning of Item
7(d)(3)(iv) of Schedule 14A under the Exchange Act. Guozhu Xu and
Yuelin Zhang are the other members of the Audit Committee. The
Board has determined that each of the members of the Audit
Committee satisfies the independence requirements of the NYSE
MKT.
The
purposes of the Audit Committee are to assist the Board in its
general oversight of Aoxing’s financial reporting, internal
controls and audit functions. As described in the Audit Committee
Charter, the Audit Committee’s primary responsibilities are
to oversee on behalf of the Board:
●
the Company’s
accounting financial reporting processes and the integrity of its
financial statements;
●
the audits of the
Company’s financial statements and the appointment,
compensation, qualification, independence and performance of the
Company’s independent auditors;
●
the Company’s
compliance with legal and regulatory requirement; and
●
the performance of
the Company’s internal audit function and internal control
over financial reporting.
The
Audit Committee also has the purpose of preparing the Audit
Committee Report that SEC rules require the Company to include in
its annual proxy statement. The Audit Committee’s function is
one of oversight only and does not relieve management of its
responsibilities for preparing financial statements that accurately
and fairly present the Company’s financial results and
conditions, nor the independent auditors of their responsibilities
to the audit or review of financial statements.
Compensation Committee
The
purpose of the Compensation Committee is to assist the Board in
determining the compensation of the Chief Executive Officer and
make recommendations to the Board with respect to the compensation
of the Chief Financial Officer, other executive officers of the
Company and the independent directors. In furtherance of this
purpose, the Compensation Committee has the following authority and
responsibilities:
●
annually review the
Company’s corporate goals and objectives relevant to the
CEO’s compensation;
●
evaluate the
CEO’s performance in light of such goals and objectives; and,
either as a Compensation Committee or, together with the other
independent directors (as directed by the Board), determine and
approve the CEO’s compensation level based on this
evaluation;
●
annually review and
make recommendations to the Board with respect to non-CEO executive
officer and independent director compensation to assist the Board
in making the final determination as to non-CEO executive officer
and independent director compensation;
●
establish
measurements that will ensure that the Company’s compensation
program is effective in attracting and retaining key employees,
reinforce business strategies and objectives for enhanced
stockholder value, and administer the compensation program in a
fair and equitable manner consistent with established policies and
guidelines;
●
make
recommendations to the Board with respect to the Company’s
incentive-compensation plans and equity-based plans that are
subject to the Board’s approval;
●
make
recommendations to the Board regarding approval, disapproval,
modification, or termination of existing or proposed employee
benefit plans; approve any stock option award or any other type of
award as may be required for complying with any tax, securities, or
other regulatory requirement, or otherwise determined to be
appropriate or desirable by the Compensation Committee or
Board;
●
review and approve
the compensation disclosure and analysis prepared by the
Company’s management, as required to be included in the
Company’s proxy statement or annual report on Form 10-K filed
with the SEC;
●
produce a
Compensation Committee report on executive officer compensation as
required by the SEC to be included in the Company’s proxy
statement or annual report on Form 10-K filed with the
SEC.
The CEO
of the Company may not be present during voting or deliberations of
the Compensation Committee with respect to his compensation. The
Committee may retain and receive advice, in its sole discretion,
from compensation consultants. The Compensation Committee does not
currently employ compensation consultants in determining or
recommending the amount or form of executive and director
compensation. None of the members of our Compensation Committee is
one of our officers or employees. None of our executive officers
currently serves, or in the past year has served, as a member of
the board of directors or compensation committee of any entity that
has one or more executive officers serving on our Board or
Compensation Committee.
Nominating and Corporate Governance Committee
The
Nominating and Corporate Governance Committee has the following
responsibilities as set forth in its charter:
●
to review and
recommend to the Board with regard to policies for the composition
of the Board;
●
to review any
director nominee candidates recommended by any director or
executive officer of the Company, or by any shareholder if
submitted properly;
●
to identify,
interview and evaluate director nominee candidates and have sole
authority to retain and terminate any search firm to be used to
assist the Committee in identifying director candidates and approve
the search firm’s fees and other retention
terms;
●
to recommend to the
Board the slate of director nominees to be presented by the
Board;
●
to recommend
director nominees to fill vacancies on the Board, and the members
of each Board committee;
●
to lead the annual
review of Board performance and effectiveness and make
recommendations to the Board as appropriate; and
●
to review and
recommend corporate governance policies and principles for the
Company, including those relating to the structure and operations
of the Board and its committees.
