China Yanyuan Yuhui National Education Group Inc. Announces Closing of Reverse Merger
On September 25, 2020, China Yanyuan Yuhui National Education Group Inc. (the “Company” or “We” or “YYYH”) entered into a share exchange agreement (the "Share Exchange Agreement") with China Yanyuan Yuhui Intl Education Group Limited, a Seychelles company or “Yuhui Seychelles”, all of the shareholders of Yuhui Seychelles (the “Yuhui Seychelles Shareholders”), pursuant to which we acquired all of the outstanding shares of Yuhui Seychelles (the “Yuhui Seychelles Shares”) from the Yuhui Seychelles Shareholders in exchange for an issuance of 30,000,000 shares of our common stock, representing approximately 95.2% of our outstanding shares of common stock. (the “Yuhui Seychelles Acquisition”). We will have 31,509,972 shares of common stock issued and outstanding post the share exchange.
Pursuant to the Share Exchange Agreement, the Company acquired Yuhui Seychelles and its indirect, controlled subsidiary Beijing Yuhui Technology Co., Ltd (“Beijing Yuhui Technology”), a company that is primarily engaged in family culture education. On September 30, 2020, pursuant to the terms of the Share Exchange Agreement, the Company acquired all of the outstanding equity securities of Yuhui Seychelles from Yuhui Seychelles Shareholders, and Yuhui Seychelles Shareholders transferred and contributed all of its Yuhui Seychelles Shares to the Company. Such securities were not registered under the Securities Act. These securities qualified for exemption under Section 4(2) of the Securities Act since the issuance of securities by us did not involve a public offering.
As a result of the Yuhui Seychelles Acquisition, our consolidated subsidiaries include China Yanyuan Yuhui Intl Education Group Limited or “Yuhui Seychelles”, our wholly-owned subsidiary which is incorporated under the laws of Seychelles, Yanyuan Yuhui Education Technology (Hong Kong) Co., Ltd. or “Yuhui HK”, a wholly-owned subsidiary of Yuhui Seychelles which is incorporated under the laws of Hong Kong, Yanyuan Yuhui (Beijing) Technology Co., Ltd., or “Beijing Yuhui WFOE ”, a wholly foreign owned enterprise of Yuhui HK which is incorporated under the laws of the PRC, and Beijing Yuhui Technology Co., Ltd. or “Beijing Yuhui Technology ”, a limited liability company incorporated under the laws of the PRC which is effectively and substantially controlled by Beijing Yuhui WFOE through a series of Variable interest entity (VIE) agreements, discussed below.
On July 10, 2020, prior to the reverse acquisition transaction, Beijing Yuhui WFOE and Beijing Yuhui Technology and its shareholders Xiaojun QIN, Binsan WU, Jun ZHENG and Lufeng SONG entered into a series of agreements, including an Exclusive Consulting and Service Agreement, an Exclusive Option Agreement, Power of Attorney and Share Pledge Agreement, collectively referred to in this report as variable interest agreements, or “VIE Agreements,” pursuant to which Beijing Yuhui Technology became Beijing Yuhui WFOE’s contractually controlled affiliate. The use of VIE agreements is a common structure used to acquire PRC corporations, particularly in certain industries in which foreign investment is restricted or forbidden by the PRC government. As a result of the VIE Agreements described above, we have consolidated Beijing Yuhui Technology’s historical financial results in our financial statements as a variable interest entity pursuant to Accounting Principles Generally Accepted in the United States of America following the date of the agreements and combined such results prior to the date of the agreements. The VIE Agreements with our Chinese affiliate and its shareholders, which relate to critical aspects of our operations, may not be as effective in providing operational control as direct ownership. In addition, these arrangements may be difficult and costly to enforce under PRC law.
About China Yanyuan Yuhui National Education Group Inc.
China Yanyuan Yuhui National Education Group Inc. is the first national education institution focusing on "family culture education" in China. Relying on an entire industrial chain, the Company, combining Internet and capital integration tools, takes offline institutions as a base, which are supported by the Internet
education platform "Yuhuibang", and provides both the online and offline comprehensive education services covering three major education scenes of school, society and family. The Company also provides services for other education and training institutions. The Company has been committed to empower social education to help build family culture , and promotes the change of education concept within the context of family culture education, and builds an Internet and education technology innovation operation platform taking the "family culture building and education concept" as the core, in order to create a systematic project of "family culture education and building". The Company’s vision and mission is to advocate high quality education to empower family growth.
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