Chinacast Education (GREY:CAST)

BEIJING, Aug. 27, 2012 /PRNewswire-Asia-FirstCall/ -- ChinaCast Education ("ChinaCast" or the "Company", OTC: CAST), a post-secondary education services provider in China, today announced the closing of a $2.15 million private offering of its Notes and Warrants.

The Notes and Warrants were sold in a private offering to investors, which included many of the Company's long term shareholders, Company Directors, and the Company's Chief Executive Officer and Chief Financial Officer.

The Company intends to use the proceeds from the sale of the Notes to:

• Fund the efforts to retain ownership of schools invalidly removed from the Company
• Fund the efforts to recover cash balances illegally removed from the Company
• Fund the pursuit of criminal charges against Ron Chan, Jiang Xiangyuan and others
• Fund the payment of professional service providers, payroll and other vendors  

The Company relied upon the exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and Rule 506 promulgated thereunder, to effect the sale and issuance of the Notes and Warrants.  The Notes and Warrants have not been registered under the Securities Act or the securities laws of any other jurisdictions, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.  This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the Notes or the Warrants, nor shall it constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.

Further to its prior public filings, the Company hereby provides additional information regarding its investigations into highly questionable activities involving former chairman and chief executive officer Ron Chan Tze Ngon (“Mr. Chan”), former President-China Jiang Xiangyuan (“Mr. Jiang”) and their associates (collectively, “Prior Management)”:

BEIJING, July 30, 2012 /PRNewswire-Asia-FirstCall/ -- ChinaCast Education ("ChinaCast" or the "Company", OTC: CAST), a post-secondary education services provider in China, today provided an update on its internal investigation and asset recovery efforts.

See full list of updates here.

Derek Feng, CAST's current CEO, comments "We are pleased that our disciplined and persistent efforts to combat the wrongdoing and unauthorized actions of Ron Chan, Mr. Jiang and his accomplices are gaining traction. In addition, we have been in dialogue with the universities affiliated with CAST's three private colleges in Wuhan, Chongqing and Guilin and it is clear that they do not wish to be associated with potential criminals like Ron Chan, Mr. Jiang, Mr. Shi or their accomplices. It is extremely fortunate that the management of the three private colleges has maintained the stability of the colleges. Based on preliminary indications total student enrollment in our schools for the upcoming September 2012 term is up compared to the September 2011 term."

Derek Feng continues, "The new management team, loyal employees, devoted board directors, and long term investors are determined to succeed in restoring CAST. We are laser focused on our core mission - speedy recovery of cash and restoration of ownership interest in our private colleges. I strongly urge Ron Chan and his accomplices to come forward to return the Company's assets and to help accelerate the core mission. We are determined to pursue those responsible to the fullest extent possible."

As previously disclosed, on June 19, 2012, ChinaCast Education Corporation (the “Company”) and several of its subsidiaries had filed a lawsuit with the High Court of the Hong Kong Special Administrative Region, Court of First Instance (the “Hong Kong Court”), against former chairman and chief executive officer Ron Chan Tze Ngon, former chief financial officer Antonio Sena, former chief accounting officer Jim Ma, and former president-China Jiang Xiangyuan, alleging that these defendants had converted Company cash and assets and committed various other wrongs against the Company. As previously disclosed, on June 19, 2012, the Hong Kong Court granted an injunction that restricted the defendants from removing their assets from Hong Kong, up to a value of Rmb800 million, and had scheduled a hearing for July 6, 2012, to consider continuing the injunction. Prior to the hearing, Mr. Chan, Mr. Sena and Mr. Ma each affirmed that they will contest the Company’s claims against them. On July 13, 2012, the Hong Kong Court scheduled a new hearing for November 27, 2012, to consider whether the injunction would be continued. Mr. Jiang has not yet appeared before the Hong Kong Court to contest the Company’s claims against him.