Shareholders
meeting the following requirements who want to recommend a director
candidate may do so in accordance with our Bylaws and the following
procedures established by the Nominating and Corporate Governance
Committee. The Board will consider all director candidates
recommended to the Nominating and Corporate Governance Committee by
shareholders owning at least 5% of our outstanding shares at all
times during the year preceding the date on which the
recommendation is made that meet the qualifications established by
the Board. To make a nomination for director at an Annual Meeting,
a written nomination solicitation notice must be received by the
Nominating and Corporate Governance Committee at our principal
executive office not less than 120 days before the anniversary date
our proxy statement was mailed to shareholders in connection with
our previous annual meeting. The written nomination solicitation
notice must contain the following material elements, as well as any
other information reasonably requested by us or the Nominating and
Corporate Governance Committee:
●
the name and
address, as they appear on our books, of the stockholder giving the
notice or of the beneficial owner, if any, on whose behalf the
nomination is made;
●
a representation
that the stockholder giving the notice is a holder of record of our
common stock entitled to vote at the annual meeting and intends to
appear in person or by proxy at the annual meeting to nominate the
person or persons specified in the notice;
●
complete biography
of the nominee, as well as consents to permit us to complete any
due diligence investigations to confirm the nominee’s
background, as we believe to be appropriate;
●
the disclosure of
all special interests and all political and organizational
affiliations of the nominee;
●
a signed, written
statement from the director nominee as to why the director nominee
wants to serve on our Board, and why the director nominee believes
that he or she is qualified to serve;
●
a description of
all arrangements or understandings between or among any of the
stockholder giving the notice, the beneficial owner, if any, on
whose behalf the notice is given, each nominee and any other person
or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder giving
the notice;
●
such other
information regarding each nominee proposed by the stockholder
giving the notice as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the SEC had the
nominee been nominated, or intended to be nominated, by our Board;
and
●
the signed consent
of each nominee to serve as a director if so elected.
In
considering director candidates, the Nomination and Governance
Committee will consider such factors as it deems appropriate to
assist in developing a Board and committees that are diverse in
nature and comprised of experienced and seasoned advisors who can
bring the benefit of various backgrounds, skills and insights to
the Company and its operations. Candidates whose evaluations are
favorable are then chosen by the Nominating and Governance
Committee to be recommended for selection by the full Board. The
full Board selects and recommends candidates for nomination as
directors for shareholders to consider and vote upon at the annual
meeting. Each director nominee is evaluated in the context of the
full Board’s qualifications as a whole, with the objective of
establishing a Board that can best perpetuate our success and
represent stockholder interests through the exercise of sound
judgment. Each director nominee will be evaluated considering the
relevance to us of the director nominee’s skills and
experience, which must be complimentary to the skills and
experience of the other members of the Board. The Nominating and
Governance Committee does not have a formal policy with regard to
the consideration of diversity in identifying director candidates,
but seeks a diverse group of candidates who possess the background,
skills and expertise to make a significant contribution to the
Board, to the Company and its shareholders.
Board Leadership Structure and Role in Risk Oversight
Zhenjiang Yue is
our Chief Executive Officer and Chairman of our Board. It is Mr.
Yue’s opinion that a shareholder who is active and involved
in the business, as is currently the case, should hold both roles.
The opinion is fully shared by our Board because Mr. Yue is the
director most familiar with the Company’s business and
industry, and most capable of effectively identifying strategic
priorities and leading the discussion and execution of strategy. In
addition, the Board believes that combining the role of Chairman
and Chief Executive Officer is in the best interest of shareholders
because it provides the appropriate balance between strategy
development and independent oversight of management.
