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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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 14a6(e)(2)) |
| ☒ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material Pursuant to 240.14a12 |
NOVA LIFESTYLE, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| ☒ | No fee required. |
| ☐ | Fee paid previously with preliminary materials. |
| ☐ | Fee computed on table in exhibit required by Item25(b)per ExchangeAct Rules 14a-6(i)(1)and0-11. |
NOVA LIFESTYLE, INC.
6565 E. Washington Blvd.
Commerce, CA 90040
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held on May 22, 2025
Dear Stockholder:
You are cordially invited to attend a special meeting of the stockholders of Nova LifeStyle, Inc., a Nevada corporation, to be held at the corporate headquarters of Nova LifeStyle, Inc., located at 6565 E. Washington Blvd, Commerce, California 90040 on May 22, 2025, at 11:00 a.m. local time.
Information regarding each of the matters to be voted on at the Special Meeting is contained in the attached Proxy Statement and Notice of Special Meeting of Stockholders. We urge you to read the proxy statement carefully. Our directors and officers will be present at the meeting to respond to appropriate questions from stockholders.
The proxy statement and proxy card are being mailed to all stockholders of record on or about April 25, 2025.
Because it is important that your shares be voted at the Special Meeting, we urge you to complete, date and sign the enclosed proxy card and return it as promptly as possible in the accompanying envelope, whether or not you plan to attend in person. If you do attend the Special Meeting, you may withdraw your proxy and vote personally on each matter brought before the meeting.
Sincerely,
| BY ORDER OF THE BOARD OF DIRECTORS | |
| /s/ Xiaohua Lu | |
| Xiaohua Lu | |
| Chief Executive Officer | |
| Date: April 25, 2025 |
NOVA LIFESTYLE, INC.
6565 E. Washington Blvd.
Commerce, CA 90040
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held May 22, 2025
TO THE STOCKHOLDERS OF NOVA LIFESTYLE, INC.:
NOTICE HEREBY IS GIVEN that a Special Meeting of Stockholders of Nova LifeStyle, Inc., a Nevada corporation, will be held at the corporate headquarters of Nova LifeStyle, Inc., located at 6565 E. Washington Blvd, Commerce, California 90040 on May 22, 2025, at 11:00 a.m. local time, to consider and act upon the following:
| 1. | To approve, for the purpose of Nasdaq Marketplace Rule 5635(d), the issuance of (i) our common stock, in one or more offerings, where the maximum discount at which our common stock will be offered will be equivalent to a discount of 50% below the closing price of our common stock on the date prior to the closing of each offering; and (ii) warrants to purchase shares of our common stock and shares of our common stock issuable upon exercise thereof, in one or more offerings, where the maximum discount at which our common stock will be offered will be equivalent to a discount of 40% below the closing price of our common stock on the date prior to the closing of each offering. |
The Board of Directors of the Company (the Board of Directors or the Board) and the Companys management has fixed the close of business on April 9, 2025 as the record date for determining the stockholders entitled to notice of, and to vote at, the Special Meeting and any adjournment and postponements thereof (the Record Date).
After careful consideration, the Board of Directors recommends a vote IN FAVOR OF the issuance of securities.
Stockholders are cordially invited to attend the Special Meeting in person. Whether you plan to attend the Special Meeting or not, please complete, sign and date the enclosed Proxy Card and return it without delay in the enclosed postage-prepaid envelope. If you do attend the Special Meeting, you may withdraw your proxy and vote personally on each matter brought before the meeting. YOUR VOTE IS VERY IMPORTANT.
|
BY ORDER OF THE BOARD OF DIRECTORS |
|
| /s/ Xiaohua Lu | |
| Xiaohua Lu | |
| Chief Executive Officer |
Commerce, California
April 25, 2025
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 22, 2025:
WHETHER OR NOT YOU PLAN TO ATTEND OUR SPECIAL MEETING OF STOCKHOLDERS, YOUR VOTE IS IMPORTANT. PLEASE FOLLOW THE INSTRUCTIONS IN THE PROXY MATERIALS TO VOTE YOUR PROXY VIA THE INTERNET OR BY TELEPHONE OR REQUEST AND PROMPTLY COMPLETE, EXECUTE AND RETURN THE PROXY CARD BY FOLLOWING THE INSTRUCTIONS ON THE PROXY CARD. IF YOU ATTEND OUR SPECIAL MEETING OF STOCKHOLDERS, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON IF YOU SO DESIRE.