See additional Information on Investigations into Questionable Activities

As reported in our current reports on Form 8-K dated May 8, 2012, May 14, 2012, and May 17, 2012, the staff of The NASDAQ Stock Market LLC (“NASDAQ”) made a determination to delist the securities of ChinaCast Education Corporation (the “Company”) and the Company was appealing such determination. On June 21, 2012, after further consideration and taking into account its ongoing investigations into various matters involving former management and its continuing delay in reporting its financial results, the Company withdrew its request to appeal this delisting determination. The hearing for such appeal was scheduled for June 28, 2012. On June 22, 2012, the Company received a letter from the NASDAQ staff advising the Company that trading of its shares will be suspended effective at the open of business on June 25, 2012, and that NASDAQ will file a Form 25 Notification of Delisting with the Securities and Exchange Commission.

Hong Kong Litigation.  On June 19, 2012, the Company and several of its subsidiaries filed an application with the High Court of the Hong Kong Special Administrative Region, Court of First Instance (the “Hong Kong Court”), alleging that former chairman and chief executive officer Ron Chan Tze Ngon, former chief financial officer Antonio Sena, former chief accounting officer Jim Ma, and former president-China Jiang Xiangyuan had committed tortious wrongs against the Company and violated their fiduciary duties and service contracts by individually and in conspiracy using their positions at the Company to further their own businesses, dissipating Company assets through unauthorized borrowings and cash pledges, and converting the Company’s cash and assets (including two and possibly all three of the Company’s private colleges). As part of the application, the Company also sought an injunctive order to freeze the assets of these executives that are located in Hong Kong, and filed a lawsuit against them seeking damages and an accounting of the property which the defendants’ have taken away from the Company as well as interest and legal costs. On June 19, 2012, the Hong Kong Court granted the Company’s application with respect to the injunction, restricting the defendants from removing their assets from Hong Kong, up to a value of Rmb800 million.  The defendants have not yet responded to the injunctive order and, to date, have not acknowledged service of the proceedings against them.  The Hong Kong Court has scheduled a hearing for July 6, 2012, to consider continuing the injunction.

 Bank of Hangzhou Loan. As disclosed in prior public filings, on May 3, 2012, the Bank of Hangzhou sued the Company’s variable interest entity, ChinaCast Li Xiang Co. Ltd. (“CCLX”), for the repayment of Rmb24.8 million in principal and the payment of unpaid interest, default interest and litigation expenses, in connection with a working capital loan facility that CCLX had borrowed. The Bank of Hangzhou also sued the Company’s subsidiary, Yupei Training Information Technology (Shanghai) Ltd., Mr. Chan, Mr. Chan’s wife, chief operating officer Li Wei, Mr. Li’s wife and Mr. Jiang, as guarantors on the loan. The Company has learned that in connection with this litigation, the People’s Court of Xuhui District, Shanghai, has put a home that Mr. Chan owns in Shanghai under temporary seal, restricting his ability to transfer or sell the home. The Company is still assessing what, if any, impact this may have on prior financial statements.

Private Colleges. As disclosed in prior public filings, at least two (and possibly all three) of the Company’s private colleges had been purportedly transferred to third parties by Mr. Chan, Mr. Jiang and/or their associates. The Company is continuing to investigate these unauthorized transfers and considering the legal remedies available to it to recover its interests in the colleges, including by means of invalidating the original transfers and bringing criminal actions against the parties responsible for such transfers. Any legal actions taken by the Company to recover its interests in these colleges could require proceedings that last for a considerable length of time and could ultimately be unsuccessful. The Company is also continuing its discussions with the purported transferees of the colleges to reach a resolution on this matter.

Item 1.01.    Entry into a Material Definitive Agreement.

 

On May 18, 2012, ChinaCast Education Corporation (the “Company”) delivered a borrowing notice and acknowledgement (the “Borrowing Notice”) to a group of lenders consisting of Fir Tree Value Master Fund, L.P. (“Fir Tree Value”), Fir Tree Capital Opportunity Master Fund, L.P. (“Fir Tree Capital” and, collectively with Fir Tree Value, “Fir Tree”), Lake Union Capital Fund, LP (“Lake Union Capital”), Lake Union Capital TE Fund, LP (“Lake Union Capital TE”), MRMP Managers LLC (“MRMP”), Harkness Trust (“Harkness”), Ashford Capital Partners, L.P. (“Ashford”), Anvil Investment Associates, L.P. (“Anvil”) and Columbia Pacific Opportunity Fund L.P. (“Col-Pac”) (each of Fir Tree Value, Fir Tree Capital, Lake Union Capital, Lake Union Capital TE, MRMP, Harkness, Ashford, Anvil and Col-Pac, individually, a “Purchaser” and collectively, the “Purchasers”). Each of the Purchasers is a shareholder of the Company, and Ned Sherwood, a director on the Company’s board and shareholder of the Company, is an investment manager of MRMP.