Independent
directors and management have different perspectives and roles in
strategy development. The Company’s independent directors
bring experience, oversight and expertise from outside the company
and industry, while the Chief Executive Officer promotes strategy
development and execution, and facilitates information flow between
management and the Board, which are essential to effective
governance. Yang Li, Chairman of our Audit Committee, and Guozhu Xu
and Yuelin Zhang are all independent directors. As independent
directors, they prepare agendas and maintain contact between the
Board and managements of the Company. Our Board believes this
arrangement has and continues to serve the best interests of the
Company’s shareholders. The Board considered whether the
current leadership structure continues to be appropriate for the
Company. The Board believes that directors should be responsive to
the Company’s evolving circumstances and objectives and
therefore may in the future modify the Board’s leadership
structure when and as necessary.
The
Board views its role in the Company’s risk oversight process
in receiving regular reports from members of senior management on
areas of material risk to the Company, including strategic,
operational, reporting and compliance risks. The full Board (or the
appropriate standing committee of the Board in the case of risks
that are under the purview of a particular committee) is to receive
these reports from the appropriate the party within the
organization that is responsible for a particular risk or set of
risks to enable it to understand our risk identification,
management and mitigation strategies. During its regular course of
its activities, our Audit Committee discusses our policies with
respect to risk assessment and risk management. The Compensation
Committee and the Board each discuss the relationship between our
compensation policies and corporate risk to assess whether these
policies encourage excessive risk-taking by executives and other
employees.
Shareholder Communications with Directors
We have
no formal written policy regarding communication with the Board.
Persons wishing to write to the Board or to a specified director or
committee of the Board should send correspondence to the Secretary
at our executive offices. Electronic submissions of shareholder
correspondence will not be accepted. The Secretary will forward to
the directors all communications that, in his judgment, are
appropriate for consideration by the directors. Examples of
communications that would not be appropriate for consideration by
the directors include commercial solicitations and matters not
relevant to the shareholders, to the functioning of the Board, or
to the affairs of Aoxing. Any correspondence received that is
addressed generically to the Board will be forwarded to the
Chairman of the Board. If the Chairman of the Board is not an
independent director, a copy will be sent to the Chairman of the
Audit Committee as well.
Board Member Attendance at Annual Meetings
All
current Board members and all nominees for election to our Board
are expected to attend our Annual Meetings unless personal
circumstances make the Board member or director nominee attendance
impracticable or inappropriate.
Code of Ethics
Our
Board has adopted a Code of Ethics applicable to all directors,
officers and employees which complies with Section 807 of the NYSE
MKT Company Guide and with the definition of a “code of
ethics” as set forth in Item 406 of SEC Regulation
S-K.
Executive Officers of Aoxing
The
following table sets forth the names and ages of the persons who,
in addition to our Chairman and Chief Executive Officer, are our
executive officers as of May 10, 2017.
|
Name
|
|
Age
|
|
Position(s) with
the Company
|
|
Z.
James Chen
|
|
51
|
|
Chief
Financial Officer
|
|
Guoan
Zhang
|
|
47
|
|
Senior
Vice President - Finance
|
|
Guirong
Zhou
|
|
63
|
|
President
of Research & Development
|
Biographical
information with respect to the Company’s current executive
officers is provided below.
Dr. Zheng James Chen
joined Aoxing
Pharma in 2016. From 2012 to 2016 Dr. Chen was employed as the CFO
of Origin Agritech Limited (NASDAQ: SEED), an agricultural
biotechnology company headquartered in Beijing.. From 2008 to 2012
Dr. Chen was employed as an investment manager by Abu Dhabi
Investment Authority. From 2003 to 2008 Dr. Chen worked as an
equity research analyst with three investment banking firms:
Fulcrum Group Partners, Morgan Joseph and BB&T Capital Markets.
Dr. Chen is currently a Director and the Chairman of the Audit
Committee of the Board of Directors of China Finance Online
(NASDAQ: JRJC), and the Chairman of the Board of Supervisors of
Linjiang Chemicals, which is listed on the New Third Board in
China. Dr. Chen received his Ph.D. Degree in Chemical Engineering
from the University of Connecticut in 1996 and his M.B.A degree
from New York University in 2004.