NOVA LIFESTYLE, INC.
6565 E. Washington Blvd.
Commerce, CA 90040
PROXY STATEMENT
FOR THE SPECIAL MEETING OF STOCKHOLDERS
To Be Held May 22, 2025
We are furnishing this Proxy Statement to the Stockholders of Nova LifeStyle, Inc., a Nevada corporation in connection with the solicitation, by the Board of Directors of Nova LifeStyle, Inc. (the Board), of proxies to be voted at the Special Meeting of Stockholders to be held at the corporate headquarters of Nova LifeStyle, Inc. located at 6565 E. Washington Blvd, Commerce, California 90040 on May 22, 2025, at 11:00 a.m. local time, and at any adjournments or postponements of the meeting, for the following purpose:
| 1. | To approve, for the purpose of Nasdaq Marketplace Rule 5635(d), the issuance of (i) our common stock, in one or more offerings, where the maximum discount at which our common stock will be offered will be equivalent to a discount of 50% below the closing price of our common stock on the date prior to the closing of each offering; and (ii) warrants to purchase shares of our common stock and shares of our common stock issuable upon exercise thereof, in one or more offerings, where the maximum discount at which our common stock will be offered will be equivalent to a discount of 40% below the closing price of our common stock on the date prior to the closing of each offering. |
When used in this Proxy Statement, the terms Nova LifeStyle, Nova, the Company, we, our and similar terms refer to Nova LifeStyle, Inc., a Nevada corporation, and its wholly-owned subsidiaries, and the terms Board of Directors and Board refers to the Board of Directors of the Company.
Questions and Answers about these Proxy Materials and the Special Meeting
Why am I receiving this proxy statement?
The board of directors of the Company is soliciting your proxy to vote at the Special Meeting because you owned shares of the Company common stock at the close of business on April 9, 2025, the Record Date for the Special Meeting, and are therefore entitled to vote at the Special Meeting. This proxy statement, along with a proxy card or a voting instruction card, is being mailed to stockholders on or about April 25, 2025. The Company has made these materials available to you on the Internet, and the Company has delivered printed proxy materials to you or sent them to you by e-mail. This proxy statement summarizes the information that you need to know in order to cast your vote at the Special Meeting. You do not need to attend the Special Meeting in person to vote your shares of common stock of the Company.
When and where will the Special Meeting be held?
The Special Meeting will be held at 11:00 a.m., local time, on May 22, 2025, at the Companys corporate headquarters located at 6565 E. Washington Blvd, Commerce, California 90040.
What information is contained in this Proxy Statement?
This information relates to the proposals to be voted on at the Special Meeting, the voting process, and certain other required information.
How do I vote?
Stockholders of Record
If your shares are registered directly in your name with our transfer agent, Issuer Direct Corporation, you are considered the stockholder of record with respect to those shares. As the stockholder of record, you may vote in person at the Special Meeting or vote by proxy using the accompanying proxy card. Whether or not you plan to attend the Special Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the Special Meeting and vote in person even if you have already voted by proxy.
By Internet stockholders may vote on the internet by logging on to www.proxyvote.com and following the instructions given.
By Telephone stockholders may vote by calling 1-800-690-6903 (toll-free) with a touch tone telephone and following the recorded instructions.
By Mail stockholders must request a paper copy of the proxy materials to receive a proxy card and follow the instructions given for mailing. A paper copy of the proxy materials may be obtained by logging onto www.proxyvote.com and following the instructions given. To vote using the proxy card, simply print the proxy card, complete, sign and date it and return it promptly to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, New York 11717. In the alternative, the proxy card can be mailed directly to the Company: Xiaohua Lu, our Chief Executive Officer, located at 6565 E. Washington Blvd., Commerce, CA 90040. Our Board has selected Thanh H. Lam to serve as proxy.
If you vote by telephone or via the Internet, you do not need to return your proxy card. Telephone and Internet voting are available 24 hours a day and will close at 11:59 P.M. Eastern Time on May 21, 2025.
In Person - stockholders may vote in person at the Special Meeting. To vote in person, come to the Special Meeting and we will give you a ballot when you arrive. The Board recommends that you vote using one of the other voting methods, since it is not practical for most stockholders to attend the Special Meeting.
Shares of our common stock represented by proxies properly voted that are received by us and are not revoked will be voted at the Special Meeting in accordance with the instructions contained therein.