 

The Borrowing Notice was delivered pursuant to the subsequent advance provisions of Section 5.2 of the Notes and Warrants Purchase Agreement (the “Purchase Agreement”) entered into by and among the Company, the Purchasers and Col-Pac as of April 10, 2012, as described in the Company’s Form 8-K filed on April 16, 2012 (the “Initial Financing Form 8-K”). Further to the Borrowing Notice, each of the Purchasers agreed to purchase additional promissory notes (collectively, the “Second Tranche Notes”) in the aggregate principal amount of $1,096,181.50 and having the same terms (other than an initial interest payment date of November 19, 2012, and a maturity date of May 18, 2013) as the initial promissory notes purchased by such parties pursuant to the Purchase Agreement (the “First Tranche Notes”, and together with the Second Tranche Notes, the “Notes”), which terms are described in the Initial Financing Form 8-K and are incorporated herein by reference. The aggregate principal amount of Notes purchased in the initial financing and second financing is $2,192,363.00.

BEIJING, May 9, 2012 /PRNewswire-Asia-FirstCall/ -- ChinaCast Education Corporation (the "Company", NASDAQ: CAST), a post-secondary education and e-learning services provider in China, announced today that it received a notification from the staff of The NASDAQ Stock Market LLC (the "NASDAQ Staff") that the NASDAQ Staff has made a determination to delist the Company's securities. The NASDAQ decided to delist the Company's securities pursuant to discretionary authority under NASDAQ Listing Rule 5101 and in connection with the Company's failure to file its Form 10-K for the year ended December 31, 2011, as required by NASDAQ Listing Rule 5250(c).

In its notification letter, the NASDAQ Staff has provided the Company until May 9, 2012 to request an appeal hearing on the delisting determination. If the Company does not appeal by such date, trading of the Company's shares of common stock (which have been halted since April 2, 2012) will be suspended at the opening of business on May 11, 2012, and a Form 25NSE will be filed with the Securities and Exchange Commission, which will result in the Company's securities being removed from listing and registration on NASDAQ. The Company expects to submit an appeal request to the NASDAQ Hearings Panel on May 9, 2012. There can be no assurance that the NASDAQ Hearings Panel will grant the request for continued listing.

On April 10, 2012, ChinaCast Education Corporation (the “Company”) entered into a notes and warrants purchase agreement (the “Purchase Agreement”) and a related series of promissory notes (the “Notes”) with a group of lenders consisting of Fir Tree Value Master Fund, L.P. (“Fir Tree Value”), Fir Tree Capital Opportunity Master Fund, L.P. (“Fir Tree Capital” and, collectively with Fir Tree Value, “Fir Tree”), Lake Union Capital Fund, LP (“Lake Union Capital”), Lake Union Capital TE Fund, LP (“Lake Union Capital TE”), MRMP Managers LLC (“MRMP”), Harkness Trust (“Harkness”), Ashford Capital Partners, L.P. (“Ashford”), Anvil Investment Associates, L.P. (“Anvil”) and Columbia Pacific Opportunity Fund L.P. (“Col-Pac”) (each of Fir Tree Value, Fir Tree Capital, Lake Union Capital, Lake Union Capital TE, MRMP, Harkness, Ashford, Anvil and Col-Pac, individually, a “Purchaser” and collectively, the “Purchasers”). Each of the Purchasers is a shareholder of the Company, and Ned Sherwood, a director on the Company’s board and shareholder of the Company, is an investment manager of MRMP.

