51Talk(COE) - 2022 Q3 - Quarterly Report

Memorandum of Association Outlines 51Talk Online Education Group's foundational details: Cayman Islands incorporation, name, registered office, shareholder liability, and authorized share capital - The company's name is 51Talk Online Education Group, and its registered office is located in the Cayman Islands[2] - The liability of each shareholder is limited to the amount, if any, that is unpaid on the shares they hold[3] Authorized Share Capital Structure | Category | Details | | :--- | :--- | | Total Authorized Capital | US$150,000 | | Total Shares | 1,500,000,000 shares | | Class A Ordinary Shares | 1,000,000,000 shares at US$0.0001 par value each | | Class B Ordinary Shares | 350,000,000 shares at US$0.0001 par value each | | Other Classes | 150,000,000 shares of such class as the Board may determine | Articles of Association Details internal regulations, covering share rights, shareholder meetings, director duties, financial policies, and administrative provisions, adopted September 30, 2022 Interpretation and Preliminary Defines key terms like "ADS," "Class A/B Ordinary Share," "Ordinary Resolution," and "Special Resolution," clarifying legal and procedural vocabulary - Defines "Class A Ordinary Share" and "Class B Ordinary Share" as shares with a par value of US$0.0001 each, with specific rights as detailed in the articles[13][14] - An "Ordinary Resolution" requires a simple majority vote, while a "Special Resolution" requires a majority of not less than two-thirds of the votes cast[24][26] - The business of the Company may be conducted as the Directors see fit, and the Register of Members shall be kept at a location determined by the Directors, or at the Registered Office by default[30][32] Share Capital Details share structure and rules, including issuance authority, Class A and B share rights, and modification procedures General Share Provisions Outlines the Board's authority to issue and allot unissued shares, modify rights for share classes, and handle share certificates and fractional shares - Directors have absolute discretion to issue and allot unissued shares, including creating new classes or series with preferred rights, without the approval of Members[33] - Materially adverse variation of rights for any share class requires the written consent of the holders of three-fourths of the issued shares of that class or a Special Resolution passed at a separate meeting of that class[42] - The creation of new shares ranking equally with (pari passu) or subsequent to existing shares is not considered a material adverse variation of rights[43] Class A and Class B Ordinary Shares Defines the dual-class share structure, specifying differential voting rights and conversion terms from Class B to Class A shares Voting and Conversion Rights of Share Classes | Share Class | Votes per Share | Conversion Rights | | :--- | :--- | :--- | | Class A Ordinary Share | One (1) | Not convertible into Class B shares | | Class B Ordinary Share | Ten (10) | Convertible into one (1) Class A share at any time by the holder | - A Class B Ordinary Share will automatically and immediately convert into one Class A Ordinary Share upon its sale or transfer to any person who is not an Affiliate of the shareholder[39] - Except for voting and conversion rights, Class A and Class B Ordinary Shares rank equally (pari passu) and have the same rights, preferences, and privileges[41] Shareholder Obligations and Company Rights Details the company's rights over shares, including paramount lien, calls on unpaid shares, and procedures for forfeiting shares - The Company has a first and paramount lien on every share for all amounts payable in respect of that share, which extends to any dividends[49] - Directors can make calls on shareholders for any money unpaid on their shares, providing at least fourteen calendar days' notice[53] - If a shareholder fails to pay a call, the Directors may, after giving notice, forfeit the shares by a resolution. The person whose shares are forfeited remains liable for the money owed at the date of forfeiture[58][59] Share Transactions Governs the transfer, transmission, redemption, and purchase of shares, outlining procedures for transfers and rights of representatives - The Directors have absolute discretion to decline to register any transfer of shares that are not fully paid up or on which the Company has a lien[62] - The legal personal representative of a deceased shareholder is the only person recognized by the Company as having title to the shares[67] - The Company may issue redeemable shares and purchase its own shares. Prior to purchase, redemption, or surrender, the Directors may determine that such shares shall be held as Treasury Shares[74][76] Alteration of Share Capital Describes mechanisms for altering share capital, requiring Ordinary Resolution for increases, consolidation, subdivision, or cancellation, and Special Resolution for reduction - The Company can increase its share capital by an Ordinary Resolution[71] - An Ordinary Resolution is also sufficient to consolidate shares into larger amounts, subdivide shares into smaller amounts, or cancel shares that have not been taken[72] - The Company may reduce its share capital by a Special Resolution[73] Shareholder Meetings Establishes the framework for conducting shareholder meetings, covering calling, notice requirements, quorum, procedures, and voting rights General Meetings and Notices Details procedures for convening general meetings, including who can call meetings, shareholder requisition rights, and minimum notice requirements - Shareholders holding at least one-third (1/3) of the aggregate votes of all issued and outstanding shares can requisition an extraordinary general meeting[78] - A minimum of ten (10) calendar days' notice is required for any general meeting[80] - The Directors may cancel or postpone any duly convened general meeting at any time prior to the meeting, except for meetings requisitioned by shareholders[86] Proceedings and Voting Outlines rules for conducting business at general meetings, defining quorum, voting procedures, and differential voting rights for share classes - The quorum for a general meeting is at least two shareholders present in person or by proxy, holding in aggregate not less than fifty percent (50%) of all votes attaching to all issued shares[83] - On a