Guoan Zhang
has been the Company’s
Senior Vice President of Finance since June 2010 and Chief
Accounting Officer since March 2010. Mr. Zhang also served as the
Company's Acting Chief Financial Officer from July 2012 to December
2014. Prior to the appointment of Mr. Zhang as the Company’s
Chief Accounting Officer, Mr. Zhang was the Senior Director of
Financial Operations of the Company between January 2009 and
February 2010. Mr. Zhang was Vice General Manager of Finance of LRT
between 2007 and 2008. Mr. Zhang graduated from Heilongjiang School
of Business and he is a Certified Public Accountant in
China.
Guirong Zhou
was appointed President of
Research and Development in July 2012. Prior to that, she was
deputy director in our R&D department. Ms Zhou joined the
company in 2011 from Shijiazhuang Pharmaceutical Company, where she
worked since 1985 and held various senior positions, especially in
R&D. Ms Zhou has been involved in the registration of many new
drug certificates and product licenses, including tablet,
injection, transfusion, soft capsule, drop pills, lyophilized
powder, quick release preparation and control release preparation.
Among other achievements, Ms Zhou was the project leader in
bringing to market Pentoxifylline Sustained Release Tablets and
Acemetacine capsule, which are now leading products in China. Ms
Zhou is an academic advisor in pharmaceutical engineering at
Tianjin University and Hebei University of Science and
Technology.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Summary Compensation Table
The
following table sets forth all compensation paid by Aoxing
Pharma and its subsidiaries to Zhenjiang Yue for services as
Chief Executive Officer during the years ended June 30, 2016, 2015
and 2014 and to Zheng James Chen for services as Chief Financial
Officer during the year ended June 30, 2016. There was
no other executive officer whose total salary and bonus for the
fiscal year ended June 30, 2016 exceeded $100,000.
|
|
Fiscal
Year
|
|
Salary
|
|
Bonus
|
|
Stock
Award
|
|
Option
Award
|
|
Other
|
|
Total
|
|
Zhenjiang
Yue
|
2016
|
|
$155,316
(1)
|
|
--
|
|
--
|
|
50,000
(4)
|
|
--
|
|
$155,316
|
|
|
2015
|
|
$162,729
(2)
|
|
--
|
|
--
|
|
--
|
|
--
|
|
$162,729
|
|
|
2014
|
|
$162,689
(3)
|
|
--
|
|
--
|
|
--
|
|
--
|
|
$162,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zheng
James Chen
|
2016
|
|
$137,500
(5)
|
|
--
|
|
--
|
|
300,000
(6)
|
|
--
|
|
$178,072
|
(1)
The dollar
equivalent of 1,000,000 RMB, based on the exchange rate of 6.4385
RMB per dollar
(2)
The dollar
equivalent of 1,000,000 RMB, based on the exchange rate of 6.1452
RMB per dollar.
(3)
The dollar
equivalent of 1,000,000 RMB, based on the exchange rate of 6.1467
RMB per dollar.
(4)
Options for 50,000
shares at $0.64 exercise price, vested immediately.
(5)
Zheng James Chen
was first employed as CFO on February 1, 2016.
(6)
Options for
300,000 shares at $0.71 exercise price, vesting over three
years.
None of
our named executives participates in or has account balances in
qualified or non-qualified defined benefit, defined contribution or
other deferred compensation plans sponsored by us.
Equity Grants
The
following tables set forth certain information regarding the stock
options acquired by the Company’s Chief Executive Officer or
Chief Financial Officer during the year ended June 30, 2016 and
those options held by either of them on June 30, 2016.
Option Grants in the Last Fiscal Year
|
|
Number of
securities underlying Unexercised options
(#)exercisable
|
|
Number of
Securities Underlying Unexercised Options (#)
unexercisable
|
|
Option Exercise
Price ($)
|
|
Option
Expiration Date
|
|
Zhenjiang Yue
|
--
|
|
--
|
|
--
|
|
--
|
|
Z. James Chen
|
--
|
|
300,000
|
|
$0.71
|
|
January
28, 2021
|
Employment Contracts, Termination of Employment and
Change-in-Control Arrangements
The
Company has employment agreements with its Chief Executive Officer
and with its Chief Financial Officer. The following are description
of the agreements.
Employment Agreement dated as of January 13,
2010 with Zhenjiang Yue.
This agreement provides that Mr.
