Correction Notice Of Press Release Announcing Wah Fu Education Group Ltd. to Hold Annual General Meeting on December 20, 2024

Rhea-AI Summary

Wah Fu Education Group (NASDAQ: WAFU) issued corrections to its December 2, 2024 press release regarding its upcoming Annual General Meeting. The key corrections relate to the proposed dual-class share structure, where Ordinary Shares will have one vote and Class A Shares will have fifteen votes per share at general meetings.

The company plans to change its authorized shares from 30,000,000 to 600,000,000, divided into 500,000,000 Ordinary Shares and 100,000,000 Class A Shares. A notable correction was made to the automatic conversion threshold of Class A Shares to Ordinary Shares, which was revised from 1,488,000 to 74,400 shares.

Positive

• None.

Negative

• Implementation of dual-class share structure potentially reducing voting power of current ordinary shareholders
• Significant increase in authorized shares from 30M to 600M could lead to future dilution

Insights

Legal Expert

This correction notice details significant corporate governance changes for Wah Fu Education Group. The key modification involves the implementation of a dual-class share structure, where Class A shares will carry 15 votes compared to 1 vote for ordinary shares. The company is increasing its authorized shares from 30 million to 600 million, split between 500 million ordinary shares and 100 million Class A shares. The automatic conversion threshold for Class A shares has been corrected from 1,488,000 to 74,400 shares.

This dual-class structure significantly concentrates voting power among Class A shareholders, potentially impacting minority shareholder rights and corporate governance dynamics. The 15:1 voting ratio is particularly notable and could affect shareholder voting influence on major corporate decisions.

Financial Analyst

The implementation of a dual-class share structure typically signals management's desire to maintain control while accessing public markets. The 20-fold increase in authorized shares from 30M to 600M suggests potential future capital raising activities or stock-based transactions. The reduced threshold for automatic conversion of Class A shares to ordinary shares (74,400 shares) provides a safeguard mechanism, but the 15:1 voting power ratio could lead to decreased market valuation due to corporate governance concerns. For a micro-cap company with a market cap of just $7.7M, such significant changes in share structure warrant careful investor attention.

Beijing, China, Dec. 04, 2024 (GLOBE NEWSWIRE) -- Wah Fu Education Group Ltd. (NASDAQ: WAFU, the “Company”) today announced corrections to its press release sent out on December 2, 2024.

Holders of record of the Company’s ordinary shares of par value US $0.01 each on the close of business on November 21, 2024, Eastern Standard Time (the “Record Date”) or their proxy holders are entitled to vote at the AGM or any adjournment or postponements thereof. Each holder of ordinary shares has one (1) vote for each ordinary share held as of the close of business on the Record Date.

Under the existing memorandum and articles of association of the Company, a resolution of shareholders may be passed by the affirmative vote of a majority of in excess of 50% of the votes of the shares entitled to vote thereon which were present at the meeting and were voted.

In the release dated December 2, 2024, the following paragraph reads:

“The Company proposes to amend and restate the existing memorandum and articles of association registered with the Registry of Corporate Affairs in the British Virgin Islands to adopt a dual-class share structure (the “Dual-class Share Structure”), pursuant to which the Company will create a new class of shares and the Company’s issued ordinary shares of US$0.01 par value each shall be re-designated into (i) ordinary shares of US$0.0005 par value each (“Ordinary Share”), and (ii) class A ordinary shares of US$0.0005 par value each (“Class A Shares”), with each Ordinary Share being entitled to one (1) vote and each Class A Share being entitled to fifteen (15) votes on all matters subject to vote at general meetings of the Company.”

Is corrected to read as follows:

The Company proposes to amend and restate the existing memorandum and articles of association currently registered with the Registry of Corporate Affairs in the British Virgin Islands to adopt a dual-class share structure (the “Dual-class Share Structure”), pursuant to which the Company will create a new class of shares of class A ordinary shares (the “Class A Shares”), with each ordinary share (the “Ordinary Shares”) being entitled to one (1) vote and each Class A Share being entitled to fifteen (15) votes on all matters subject to vote at general meetings of the Company.