poll, every shareholder shall have one vote for each Class A Ordinary Share and ten (10) votes for each Class B Ordinary Share they hold[90] - A resolution in writing signed by all shareholders entitled to vote is as valid and effective as if it had been passed at a duly convened general meeting[85] Directors and Management Details the governance structure related to the Board of Directors, covering appointment, removal, remuneration, powers, duties, and delegation Appointment, Removal, and Remuneration Specifies rules for Board composition and compensation, including director appointment by Ordinary Resolution or Board, and removal by Ordinary Resolution - The Board of Directors shall consist of no less than three (3) Directors[98] - The Board may appoint any person as a Director to fill a casual vacancy or as an addition to the existing Board. A Director can also be appointed by an Ordinary Resolution of the Company[99] - A Director can be removed from office by an Ordinary Resolution of the Company[100] Powers, Duties, and Proceedings Outlines extensive powers of Directors to manage business, appoint officers, delegate powers, and details Board meeting proceedings and conflict of interest handling - The business of the Company is managed by the Directors, who may exercise all powers of the Company[107] - The quorum necessary for the transaction of business by the Directors is a majority of the Directors then in office, unless fixed otherwise by the Directors[122] - A resolution in writing signed by all Directors is as valid as if it had been passed at a duly called and constituted meeting[127] Borrowing Powers and The Seal Grants Directors authority to exercise all borrowing powers, including raising money, mortgaging assets, and issuing securities, and specifies company seal protocol - Directors have the discretion to exercise all powers of the Company to raise or borrow money, mortgage or charge its assets, and issue debentures and other securities[115] - The Company's Seal can only be affixed to an instrument with the authority of a resolution from the Directors[116] Financial Provisions Covers the company's financial policies, including dividend declaration, account maintenance, audit procedures, capitalization of reserves, and Share Premium Account Dividends Outlines dividend distribution process, including interim dividends by Directors, final dividends by Ordinary Resolution, and forfeiture of unclaimed dividends - Directors may declare dividends, and the Company may declare dividends by Ordinary Resolution, but no dividend shall exceed the amount recommended by the Directors[132] - Dividends may be paid wholly or partly by the distribution of specific assets with the sanction of an Ordinary Resolution[136] - Any dividend that remains unclaimed for a period of six years from its declaration date may be forfeited by the Board and will revert to the Company[137] Accounts, Audit, and Financial Year Addresses accounting and reporting obligations, including Directors determining book-keeping, auditor appointment, and setting the financial year end - The books of account are always open to inspection by Directors, but shareholders do not have inspection rights except as conferred by law or authorized by the Directors or an Ordinary Resolution[138][140] - The Directors may appoint an auditor for the Company and determine their remuneration[140] - Unless the Directors prescribe otherwise, the financial year of the Company ends on December 31st each year[156] Capitalisation of Reserves and Share Premium Account Allows capitalization of reserves (including Share Premium Account) via Ordinary Resolution to issue fully paid shares or debentures, and mandates Share Premium Account establishment - With the authority of an Ordinary Resolution, the Directors can capitalize amounts from reserves (including Share Premium Account and profit and loss account) to distribute as fully paid shares or debentures to shareholders[142] - The Directors are required to establish a Share Premium Account and credit to it any premium paid on the issue of any share[145] Corporate Administration and Miscellaneous Covers administrative and legal matters, including serving notices, indemnification of directors, winding up procedures, and amending articles Notices and Information Specifies methods for serving notices to shareholders and states that shareholders are not entitled to discover trade secrets or sensitive business information - Notices to shareholders can be served personally, by mail, by electronic mail, by facsimile, or by placing it on the Company's Website (with prior written consent from the member)[146] - Shareholders are not entitled to require discovery of information that is in the nature of a trade secret or which the Board believes is not in the members' interests to communicate to the public[151] Indemnity Provides for indemnification of directors and officers against costs and liabilities incurred in duties, except for dishonesty, willful default, or fraud - Every Director, Secretary, and other officer of the Company is indemnified against all actions, costs, losses, and liabilities incurred in the execution of their duties[154] - This indemnification does not cover liabilities arising from an individual's own dishonesty, wilful default, or fraud[154][155] Winding Up Outlines procedures for distributing assets during winding up, allowing liquidator to divide assets in kind via Special Resolution, and how losses are borne - In a winding-up, the liquidator may, with the sanction of a Special Resolution, divide the company's assets in-specie or in-kind among the members[159] - If assets are insufficient to repay the whole of the share capital, the losses will be borne by members in proportion to the par value of the shares they hold[160] Amendments, Record Dates, and Continuation Details procedures for amending Articles by Special Resolution, Directors fixing record dates, and re-registering the company in another jurisdiction - The Company may amend its Articles of Association at any time by a Special Resolution[161] - To determine shareholder rights for meetings or dividends, the Directors may close the Register of Members for up to 40 days or fix a record date in advance[162][164] - The Company may, by Special Resolution, resolve to be registered by way of continuation in a jurisdiction outside the Cayman Islands[166]