Yue will serve as the Company’s Chief Executive Officer. The
Company agreed to pay Mr. Yue an annual salary of 1 million Chinese
Yuan (approximately US$145,000). The Company may also pay him a
cash bonus, within the discretion of the Board. In addition,
subject to the approval of the Board, Mr. Yue is eligible to
receive equity based award in the form of restricted common stock,
stock option or other securities by the Company from time to time.
The term of the agreement ended on January 13, 2016, but it will be
renewed for consecutive one year terms unless affirmatively
terminated by either party. The Company can terminate the agreement
at any time without cause, but will be liable for six months’
severance pay. The agreement contains a covenant of non-competition
by Mr. Yue for one year after termination, unless he is terminated
without cause or he terminates for good reason.
Employment Agreement dated as of January 28,
2016 with Z. James Chen.
This agreement provides that Dr.
Chen will serve as the Company’s Chief Financial Officer. The
Company agreed to pay Dr. Chen an annual salary of $330,000 per
year. Dr. Chen is entitled to choose to receive common stock in
lieu of salary for one or more periods of one, three or six months,
with the shares valued at market price at the beginning of each
such period. The Company also granted Dr. Chen options to purchase
300,000 shares at $.71 per share, with options for 100,000 shares
vesting at the end of each year of employment. The term of the
agreement ends on January 28, 2019. The Company can terminate the
agreement at any time without cause, but will be liable for two
months’ severance pay. The agreement
contains a covenant of non-competition by Dr, Chen during the
employment period.
Compensation of Directors
The
members of the Board receive remuneration in cash and/or restricted
shares of the common stock for the period of their duties as shown
below:
●
No compensation
for Zhenjiang Yue or Jun Min.
●
RMB 4000 per month
and 20,000 shares of common stock annually for Yang Li, Guozhu Xu
and Yuelin Zhang.
The
following table sets forth all compensation paid or to be paid by
the Company, as well as certain other compensation paid
or accrued, for each of the directors for the fiscal year ended
June 30, 2016. The Board members have the option of receiving fees
earned in cash or restricted stock.
|
Name
|
|
Fees Earned or
Paid in Cash ($)
|
|
Stock Awards
($)
|
|
All Other
Compensation ($)
|
|
Total
($)
|
|
Zhenjiang
Yue
|
|
--
|
|
--
|
|
--
|
|
--
|
|
Jun
Min
|
|
--
|
|
--
|
|
--
|
|
--
|
|
Guozhu
Xu
|
|
7,455
|
|
8,061
|
|
--
|
|
15,516
|
|
Yang
Li
|
|
7,455
|
|
8,061
|
|
--
|
|
15,516
|
|
Yuelin
Zhang
(1)
|
|
--
|
|
--
|
|
--
|
|
--
|
___________________________________
(1)
Yuelin Zhang was
elected to the Board of Directors on June 23, 2016.
Stock Option Plan
In
2016, the Company’s Board of Directors and the shareholders
adopted the 2016 Stock Incentive Plan. The Plan authorized the
Board to issue up to 3,500,000 common shares during the ten year
period of the Plan. The shares may be awarded to employees or
directors of the Company or its subsidiaries as well as to
consultants to those entities. The shares may be awarded as
outright grants or in the form of options, restricted stock or
performance shares. We believe that the making of awards under the
Plan promotes the success and enhances Aoxing’s value by
providing the recipient with an incentive for outstanding
performance. The Plan is further intended to provide flexibility to
us in our ability to motivate, attract, and retain the services of
personnel upon whose judgment, interest, and special effort the
successful conduct of our operation is largely dependent. The
Compensation Committee determines the number of shares of stock
granted to a participant and may subject any grant to performance
requirements, vesting provisions, transfer restrictions and other
restrictions and conditions as the Compensation Committee may
determine in its sole discretion.
