Reverse Stock Split - January 27, 2014

HERBORIUM GROUP, INC.
One Bridge Plaza N - Suite 275
Fort Lee, New Jersey 07024

On January 14, 2014, the Board of Directors and shareholders owning the majority of the voting securities of Herborium Group, Inc. (the “Company”, “we” or “our”)  approved a 1,000 to 1 reverse common stock split (the “Reverse Stock Split”) and a decrease in the number of common shares authorized in the Company’s Articles of Incorporation to 950,000,000 common shares. On January 27, 2014, the Reverse Stock Split will be applied to all of the Company’s issued and outstanding Common Shares and we call this the “Effective Date”. The Board of Directors is affecting the Reverse Stock Split, with the approval of shareholders owning the majority of the Company’s voting securities with the primary intent of increasing the market price of the Company’s Common Stock to make the Common Stock more attractive to a broader range of institutional and other investors. Accordingly, the Company believes that effecting the Reverse Stock Split is in the Company’s and the Company’s shareholders’ best interests.

 The Board of Directors believes that an increased stock price may encourage investor interest and improve the marketability of the Common Stock to a broader range of investors, and thus enhance liquidity. Because of the trading volatility often associated with low-priced stocks, many brokerage firms and institutional investors have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers. Additionally, because brokers’ commissions on lower-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, the current share price of the Common Stock can result in an individual stockholder paying transaction costs that represent a higher percentage of total share value than would be the case if the share price of the Common Stock were substantially higher. This factor may also limit the willingness of institutions to purchase the Common Stock. The Board of Directors believes that the anticipated higher market price resulting from the Reverse Stock Split could enable institutional investors and brokerage firms with such policies and practices to invest in the Common Stock.

 Although the Company expects the Reverse Stock Split will result in an increase in the market price of the Common Stock, the Reverse Stock Split may not increase the market price of the Common Stock in proportion to the reduction in the number of shares of the Common Stock outstanding or result in a permanent increase in the market price, which is dependent upon many factors, including the Company’s performance, prospects and other factors detailed from time to time in its reports filed with the Commission. The history of similar reverse stock splits for companies in like circumstances is varied. If the Reverse Stock Split is affected and the market price of the Common Stock declines, the percentage decline as an absolute number and as a percentage of the Company’s overall market capitalization may be greater than would occur in the absence of a reverse stock split.

 Effect of the Reverse Split on Holders of Outstanding Common Stock. The Reverse Split will become effective on January 27, 2014 (the “Effective Time”) and we have filed the appropriate documents with the Secretary of State of the State of Nevada. Immediately after the Effective Time, each one thousand (1,000) shares of Common Stock will be combined into one (1) new share of Common Stock. Based on 1,428,048,750 shares of Common Stock issued and outstanding as of January 10, 2014, the “Record Date”, immediately following the Reverse Split the Company would have approximately 1,428,050 shares of Common Stock issued and outstanding (without giving effect to rounding for fractional shares). 

The Reverse Split will affect all holders of the Company’s Common Stock uniformly and will not affect any shareholder’s percentage ownership interest in the Company, except that as described below in “— Fractional Shares,” record holders of Common Stock otherwise entitled to a fractional share as a result of the Reverse Split will be rounded up to the next whole number. In addition, the Reverse Split will not affect any shareholder’s proportionate voting power (subject to the treatment of fractional shares). 

After the Effective Time, the Company’s Common Stock will have new “CUSIP number”: 42703A 208, which is a number used to identify the Company’s equity securities, and stock certificates with the old CUSIP number (42703A 109) abandoned. After the Reverse Split, the Common Stock will continue to be quoted on the Over-the-Counter Pink.  

Beneficial Holders of Common Stock (i.e., shareholders who hold in street name). Upon the implementation of the Reverse Stock Split, the Company intends to treat shares held by shareholders through a bank, broker, custodian or other nominee in the same manner as registered shareholders whose shares are registered in their names. Banks, brokers, custodians or other nominees will be instructed to effectuate the Reverse Stock Split for their beneficial holders holding the Common Stock in street name. However, these banks, brokers, custodians or other nominees may have different procedures than registered shareholders for processing the Reverse Stock Split. Shareholders who hold shares of the Common Stock with a bank, broker, custodian or other nominee and who have any questions in this regard are encouraged to contact their banks, brokers, custodians or other nominees.