In connection with the Dual-class Share Structure, the Company proposes to:

	(a)	In the release dated December 2, 2024, the following paragraph reads: “create a new class of shares and change the maximum number of shares that the Company is authorised to issue from 30,000,000 ordinary shares of US$0.01 par value each to 600,000,000 shares divided into 500,000,000 Ordinary Shares with a par value of US$0.0005 each and 100,000,000 Class A Shares with a par value of US$0.0005 (the “Change in Authorised Shares”);” Is corrected to read as follows: create a new class of shares and change the maximum number of shares that the Company is authorised to issue from 30,000,000 ordinary shares to 600,000,000 shares divided into 500,000,000 Ordinary Shares and 100,000,000 Class A Shares (the “Change in Authorised Shares”);
	(b)	amend and restate its existing memorandum and articles of association registered with the Registrar or Corporate Affairs in the British Virgin Islands to include, amongst other things:
	(i)	the creation of a new class of Class A Shares with each Class A Share being entitled to fifteen (15) votes on all matters subject to vote at general meetings of the Company; and
	(ii)	In the release dated December 2, 2024, the following paragraph reads: the following provision: “Notwithstanding any other provision of these Articles, each Class A Share shall be automatically converted into an Ordinary Share immediately upon the holders of Class A Shares in aggregate beneficially owning less than 1,488,000 Class A Shares, which is equivalent to 5% of the total issued and outstanding Class A Shares as of the date of registration of these Memorandum and Articles.”; and Is corrected to read as follows: the following provision: “Notwithstanding any other provision of these Articles, each Class A Share shall be automatically converted into an Ordinary Share immediately upon the holders of Class A Shares in aggregate beneficially owning less than 74,400 Class A Shares, which is equivalent to 5% of the total issued and outstanding Class A Shares as of the date of registration of these Memorandum and Articles.”; and
	(c)	In the release dated December 2, 2024, the following paragraph shall be deleted in its entirely: conduct a division of shares by which each issued ordinary share of US$0.01 par value each in the Company would be divided into a larger number of Ordinary Shares of US$0.0005 par value each resulting in every one currently issued ordinary share being divided into 20 Ordinary Shares.

The notice of the AGM sets forth the resolutions to be submitted to shareholders of the Company for approval and other relevant information regarding the AGM, the proposed Dual-class Share Structure and how to vote ordinary shares or direct Deutsche Bank Trust Company Americas to vote the ordinary shares represented by the ADSs at the AGM. Shareholders may obtain a copy of the Company’s annual report on Form 20-F, free of charge on the Company’s Investor Relations website at www.edu-edu.cn, or on the website of U.S. Securities and Exchange Commission at http://www.sec.gov. Physical copies of the annual report on Form 20-F can be provided to shareholders of the Company without charge by emailing Wah Fu Education Group Ltd., at ir@edu-edu.com.cn or by writing to:

L207b, Hesheng Fortune Plaza
No.13 Deshengmenwai Street
Xicheng District, Beijing, China 100088
Attention: Raincy Du

INVESTORS AND SHAREHOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE MATERIALS FILED WITH OR FURNISHED TO THE U.S. SECURITIES AND EXCHANGE COMMISSION, AS THEY CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, THE DUAL-CLASS SHARE STRUCTURE AND RELATED MATTERS.

About Wah Fu Education Group Ltd.

Since its establishment in 1999, Wah Fu Education Group Ltd. (“Wah Fu”) has been committed to providing customized and diversified education solutions for the development of students, institutions and universities. Wah Fu continues to innovate in self-taught examinations for higher academic degrees, information application in adult education, non-degree training and other online educational programs. Wah Fu has become one of the most influential brand of distance education for adults in China. For more information about Wah Fu, please visit www.edu-edu.cn.

Investor Relations Contact

For Wah Fu:

Raincy Du
ir@edu-edu.com.cn

Investor Relations:

Haining Wang
Fair Consulting LLC
Email: info@fairconsulting.com
Phone: +1-646-752-9774(US) /+86-136-8536-8593(China)

FAQ

What changes did Wah Fu Education (WAFU) make to its dual-class share structure announcement?

WAFU corrected the automatic conversion threshold for Class A Shares from 1,488,000 to 74,400 shares and clarified details about the creation of a new class of shares with different voting rights.

How many votes will each class of shares have in WAFU's new structure?

Under the proposed structure, Ordinary Shares will have one vote per share, while Class A Shares will have fifteen votes per share at general meetings.

What is the new authorized share count for WAFU after the proposed change?

The authorized shares will increase from 30,000,000 to 600,000,000, split between 500,000,000 Ordinary Shares and 100,000,000 Class A Shares.