Securities Authorized for Issuance under Equity Compensation
Plans
The
information set forth in the table set forth below regarding equity
compensation plans (which include individual compensation
arrangements) was determined as of June 30, 2016.
|
|
Number of
Securities to Be Issued Upon Exercise of Outstanding Options,
Warrants, and Rights
|
Weighted Average
Exercise Price of Outstanding Options, Warrants, and
Rights
|
Number of
Securities Remaining Available for Future Issuance under equity
compensation plans
|
|
Equity compensation
plans approved by security holders
|
590,000
|
$
0.64
|
2,910,000
|
|
|
|
|
|
|
Equity compensation
plans not approved by security holders
|
300,000
|
$
0.71
|
--
|
|
TOTAL
|
132,000
|
$
0.66
|
2,910,000
|
Transactions with Related Persons
During
the 2016 fiscal year, we were not involved in any related party
transactions subject to Item 404 of Regulation S-K. Pursuant to
Board policies, our executive officers and directors, and principal
shareholders, including their immediate family members and
affiliates, are not permitted to enter into a related party
transaction without the prior consent of the Board. Any request for
such related party transaction with an executive officer, director,
principal stockholder, or any of such persons’ immediate
family members or affiliates, in which the amount involved exceeds
$120,000 must first be presented to the Audit Committee and the
Board for review, consideration and approval. All of our directors,
executive officers and employees are required to report to the
Board any such related party transaction. In approving or rejecting
the proposed agreement, the Board will consider the relevant facts
and circumstances available and deemed relevant to the Board which
will approve only those agreements that, in light of known
circumstances, are in, or are not inconsistent with, our best
interests, as the Board determines in the good faith exercise of
its discretion.
Vote Required for Approval of Proposal 1; Board
Recommendation
A
plurality of the eligible votes cast is required to elect director
nominees at the Annual Meeting at which a quorum is present in
person or by proxy. A nominee who receives a plurality means he has
received more votes than any other nominee for the same
director’s seat.
The
Board recommends a vote
FOR
election of each of the director nominees.
******************
PROPOSAL 2
RATIFICATION OF AUDITOR
General
The
Company has selected the firm of BDO China Shu Lun Pan Certified
Accountants LLP (“BDO China Shu Lun Pan”) to audit the
financial statements for the fiscal year ending June 30, 2017 and
seeks shareholder ratification of said appointment. The Audit
Committee, which has selected BDO China Shu Lun Pan to serve as our
independent auditors, believes that BDO China Shu Lun Pan has the
personnel, professional qualifications and independence necessary
to act as the Company’s independent auditors. A
representative of BDO China Shu Lun Pan will be in attendance at
the Annual Meeting, either in person or by telephone. The
representative will have the opportunity to make a statement if he
or she desires to do so and will be available to respond to
appropriate questions from shareholders.
The
ratification by our shareholders of the Audit Committee’s
selection of independent public accountants is not mandated by
Delaware law, our bylaws or other legal requirements. However, the
Audit Committee is submitting its selection of BDO China Shu Lun
Pan to our shareholders for ratification this year. If the
selection of BDO China Shu Lun Pan is ratified by our shareholders
at the Annual Meeting, the Audit Committee, in its discretion,
nevertheless may select and appoint a different independent
accounting firm at any time. If the shareholders do not ratify the
selection of BDO China Shu Lun Pan, the Audit Committee will
reconsider the retention of that firm, but the Audit Committee
would not be required to select another firm as independent public
accountants and may nonetheless retain BDO China Shu Lun Pan. If
the Audit Committee does select another firm to serve as the
Company’s independent public accountants, whether or not the
shareholders have ratified the selection of BDO China Shu Lun Pan,
the Audit Committee would not be required to call a special meeting
of the shareholders to seek ratification of the selection, and in
all likelihood would not call a special meeting for that purpose.
In all cases, the Audit Committee will make any determination as to
the selection of the Company’s independent public accountants
in light of the best interests of the Company and its
shareholders.
Audit Fees
Our
current principal independent auditor is BDO China Shu Lun Pan
Certified Accountants LLP. The following table presents fees for
professional services rendered by BDO China Shu Lun Pan Certified
Accountants LLP with respect to the fiscal years ended June 30,
2016 and 2015.