SHANGHAI, April 2, 2012 /PRNewswire-Asia/ -- Ron Chan, ex Chairman and CEO of ChinaCast Education Corporation (NASDAQ: CAST) has today resigned from the board and issued the following letter to the shareholders:

Dear Shareholders,

I have resigned from the Board of ChinaCast Education Corp. today. I have come to this decision because of serious disagreements that I have with the group of directors who recently has come to control the Board and the Company.

After the election of Ned Sherwood's slate of directors at the annual meeting in January of this year, Mr. Sherwood, and persons acting in concert with him, which I believe to include Daniel Tseung, Derek Fang, funds managed by Fir Tree Partners, and other shareholders, acting in concert and in furtherance of a pre-existing plan, sought to and did take control of the Company.  They then acted to promote their own interests at the expense of the Company and its other shareholders.

For example, Mr. Sherwood's group pushed the Company for a settlement of $2.3 million with Ned Sherwood on his bogus claims against the management and the Company. When Michael Santos and I strongly objected to this settlement, we were essentially pushed out of the Company, notwithstanding our years of loyal and valuable service.  Although I remained on the Board, important decisions were made without any prior communication with me or with the senior management.  Without any proper authorization, Mr. Sherwood, purporting to represent the Board, instructed PRC management to take instruction directly from the Board (i.e. from Mr. Sherwood) and not from the executives (i.e. me). Without proper authorization, Derek Feng announced the removal of Mr. XY Jiang as President, China. Mr. Jiang has been with the Company for 11 years and has been a trusted employee and a partner holding 40% of the VIE company, CCLX.  I have been told that new Company management has been threatening Company employees and creating a hostile and terrifying atmosphere, rendering the Company largely dysfunctional.

In addition, I have personally been threatened by Mr. Sherwood's group with threats of bogus lawsuits, claiming that I have stolen Company property, have sabotaged efforts to complete the Company's filings in a timely manner, and have engaged in insider trading.

Not only are all of these allegations untrue, those who make them know they are untrue and they are doing so, I believe, to distract attention from their own conduct that is severely hurting the Company.  I have retained no Company property; I have done nothing to interfere with the filings; I have always acted in the best interests of the Company and will continue to do so; I have not sold a share of stock of the Company; and I have revealed no non-public information about the Company to anyone.  These heavy handed tactics, based on nothing but falsehoods and apparent desires to promote self-interests, however, seem, unfortunately, to be the way the new Board conducts its business.

This is not the Company that I worked hard to create and grow.  I fear that the direction the Sherwood-led Board is going in will ruin the Company.  Simply put, the current Board and the new executives do not have the experience to run the business.  For those reasons, I am resigning from the Board.

Sincerely,
Ron Chan

BEIJING, April 2, 2012 /PRNewswire-Asia-FirstCall/ -- ChinaCast Education Corporation (the "Company", NASDAQ: CAST), a leading post-secondary education and e-learning services provider in China, announced today that, on March 27, 2012, it had received a letter from NASDAQ staff notifying the Company that it was no longer in compliance with NASDAQ Listing Rule 5250(c)(1) because it had not yet filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2011 with the Securities and Exchange Commission ("SEC").  NASDAQ Listing Rule 5250(c)(1) requires ChinaCast to timely file all required periodic reports with the SEC.  NASDAQ has provided the Company until April 10, 2012 to submit a plan to regain compliance.  Any plan submitted to NASDAQ may not be accepted by NASDAQ or may be subject to review and comment by NASDAQ.  If NASDAQ approves the Company's plan, it can grant the Company an extension period of up to 180 calendar days from the Form 10-K's original due date to regain compliance.

BEIJING, March 28, 2012 /PRNewswire-Asia-FirstCall/ -- ChinaCast Education Corporation ("ChinaCast" or the "Company", NASDAQ: CAST), a leading post-secondary education and e-learning services provider in China, today announced that its board of directors had appointed Doug Woodrum as interim Chief Financial Officer and Secretary, effective immediately, replacing Antonio Sena, who stepped down as Chief Financial Officer and Secretary.