 Registered “Book-Entry” Holders of Common Stock (i.e., shareholders that are registered on the transfer agent’s books and records but do not hold stock certificates). Certain of the Company’s registered holders of Common Stock may hold some or all of their shares electronically in book-entry form with the transfer agent. These shareholders do not have stock certificates evidencing their ownership of the Common Stock. They are, however, provided with a statement reflecting the number of shares registered in their accounts. Shareholders who hold shares electronically in book-entry form with the transfer agent will not need to take action (the exchange will be automatic) to receive whole shares of post-Reverse Split Common Stock, subject to adjustment for treatment of fractional shares.

 Holders of Certificated Shares of Common Stock. For those Stockholders that are holding physical stock certificate/s, you may exchange your current stock certificate/s for new stock certificates.  It is not necessary to endorse the back of the certificate/s.  Please send your stock Company certificates to Colonial Stock Transfer, the Exchange Agent at the following address:

Colonial Stock Transfer Co., 66 Exchange Place, Salt Lake City, UT  84111

Upon receipt of your current stock certificate, the Exchange Agent will issue a new certificate for your post-reverse shares.  Please be sure to include a payment of $40 per each new certificate issued + $10 for each return certified mail shipment or $20 for Fed Ex (required for positions valuing over $100,000).  Please include your contact information in the case of any questions. Until surrendered, the Company will deem outstanding old stock certificates held by shareholders to be cancelled and only to represent the number of whole shares of post-Reverse Split Common Stock to which these shareholders are entitled, subject to the treatment of fractional shares. Any old stock certificates submitted for exchange, whether because of a sale, transfer or other disposition of stock, will automatically be exchanged for new stock certificates. If an old stock certificate has a restrictive legend on the back of the old stock certificate(s), the new stock certificate will be issued with the same restrictive legends that are on the back of the old stock certificate(s).

Fractional Shares. The Company does not currently intend to issue fractional shares in connection with the Reverse Split. Therefore, the Company will not issue certificates representing fractional shares. In lieu of issuing fractions of shares, the Company will round up to the next whole number.

U.S. Federal Tax Matters

 Quantitative Effect:  No gain or loss should be recognized by a stockholder upon the exchange of pre-reverse stock split shares for post-reverse stock split shares. The aggregate tax basis of the post-reverse stock split shares will be the same as the aggregate tax basis of the pre-reverse stock split shares exchanged in the reverse stock split. A stockholder’s holding period in the post- reverse stock split shares will include the period during which the stockholder held the pre- reverse stock split shares exchanged in the reverse stock split.

Calculation of Change in Tax Basis:  The aggregate tax basis of the post-reverse stock split shares will be the same as the aggregate tax basis of the pre-reverse stock split shares exchanged in the reverse stock split.

Applicable Internal Revenue Code Sections:  The reverse stock split should constitute a “recapitalization” for U.S. federal income tax purposes and, therefore, a reorganization within the meaning of Section 368(a)(1)(E) of the Internal Revenue Code. As a result, a stockholder generally should not recognize gain or loss upon the reverse stock split, except with respect such basis that is allocated to any fractional share of). All stockholders are urged to consult to cash received in lieu of a fractional share of the common stock. A stockholder’s aggregate tax basis in the shares of the common stock received pursuant to the reverse stock split should equal the aggregate tax basis of the shares of the common stock surrendered (excluding any portion of with their own tax advisors with respect to the tax consequences of the reverse stock split. This discussion does not address the tax consequences to stockholders that are subject to special tax rules, such as banks, insurance companies, regulated investment companies, personal holding companies, foreign entities, partnerships, nonresident alien individuals, broker-dealers and tax- exempt entities.  This summary also assumes that the pre-reverse stock split shares were, and the post-reverse stock split shares will be, held as a “capital asset,” as defined in Section 1221 of the Code.

Can Any Resulting Loss Be Recognized?  The reverse stock split should constitute a “recapitalization” for U.S. federal income tax purposes and, therefore, a reorganization within the meaning of Section 368(a)(1)(E) of the Internal Revenue Code. As a result, a stockholder generally should not recognize gain or loss upon the reverse stock split, except with respect to cash received in lieu of a fractional share of the common stock.

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