If instructions are not given, such proxies will be voted:
| ● | FOR to approve, for the purpose of Nasdaq Marketplace Rule 5635(d), the issuance of (i) our common stock, in one or more offerings, where the maximum discount at which our common stock will be offered will be equivalent to a discount of 50% below the closing price of our common stock on the date prior to the closing of each offering; and (ii) warrants to purchase shares of our common stock and shares of our common stock issuable upon exercise thereof, in one or more offerings, where the maximum discount at which our common stock will be offered will be equivalent to a discount of 40% below the closing price of our common stock on the date prior to the closing of each offering. |
Street Name Stockholders
If you hold your shares in street name through a stockbroker, bank or other nominee rather than directly in your own name, you are considered the beneficial owner of such shares. Because a beneficial owner is not a stockholder of record, you may not vote these shares in person at the Special Meeting unless you obtain a legal proxy from the broker, bank or nominee that holds your shares, giving you the right to vote those shares at the meeting. The Board recommends that you vote using one of the other voting methods, since it is not practical for most stockholders to attend the Special Meeting.
If you hold your shares in street name through a stockbroker, bank or other nominee rather than directly in your own name, you can most conveniently vote by telephone, Internet or mail. Please review the voting instructions on your voting instruction form.
Your proxy is revocable at any time before it is voted at the Special Meeting in any of the following three ways:
1. You may submit another properly completed proxy bearing a later date.
2. You may send a written notice that you are revoking your proxy to Thanh H. Lam, our Chairperson of the Board, located at 6565 E. Washington Blvd., Commerce, CA 90040.
3. You may attend the Special Meeting and vote in person. However, simply attending the Special Meeting will not, by itself, revoke your proxy.
What does it mean if I receive more than one set of proxy materials?
It means your shares are registered differently or are in more than one account. Please provide voting instructions for each account for which you have received a set of proxy materials.
Who is soliciting my vote pursuant to this Proxy Statement?
Our Board is soliciting your vote at the Special Meeting. The cost of solicitation will be borne by us. Our directors and employees may also solicit proxies in person, by telephone, fax, electronic transmission or other means of communication. We will not pay these directors and employees any additional compensation for these services. We will ask banks, brokerage firms, and other institutions, nominees, and fiduciaries to forward these proxy materials to their principal, and to obtain authority to execute proxies, and will reimburse them for their expenses.
Who is entitled to vote?
Only stockholders of record at the close of business on the Record Date will be entitled to vote at the Special Meeting.
How many shares are eligible to be voted?
As of the Record Date, we had 13,207,322 shares of common stock outstanding. Each outstanding share of our common stock will entitle its holder to one vote on each of the matters to be voted on at the Special Meeting.
What am I voting on?
You are voting on the following matters:
| 1. | Proposal No.1 to approve of the issuance of (i) our common stock, in one or more offerings, where the maximum discount at which our common stock will be offered will be equivalent to a discount of 50% below the closing price of our common stock on the date prior to the closing of each offering; and (ii) warrants to purchase shares of our common stock and shares of our common stock issuable upon exercise thereof, in one or more offerings, where the maximum discount at which our common stock will be offered will be equivalent to a discount of 40% below the closing price of our common stock on the date prior to the closing of each offering |
How does the Board recommend that I vote?
The Board unanimously recommends that you vote your shares as follows:
| ● | FOR the approval of the Proposal No.1. |
None of our directors have informed us in writing that he or she intends to oppose any action intended to be taken by us at the Special Meeting.
How many votes are required to hold the Special Meeting and what are the voting procedures?
Quorum Requirement : As of the Record Date, 13,207,322 shares of the Companys common stock were issued and outstanding. The presence of at least one-third of all of our shares of common stock issued and outstanding and entitled to vote at the meeting, present in person or represented by proxy, will constitute a quorum at the meeting. If you submit a properly executed proxy, then you will be considered part of the quorum.
Required Votes : Each outstanding share of our common stock is entitled to one vote on each proposal at the Special Meeting. If there is a quorum at the Special Meeting, the matters to be voted upon by the stockholders require the following votes for such matter to be approved:
| ● | Approval of the Proposal No.1 : The affirmative vote of the holders of at least the majority of the voting power of the votes cast (in person or by proxy) at the Special Meeting is necessary to approve the proposal No.1. Abstentions and broker non-votes will have no effect on the outcome of this proposal. |
If a broker indicates on its proxy that it submits to the Company that it does not have authority to vote certain shares held in street name, the shares not voted are referred to as broker non-votes. Broker non-votes occur when brokers do not have discretionary voting authority to vote certain shares held in street name on particular proposals, and the beneficial owner of those shares has not instructed the broker how to vote on those proposals. If you are a beneficial owner and you do not provide instructions to your broker, bank or other nominee, your broker, bank or other nominee is permitted to vote your shares for or against routine matters. Brokers are not permitted to exercise discretionary voting authority to vote your shares for or against non-routine matters.