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Services
Performed
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Audit Fees
(1)
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$
148,000
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$
148,000
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Audit-Related Fees
(2)
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--
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--
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Tax Fees
(3)
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--
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--
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All Other Fees
(4)
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--
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--
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Total
Fees
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$
148,000
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$
148,000
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(1)
Audit fees
represent fees billed for professional services provided in
connection with the audit of the Company’s annual financial
statements, reviews of its quarterly financial statements, and
audit services provided in connection with statutory and regulatory
filings for those years. All work on the engagements to audit the
Company’s financial statements for the years ended June 30,
2016 and 2015 was performed by full-time permanent employees of BDO
China Shu Lun Pan Certified Accountants LLP.
(2)
Audit-related fees
represent fees billed primarily for assurance and related services
not reported under Audit fees.
(3)
Tax fees
principally represent fees billed for tax preparation, tax advice
and tax planning services.
(4)
All other fees
principally would include fees billed for products and services
provided by the accountant, other than the services reported under
the three captions above.
Our Audit
Committee has the sole authority to pre-approve all audit and
non-audit services provided by our independent accountants. The
Audit Committee must pre-approve services provided by the
independent accountants. The Audit Committee, on an annual basis,
reviews audit and non-audit services performed by the independent
accountants. All audit and non-audit services are pre-approved by
the Audit Committee, which considers, among other things, the
possible effect of the performance of such services on the
accountants’ independence. As permitted under the
Sarbanes-Oxley Act of 2002, the Audit Committee may delegate
pre-approval authority to one or more of its members. Any service
pre-approved by a delegate must be reported to the Audit Committee
at the next scheduled quarterly meeting. The Audit Committee
considered whether the provision of the auditors’ services,
other than for the annual audit and quarterly reviews, is
compatible with its independence and concluded that it is
compatible. In fiscal years 2016 and 2015, all such services were
pre-approved by the Audit Committee.
Vote Required for Approval of Proposal 2; Board
Recommendation
The
affirmative vote of a majority of the shares present, either by
proxy or in person, and entitled to vote is required to approve
this proposal.
The
Board recommends a vote
FOR
this Proposal 2.
******************
REPORT OF THE AUDIT COMMITTEE
The
Audit Committee has reviewed and discussed with Aoxing's management
and BDO China Shu Lun Pan Certified Accountants LLP (“BDO
China Shu Lun Pan ”), the Company’s independent
registered public accounting firm for the fiscal year ended June
30, 2016, together and separately, the audited financial statements
contained in the Company‘s Annual Report on Form 10-K for the
2016 fiscal year.
The
Audit Committee has also discussed with BDO China Shu Lun Pan the
matters required to be discussed by Statement on Auditing Standards
No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU
Section 380), as adopted by the Public Company Accounting Oversight
Board, or PCAOB, in Rule 3200T. The Audit Committee also received
and reviewed the written disclosures and the letter from BDO China
Shu Lun Pan required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees) and has discussed
with BDO China Shu Lun Pan its independence from the
Company.
Based
on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board has
approved, that the audited financial statements be included in the
Company’s Annual Report on Form 10-K for the fiscal year
ended June 30, 2016, for filing with the Securities and Exchange
Commission.
Submitted by the
Audit Committee.
Yang
Li, Chairman
Guozhu
Xu
Yuelin
Zhang
Interest of Certain Persons in Matters to be Acted
Upon
Management is not
aware of any substantial interest, direct or indirect, by
securities holdings or otherwise of any officer, director, nominee
for director, or associate of the foregoing persons in any matter
to be acted on, as described herein, other than the interests
specifically described in the Proposals.
Shareholder Proposals and Submissions for Inclusion in the Proxy
Statement
for the 2018 Annual Meeting of Shareholders
We
presently intend to hold our next annual meeting of Shareholders in
June 2018. A proxy statement and notice of the 2018 Annual Meeting
will be mailed to all shareholders approximately one month prior to
that date. Shareholder proposals must be received at our principal
executive offices located at
1098
Foster City Blvd., Suite 106-810, Foster City, CA 94404
no
later than 120 days prior to the first anniversary of the mailing
date of this Proxy Statement; provided, however, that in the event
that the date of the next annual meeting is advanced by more than
30 days from the anniversary date of the 2017 Annual Meeting,
notice by the shareholder must be received no later than the close
of business on the 10th day following the earlier of the date on
which notice of the date of the meeting was mailed or public
disclosure was made. All shareholder proposals received after the
deadline will be considered untimely and will not be included in
the proxy statement for the next annual meeting.
