The Board announced that on 24 January 2014, NetDragon BVI, entered into an agreement with Foxteq and Vision Knight Capital, pursuant to which the Parties agree to collaborate in the exploration and business operation in the online education and related application market through the establishment of the WFOE, Fujian 101 and the structure contracts arrangement. The agreement is conditional upon, among other things, approval of or consent to invest in the PRC from the Ministry of Economic Affairs Investment Commission in Taiwan and therefore, the cooperation contemplated under the agreement may or may not materialise. Pursuant to the Agreement, WFOE, Fujian 101 and the structure contracts arrangement will be established for the exploration and business operation in the online education and related application market.

The establishment of the WFOE: It is agreed that the WFOE shall be established as a limited liability company in accordance with the company Law of the PRC and such other applicable laws. The WFOE shall be wholly owned by HK 101. The initial registered capital of the WFOE shall be in the sum of USD 8,000,000 payable by cash and the total investment amount of the WFOE shall be USD 20,000,000.

It is contemplated that the sum of USD 8,000,000 is the initial investment amount for the cooperation and further sum will be invested upon the development of the WFOE and the cooperation. The establishment of Fujian 101: It is also agreed that Fujian 101 shall be established as a limited liability company in the PRC in accordance with the company Law of the PRC and such other applicable laws. The registered capital of Fujian 101 shall be RMB 10,000,000.