How may a stockholder bring any other business before the Special Meeting?
The Companys Amended and Restated Bylaws (the Bylaws) provide that at the special meetings the only business which may be transacted is that relating to the purpose or purposes set forth in the notice thereof, and, as such, stockholders shall not be permitted to propose other business at the Special Meeting.
Who is paying for the costs of this proxy solicitation?
The Company will bear the cost of preparing, printing and mailing the materials in connection with this solicitation of proxies. In addition to mailing these materials, directors, officers and employees of the Company may, without being additionally compensated, solicit proxies personally and by mail, telephone, facsimile or electronic communication.
Are there any rights of appraisal?
Under the Nevada Revised Statutes and the Companys Articles of Incorporation, Stockholders are not entitled to any appraisal or similar rights of dissenters with respect to any of the proposal to be acted upon at the Special Meeting.
Who will count the votes?
The inspector of election appointed for the Special Meeting will receive and tabulate the ballots and voting instruction forms.
Where do I find the voting results of the Special Meeting?
The voting results will be disclosed in a Current Report on Form 8-K that we will file with the SEC within four (4) business days after the Special Meeting.
How can I obtain the Companys corporate governance information?
Our corporate governance information is available on our website at www.novalifestyle.com under Investor RelationsCorporate Governance. Our stockholders may also obtain written copies at no cost by writing to us at Nova LifeStyle Inc, at 6565 E. Washington Blvd., Commerce, CA 90040, Attention: Corporate Secretary, or by calling (323) 888-9999.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT COMPANYS STOCKHOLDERS VOTE FOR THE APPROVAL OF ISSUANCE OF SECURITIES.
PROPOSAL NO. 1
APPROVAL OF ISSUANCE OF SECURITIES
Background
Our common stock is currently listed on the Nasdaq Capital Market and, as such, we are subject to Nasdaq Marketplace Rules. Nasdaq Marketplace Rule 5635(d) (Rule 5635(d)) requires us to obtain stockholder approval prior to the issuance of our common stock in connection with a non-public offering involving the sale, issuance or potential issuance by the Company of common stock (and/or securities convertible into or exercisable for common stock) equal to 20% or more of the common stock outstanding immediately prior to entering into an agreement in connection with any such non-public offering. On April 6, 2025, we entered into a non-binding term sheet (the Term Sheet) with American Trust Investment Services, Inc. (the Placement Agent), pursuant to which we will retain American Trust Investment Services, Inc. to act as our exclusive placement agent in connection with an offering of up to $8,000,000 of our common stock, par value $0.001 (the Common Stock). Purchaser of each share of Common Stock will also receive two (2) warrants (the Warrant). The shares of Common Stock and Warrants will be issued separately in this offering. The assumed offering price for each share of Common Stock (the Offering Price) will be equivalent to 50% of the closing price of our Common Stock on the Nasdaq on the date immediately preceding the closing date. A holder of one (1) warrant may exercise the right to acquire one (1) share of common stock at an exercise price that equals to 120% of the Offering Price and will be exercisable until the fifth anniversary of the issuance date and subject to certain adjustment. The Placement Agent has no obligation to buy any of the securities from us or to arrange for the purchase or sale of any specific number of dollar amount of securities. We will pay the Placement Agent a commission equal to 7% of the gross proceeds sold in this offering. We will provide the Placement Agent a non-accountable expense allowance equal to 1% of the gross proceeds of this offering and out-of-pocket expenses up to a maximum amount of $150,000. This summary is qualified in its entirety by the full text of the Term Sheet, a copy of the Term Sheet is attached as Annex A to the accompanying proxy statement.
Need to Raise Additional Capital
We currently need to raise additional capital to fund our operations, implement our business strategy and enhance our overall capitalization. While we have not yet determined the particular terms for any potential financing, we are currently in discussions with certain parties in connection with such potential financing. Because we may seek additional capital in non-public offerings that would result in the issuance of shares of our common stock equal to or in excess of 20% of the number of shares of our common outstanding immediately prior to entering into an agreement for such potential financing, and which would trigger the requirement to obtain stockholder approval, pursuant to Rule 5635(d), we are seeking stockholder approval now, so that we will be able to move quickly to take full advantage of any opportunities that may develop for us to raise such capital.
