Ofa Group

Proposal 1 asks shareholders to grant the Board authority to consolidate all Class A ordinary shares at a ratio of 1-for-10, effective immediately upon implementation at the Board’s discretion. Management frames the consolidation primarily as a tool to raise the per-share trading price to help the Company regain compliance with Nasdaq Listing Rule 5550(a)(2), following Nasdaq’s notice that the company’s closing bid price was below $1.00 for the required period. The mechanics include rounding down fractional shares (resulting in cash payments for fractions), proportional adjustments to authorized shares, par value, and outstanding awards and warrants, and typical accounting impacts such as higher reported EPS and book value per share due to fewer outstanding shares. Key risks disclosed include no assurance the consolidation will achieve sustained price improvement, potential reduced liquidity, and increased odd-lot holdings for some retail investors. The consolidation also has tax and administrative implications for U.S. Holders, who are advised that the company intends to treat the recapitalization as a tax-free recapitalization for U.S. federal income tax purposes (subject to IRS rules and exceptions for fractional-share cash-outs). From a governance standpoint, the Board’s discretionary authority to implement the consolidation if approved concentrates timing and execution control with insiders who collectively control a large majority of voting power, which may affect minority shareholder outcomes. Overall, the proposal is a typical defensive/compliance measure used by issuers to address minimum listing price deficiencies, benefiting the listing status and potentially market perception while carrying dilution-adjusted mechanical consequences and market/liquidity risks that shareholders should weigh.

Proposal 2 requests shareholder approval, as a special resolution contingent on approval of the share consolidation, to adopt a Third Amended and Restated Memorandum and Articles of Association that will replace the Company’s existing governing documents. Management is seeking this approval because the corporate charter and by-laws must be amended to reflect the changed share capital structure and related mechanics resulting from the proposed 1-for-10 consolidation (including adjustments to authorized share amounts, par value, and related procedural provisions). The proposal is procedural but legally necessary: Cayman Islands company law requires amendment filings for such capital structure changes, and the 3rd M&AA is the vehicle for documenting how shares, voting, and corporate governance will operate post-consolidation. The vote requires a higher threshold (two-thirds) as it is a special resolution altering the company’s constitutional documents, and management has included the full text as Annex A. Adopting the 3rd M&AA would allow the registered office provider to file the amendments with the Cayman Registrar and thereby effectuate the legal changes needed to implement the consolidation. There are no specific substantive governance reforms disclosed in the summary beyond capital-structure adjustments; the change primarily formalizes the consolidation and administrative mechanics. Given its contingent nature, shareholders should view this vote in tandem with their decision on Proposal 1: if they support the consolidation, adoption of the 3rd M&AA is necessary to implement it. The Board’s unanimous recommendation for approval reflects that the directors view the charter amendments as ministerial and required to effect the consolidated capital structure.

Proposal 3 seeks shareholder approval of the OFA Group 2026 Equity Incentive Plan, which would create a formal equity-compensation program enabling grants of options, stock appreciation rights, restricted stock, RSUs, performance awards, dividend equivalents and cash awards to employees, directors and consultants. Management argues the Plan is needed to attract, retain and motivate key contributors and to align management and employee interests with shareholders; the Board adopted the Plan effective May 8, 2026 but conditioned its effectiveness on shareholder approval. The Plan includes a share reserve of 3,940,027 Shares (after giving effect to the share consolidation) plus annual increases equal to the lesser of 5% of outstanding shares or a Board-determined smaller amount through 2036, and includes an incentive stock option pool (10,000,000 limit) and recycling mechanics; these features create potential dilution that shareholders should evaluate. Administration is vested in the Board or a committee of non-employee directors with broad discretion over grants, vesting, acceleration, repricing restrictions, and change-in-control treatment, which concentrates compensation control within management and the Board. The Plan contains standard limits on awards to non-employee directors, tax and withholding provisions, equitable adjustment clauses for corporate events, and clawback/recoupment language tied to Company policies. The Company intends to register shares underlying the Plan on Form S-8, which would facilitate issuance and liquidity, and the Plan contemplates compliance with Section 409A and other tax rules. For governance-minded investors, the key considerations are the share reserve size and potential dilution, the breadth of administrator discretion (including repricing/cancellation authority subject to shareholder approval for repricings), and the linkage of awards to performance criteria which can be tailored by the Administrator. The Board’s unanimous recommendation reflects management’s view that the Plan is an important tool for talent management and long-term alignment, but shareholders should weigh dilution and governance safeguards against retention benefits.

Proposal 4 is procedural: it requests shareholder authority to adjourn the meeting to a later date to permit further solicitation of proxies if one or more of the substantive proposals (the consolidation, the 3rd M&AA, or the incentive plan) fail to receive approval. Management typically uses adjournment authority to preserve flexibility to seek additional votes rather than immediately reconvene or abandon the proposals, which can be important when broker non-votes or low turnout could prevent passage. The proposal requires a simple majority and does not itself change corporate rights or structure; rather, it enables additional outreach. Approving the adjournment is generally shareholder-friendly in that it can facilitate additional shareholder outreach and avoid the costs of reconvening separate meetings, but it also extends the period of uncertainty for shareholders. Given that the Board recommends voting for the adjournment only if needed, supporting this procedural measure will not materially alter corporate governance but will give the Board practical ability to complete solicitation efforts if necessary.