"The appointment of Doug Woodrum, a seasoned executive with years of experience both as a U.S. public company CFO and as an investor in China, highlights our strategy of attracting top talent to ChinaCast and shows our commitment to continue to build upon our position as the leading post-secondary education company in China. His steady hand will keep us on course as we look forward to a new era of success," said Derek Feng, Chairman and CEO of the Company.

"Our immediate priority will be to visit our offices, centers and campuses and work closely with our talented employees to ensure that our students and customers can continue to expect the highest-quality education and services from us," added Feng. "We intend to share our plans for ChinaCast with shareholders and other stakeholders as soon as practicable thereafter."

On March 19, 2012, the Board of Directors of ChinaCast Education Corporation (the “Company”), received a letter dated March 19, 2012 from Michael J. Santos, a member of the Board of Directors and the President-International of the Company, pursuant to which Mr. Santos resigned from the Board of Directors, effective immediately. Mr. Santos will continue to serve as President-International of the Company.

In his resignation letter, Mr. Santos stated (i) his discontent with the manner in which corporate decisions had been made following the election of a new board in January 2012, “given the control of the board by the new slate of independent directors”; (ii) his belief that some corporate decision-making had “adversely affected the Company and its shareholders”; (iii) that “unfounded legal proceedings” and “threats made by certain board members” against him and other members of the management team had “created a hostile and dysfunctional board environment”; and (iv) that these circumstances “greatly inhibit” his ability to continue to perform his fiduciary duties as a board member.

January 4, 2012

Dear Shareholders of ChinaCast Education:

By now you should have received our proxy supplement announcing that the Company's annual meeting has been adjourned to January 10, 2012 at 9:00 a.m. Beijing Standard Time (local time), which is equivalent to 8:00 p.m. EST on Monday, January 9, 2012.

DO NOT RETURN ANY PROXY CARD SENT BY NED SHERWOOD

Ned Sherwood, a current director that the Nominating Committee of your Board of Directors determined was unsuitable to continue serving on the Board, is now sending out his own proxy material and green proxy card in an attempt to get you to reinstate him to his position on your Board of Directors, as well as elect his two hand-picked nominees. We urge you to discard any proxy materials sent to you by Ned Sherwood. Show your support for your Board and management and vote the BLUE proxy card today by telephone or Internet.

A Reality Check

It is the current management team and the Board members on the Company's slate of nominees that have created all value for all CAST shareholders so far, including:

• Securing the necessary education and telecom licenses with the appropriate PRC government regulatory authorities;
• Building one of the largest private, post-secondary companies in China with over 35,000 on-campus students at our 3 universities and 145,000 distance learning students using our nationwide broadband satellite network;
• Growing revenue at an annual compound rate of 40% to $97 million to $99 million in FY2011;
• Growing adjusted net income at an annual compound rate of 52% to $30 million to $32 million in FY2011; and
• Growing total assets to over $471 million (including over 200 acres of real estate) and shareholder equity to $292 million or $5.90 book value per share.

Full Letter

Ned Sherwood, Major Stockholder of ChinaCast Education Corporation, Issues Open Letter to Stockholders

-Urges ChinaCast Stockholders To Vote For His Three Highly Qualified Nominees On The Green Proxy Card Today

NEW YORK-- Dec 27, 2011. (BUSINESS WIRE)--Ned Sherwood, a major stockholder of ChinaCast Education Corporation (Nasdaq GS: CAST), today issued the following letter to all stockholders of the Company:

Dear Fellow ChinaCast Stockholders:

As you may be aware, the Delaware Court of Chancery1 has forced ChinaCast to delay the Annual Stockholders Meeting until January 9, 2012, at 8:00 p.m. EST in order for all stockholders to have adequate time to make a fair and reasoned determination of who should be elected to the Board of CAST. You deserve to have independent voices in the boardroom looking out for your best interests. I urge you to vote FOR my highly qualified independent nominees—Ned Sherwood, Derek Feng and Daniel Tseung—on the GREEN proxy card today.

As a significant stockholder and current member of CAST’s Board of Directors, I wish to state that my major goal is to assure that CAST undergoes, under the direction of a truly independent Special Committee, a full and complete, unbiased process to maximize stockholder value.