We hereby submit this Proposal 1 to our stockholders for their approval of the potential issuance of shares of our common stock, or securities convertible into our common stock, subject to the following limitations:
| ● | The total aggregate consideration will not exceed $8 million; |
| ● | The maximum discount at which securities will be offered will be equivalent to a discount of up to 50% below the market price of our common stock at the time of issuance in recognition of the historical volatility making the pricing discount of our common stock required by investors at any particular time difficult, at this time, to predict. |
| ● | Such offerings will occur, if at all, within three (3) months from the stockholder approval; and |
| ● | Such other terms as the Board of Directors shall deem to be in the best interests of the Company and its stockholders, not inconsistent with the foregoing. |
Notwithstanding the foregoing, we will not sell securities to any officers, directors, or employees of the Company, or any consultants who perform services for the Company, in any such non-public capital-raising transactions or offerings, at a price that is less than the lower of (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of a binding agreement, in connection with such capital-raising transactions or offerings or (ii) the average Nasdaq Official Closing Price of the common stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of a binding agreement, in connection with such capital-raising transactions or offerings.
The issuance of shares of our common stock, or other securities convertible into shares of our common stock, in accordance with any of such non-public offerings would dilute, and thereby reduce, each existing stockholders proportionate ownership in our common stock. The stockholders do not have preemptive rights to subscribe to additional shares that may be issued by the Company in order to maintain their proportionate ownership of the common stock.
The issuance of shares of common stock in one or more non-public offerings could have an anti-takeover effect. Such issuance could dilute the voting power of a person seeking control of the Company, thereby deterring or rendering more difficult a merger, tender offer, proxy contest or an extraordinary corporate transaction opposed by the Company.
The Board of Directors has not yet determined the terms and conditions of any potential financings. It is possible that if we conduct a non-public stock offering, some of the shares we sell could be purchased by one or more investors who could acquire a large block of our common stock. This would concentrate voting power in the hands of a few stockholders who could exercise greater influence on our operations or the outcome of matters put to a vote of stockholders in the future.
We cannot determine what the actual net proceeds of the offerings will be until they are completed, but as discussed above, the aggregate dollar amount of the non-public offerings will be no more than $8 million. If all or part of the offerings are completed, the net proceeds will be used for general corporate purposes. The terms of the securities to be authorized, including dividend or interest rates, conversion prices, voting rights, redemption prices, maturity dates and similar matters would be determined by the Board of Directors. Any transaction where the Company sells such securities will be reviewed and approved by the Board of Directors at the time of issuance. We currently have no arrangements or understandings regarding any specific transaction with investors, so we cannot predict whether we will be successful should we seek to raise capital through any offerings.
Recommendation of Board of Directors
The Board of Directors has approved and unanimously recommends that the stockholders vote FOR the proposal to approve the Proposal No.1.
OTHER BUSINESS
As of the date of this Proxy Statement, management does not know of any other matters that will be brought before the Special Meeting requiring action of the stockholders. However, if any other matters requiring the vote of the stockholders properly come before the Special Meeting, it is the intention of the persons named in the enclosed form of proxy to vote the proxies in accordance with the discretion of management. The persons designated as proxies will also have the right to approve any and all adjournments of the Special Meeting for any reason.
STOCKHOLDERS SHARING THE SAME ADDRESS
The SEC has adopted rules that permit companies and intermediaries (such as brokers, banks and other nominees) to implement a delivery procedure called householding. Under this procedure, multiple stockholders who reside at the same address may receive a single copy of the Proxy Statement and other proxy materials, unless the affected shareholder has provided contrary instructions. This procedure reduces printing costs and postage fees. Under applicable law, if you consented or were deemed to have consented, your broker, bank or other intermediary may send only one copy of the Proxy Statement and other proxy materials to your address for all residents that own shares of the Companys common stock in street name. If you wish to revoke your consent to householding, you must contact your broker, bank or other intermediary. If you are receiving multiple copies of the Proxy Statement and other proxy materials, you may be able to request householding by contacting your broker, bank or other intermediary. If you received a householding mailing and you would like to have additional copies of proxy statement and proxy materials mailed to you or you would like to opt out of this practice for future mailings, contact our Corporate Secretary, located at 6565 E. Washington Blvd., Commerce, CA 90040. We agree to deliver promptly, upon written or oral request, a separate copy of this Proxy Statement and proxy materials to any stockholder at the shared address to which a single copy of those documents was delivered. If you wish to request copies free of charge of the Proxy Statement or other proxy materials, please send your request to Nova LifeStyle, Inc., at 6565 E. Washington Blvd., Commerce, CA 90040, Attention: Corporate Secretary or call the Company with your request at (323) 888-9999.