Other Matters
The
Board knows of no other matters which will come before the meeting.
However, if any matters other than those set forth in the notice
should be properly presented for action, the persons named in the
proxy intend to take such action as will be in harmony with the
policies of the Company and will use their discretion.
Householding of Proxy Materials
The SEC has
adopted rules that permit companies and intermediaries such as
brokers to satisfy delivery requirements for proxy statements with
respect to two or more shareholders sharing the same address by
delivering a single proxy statement addressed to those
shareholders. This process, which is commonly referred to as
“house holding,” potentially provides extra convenience
for shareholders and cost savings for us. If you are now receiving
multiple copies of our proxy materials and would like to have only
one copy of these documents delivered to your household in the
future, please call, email or write to us at (646) 367-1747,
investorrelations@aoxingpharma.com, or Aoxing Pharmaceutical
Company, Inc., 1098 Foster City Blvd., Suite 106-810, Foster City,
CA 94404, Attention: Investor Relations.
Exhibits set forth
in the Company’s Annual Report of Form 10-K for fiscal year
ended June 30, 2016 filed on October 5, 2016 will be sent to
shareholders by first class mail, without charge, within one day of
the Company’s receipt of a written or oral request for said
exhibits. To request exhibits, please send your written request to
Aoxing Pharmaceutical Company, Inc., 1098 Foster City Blvd., Suite
106-810, Foster City, CA 94404, Attention: Investor
Relations.
* * * *
*
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AOXING PHARMACEUTICAL COMPANY, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
ANNUAL
MEETING OF STOCKHOLDERS –JUNE 22, 2017 AT 9:30
A.M.
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CONTROL ID:
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REQUEST ID:
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The
undersigned hereby appoints Zhenjiang Yue and Zheng James Chen, or
either of them, proxies with power of substitution and hereby
authorizes either of them to represent and to vote, as designated
below, all of the shares of common stock of the Company held of
record by the undersigned on May 3, 2017 at the Annual Meeting of
Shareholders to be held on June 22, 2017, at No. 8 Bojin Mansion,
Floor 12, Chang An District, Guang An Street, Shijiazhuang City,
Hebei Province, PRC, at 9:30 a.m. local time, and at all
adjournments thereof, with all powers the undersigned would possess
if personally present. In their discretion, the proxies are
authorized to vote upon such other business as may properly come
before the Annual Meeting.
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(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
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VOTING INSTRUCTIONS
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If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
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MAIL:
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Please
mark, sign, date, and return this Proxy Card promptly using the
enclosed envelope.
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FAX:
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Complete
the reverse portion of this Proxy Card and Fax to
202-521-3464.
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INTERNET:
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https://www.iproxydirect.com/axn
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PHONE:
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1-866-752-VOTE(8683)
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ANNUAL MEETING OF THE STOCKHOLDERS OFAOXING PHARMACEUTICAL COMPANY,
INC.
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PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE:
☒
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PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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Proposal 1
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FOR
ALL
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AGAINST
ALL
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FOR ALL
EXCEPT
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To
elect directors:
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☐
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☐
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Zhenjiang
Yue
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☐
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Jun
Min
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☐
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CONTROL
ID:
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Guozhu
Xu
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☐
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REQUEST
ID:
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Yang
Li
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☐
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Yuelin
Zhang
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☐
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Proposal 2
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FOR
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AGAINST
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ABSTAIN
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To
ratify the appointment of BDO China Shu Lun Pan Certified
Accountants LLP as independent registered public accounting firm
for the fiscal year ended June 30, 2017.
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☐
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☐
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☐
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MARK “X” HERE IF YOU PLAN
TO ATTEND THE MEETING:
☐
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MARK
HERE FOR ADDRESS CHANGE
☐
New Address (if
applicable):
________________________________________________
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IMPORTANT:
Please sign exactly as your name or names appear
on this Proxy. When shares are held jointly, each holder should
sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership,
please sign in partnership name by authorized person.
Dated:
________________________, 2017
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(Print
Name of Stockholder and/or Joint Tenant)
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(Signature
of Stockholder)
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(Second
Signature if held jointly)
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