I continue to be convinced that CAST has an excellent business model operated by superior Mainland Chinese management and employees. Let me be clear, I do not wish to interfere with the Company’s day-to-day operations in any way. I do, however, have serious concerns with the actions and strategic decisions made by certain of the current Board members.

I am not seeking control of the Company’s Board. Rather, I am seeking to elect three (including myself) of the six Board members at the Annual Stockholders Meeting on January 9th to assure that Board actions are executed in the proper manner at this critical time in CAST’s history. I believe that my three nominees will ensure that the interests of the stockholders, the true owners of ChinaCast, are vigorously represented in the boardroom by truly independent representatives.

Obviously, as a major stockholder, I want the process currently begun by the Special Committee to be run by the most experienced, independent, and professional individuals on our Board (or our Board as constituted after January 9th). I question the current composition of the Special Committee. While both Paul Weiss and Credit Suisse, the outside advisors to the Special Committee, are excellent firms, it is ultimately the Special Committee, and not its advisors, that will determine the best course of action for CAST. This is not a process that can simply be outsourced to a law firm and investment bank.

The Special Committee currently consists of Justin Tang, Stephen Markscheid, and Hope Ni, and it excludes the Board’s two most experienced directors in investment and mergers and acquisition matters—Tseung and me. Mr. Tang, who has been a Director of CAST since 2007 and, to my knowledge, has never voted against any Board resolution, is, in my opinion, a proxy for Ron Chan. The other two committee members, Markscheid and Ni, were never elected to the Company’s Board by stockholders. Ask yourself whether these are the committee members you would select to explore and evaluate strategic alternatives?

I believe that the nominees on the GREEN proxy card are more qualified and will represent your interests better than any of the current members of the Special Committee.

I am sure you will agree once you compare the backgrounds of the three members of the Special Committee with those of Tseung and me, the Board members who were not chosen for the Special Committee.

Tseung has been affiliated with CAST since its founding in 1999. He has over 16 years of experience as a professional investor. From 2000 until 2010, Tseung served as Managing Director of Sun Hung Kai Properties Direct Investments Ltd., the private equity division Sun Hung Kai Properties, one of the largest market-capitalization, publicly-traded companies in Hong Kong. He is an experienced investment professional who knows ChinaCast well.

I have more than 26 years of mergers and acquisitions and private equity experience as the founder of ZS FUND L.P. (“ZS”). Prior to the founding of ZS, I had 11 years of experience in divestitures for W.R. Grace and as a partner of AEA Investors, Inc., an early private equity firm.

If our slate of three directors is elected to the Board, and if certain members of our slate are selected to be on the Special Committee, we plan to do the following:

1) Review the Company’s official projections that have been submitted to the Special Committee. As a director, I have been requesting two to three-year rolling projections at our regularly scheduled Board meetings, to no avail. Since future projections are a key determinant of value, I would like the Special Committee to review the Company’s projections carefully, and with the assistance of its financial advisor, come up with an independent “unbiased projections” for CAST’s future prospects.

2) I want to confirm that the advisors to the Special Committee have been instructed to conduct the broadest and widest process possible (encompassing both strategic and financial buyers). I have been very concerned about references in the Company’s recent open letters to “the deal” as opposed to “the process.”

3) I have also been troubled by Chan’s statement that threatened an exodus of management if our slate were elected. As you know, this threat, which I believe constitutes a breach of fiduciary duty, resulted in our decision to reduce our slate of director nominees from six candidates to three candidates. As such, it is certain that three nominees from the Company’s slate will be re-elected whether you vote for us or not.

As a further precaution, and as an encouragement to strategic buyers to bid for CAST, I plan to suggest, as Chairman of the Compensation Committee, that CAST immediately adopt a generous “Retention Bonus Plan” for the excellent Mainland Chinese management team, including, but not limited to, Li Wei, Xy Jiang, Jim Ma, Donald Gardner, and others. My proposal will include a significant one-time extra bonus payment to each key Mainland Chinese employee who, if a change of control transaction occurs, agrees to remain in the employ of the acquiring company for at least two years post-closing.