WHERE YOU CAN FIND MORE INFORMATION
We have filed reports, proxy statements and other information with the SEC. You may read and copy any document we file with the SEC at the SECs Public Reference Room at 100 F Street, N.W., Washington, D.C. 20549. You may obtain information on the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains a website that contains the reports, proxy statements and other information we file electronically with the SEC. The address of the SEC website is www.sec.gov. In addition, stockholders may obtain free copies of certain documents filed with the SEC by the Company through the SEC Filings section of our website.
You may obtain any of the documents we file with the SEC, without charge, by requesting them in writing or by telephone from us at the following address:
Nova LifeStyle, Inc.,
Attn: Corporate Secretary
6565 E. Washington Blvd., Commerce, CA 90040
(323) 888-9999
YOUR VOTE IS IMPORTANT
You are cordially invited to attend the Special Meeting. However, to ensure that your shares are represented at the meeting, please submit your proxy or voting instructions. Please see the instructions on the proxy and voting instruction card. Submitting a proxy or voting instructions will not prevent you from attending the Special Meeting and voting in person, if you so desire, but will help the Company secure a quorum and reduce the expense of additional proxy solicitation .
| BY ORDER OF THE BOARD OF DIRECTORS | |
| April 25, 2025 | /s/ Xiaohua Lu |
| Xiaohua Lu | |
| Chief Executive Officer |
Annex A
Material Terms of Public Offering for
Nova Lifestyle, Inc.
April 6, 2025
The purpose of this term sheet is to set forth the indicative terms pursuant to which, subject to certain conditions set forth herein, American Trust Investment Services, Inc. (ATIS or the underwriter) would act as the lead underwriter for the offering of certain securities of Nova Lifestyle, Inc. on a private placing basis (the Offering). The terms and conditions set forth herein are subject to change and this term sheet does not constitute an offer. The issuance and sale of the securities is subject to completion of due diligence to the underwriters satisfaction, and the execution of definitive documentation to effect the Offering that is mutually satisfactory to each party and satisfaction of the closing conditions as set forth in the definitive transaction documents.
| Issuer: | Nova Lifestyle, Inc., a Nevada corporation (the Company) | |
| Underwriter: | American Trust Investment Services, Inc. (ATIS) | |
| Securities Offered: | Up to $8,000,000 of Units, with each Unit consisting of one share of common stock and two warrants each exercisable for one share of common stock. | |
| Offering Price Per Unit: | Each Unit will be offered at a 50% discount to the closing price of the Companys common stock on the date prior to Closing (the Offering Price). | |
| Warrants | Each Unit will come with 200% warrant coverage at an exercise price of 120% of the Offering Price (Warrants). The Warrants will have cash or cashless exercise and a term of 5 years. | |
| Definitive Documents: |
The underwriting agreement in connection with the Offering (the Underwriting Agreement) shall contain additional provisions, including without limitation representations, warranties, covenants, agreements and remedies, as are typical for public offerings of this type.
The Company will be responsible for preparing Form S-1 registration statement to register securities sold in the Offering and other transaction documents. |
|
| Use of Proceeds: | Net proceeds will be used for working capital, marketing expenditures, repayment of short-term debt and capital expenditures. | |
| Underwriting Commissions and Expenses: | The Company has engaged ATIS for the Offering and has agreed to pay an underwriting commission of 7% of the gross proceeds of the Offering, 1% for non-accountable expenses, plus reimbursement of accountable expenses up to a maximum of $150,000. | |
| Company Lock-Ups: | All of the Companys directors and officers, employees or other recipients of common stock pursuant to an ESOP or other benefit plan, and holders of 5% or more of the Companys outstanding common stock as of the effective date of the Offering will enter into customary lock-up agreements in favor of ATIS for a period of six (6) months from the closing date of the Offering (the Closing Date), and (ii) each of the Company and any successors of the Company will agree, for a period of six (6) months from the Closing, that each will not (a) offer, sell, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; or (b) file or caused to be filed any registration statement with the Commission relating to the offering of any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company. |