Additionally, by including Feng on our slate, I believe that we are further protecting value for all stockholders. Feng was born and educated in Mainland China, advanced his career in the United States at blue-chip companies such as GE, and spent five years as a senior executive at Knowledge Universe, one of the largest education holding companies with more than 40,000 employees globally. In my opinion, his leadership experience and education industry expertise will prove to be a very valuable resource to both management and the CAST Board.

Now is the time for ChinaCast stockholders to protect their best interests by electing three highly-qualified, independent nominees who are committed to maximizing the value of your investment. Please vote your GREEN proxy card today.

If you have any questions or need assistance in voting your GREEN proxy card, please call the firm assisting in the solicitation of proxies, Innisfree M&A Incorporated, toll-free at (888) 750-5834 (banks and brokers call collect at (212) 750-5833)).

Thank you for your support,

Ned Sherwood

BEIJING, Dec. 19, 2011 /PRNewswire-Asia-FirstCall/ -- ChinaCast Education Corporation (the "Company" or "ChinaCast") (Nasdaq GS:CAST), a leading post-secondary education and e-learning services provider in China, today announced that the Audit Committee of its Board of Directors (the "Audit Committee") retained FTI Consulting, Inc., ("FTI"), an independent global advisory firm with extensive expertise in forensic accounting and due diligence, to conduct an independent review of the Company's cash balances as of June 30, 2011.

For no reason other than to counter the bad press a number of Chinese companies has received, the Company voluntarily retained FTI to perform an independent cash confirmation. No question or concern has been raised by the Company's auditors, audit committee or any other relevant professional related to the Company's cash balances.

FTI independently obtained and reviewed documents which state that as of June 30, 2011, ChinaCast had cash, cash equivalents and term deposits totaling US$132.1 million (RMB 845,674,247) held with 29 PRC financial institutions. This total represents 98.5% of the total cash, cash equivalents and term deposit balances reported in the Company's form 10-Q for the second quarter ended June 30, 2011. The remaining 1.5% discrepancy is attributable to the termination of the Company's University of Petroleum e-learning joint venture.

Daniel Tseung, Chairman of the Audit Committee, stated, "We believe the findings contained in the FTI report should provide some comfort to shareholders as to the integrity of the Company's financial reporting and should serve to distinguish the Company from other Chinese companies that have received adverse publicity after failing to provide adequate verifications with respect to their financial statements."

Dear Fellow Stockholders:

On behalf of myself and my affiliated funds, we write to respond to Mr. Chan’s December 14, 2011 open letter to stockholders. To begin with, I want to address the Mainland China management team. All of you are doing an excellent job operating and growing CAST on a day-to-day basis. As a Board member of CAST for the past two years, I have witnessed first-hand the outstanding work you do, and I have particularly enjoyed attending the past two educational conferences in Guilin and Wuhan. I am committed to working with our other Board members to keep our excellent operating management teams in place and helping them grow our Company. My own firm, ZS Fund L.P., prides itself on being associated with excellent operating management teams and helping them grow their companies. Our goal is to expand and continue to develop CAST’s existing universities to continue to develop them into “world class” educational institutions. We support your efforts wholeheartedly.

With regard to the actions of certain members of the current top management and the Board’s actions over the past year, we have different concerns, questions and comments. Many of these questions and concerns were addressed in my previous open letters to stockholders, especially my December 12, 2011 letter, which has resulted in stockholders representing a significant percentage of shares outstanding sending requests to the Company for a short four-week postponement of the Annual Stockholders Meeting, so that all stockholders have adequate time to consider the issues before them. In our view, Mr. Chan has ignored these issues and has failed to adequately explain why he will not allow CAST stockholders an opportunity to fully consider both slates of Board nominees. We strongly believe that the short postponement that many stockholders seek would have no significant adverse effect on the Company.

With respect to more of Mr. Chan’s continued wholly unsubstantiated litany of personal attacks against my character, I have complete confidence that our stockholders will fairly judge me based on facts, not meritless charges, and my unblemished 42-year business career. On issues of substance that are important to you, I will respond.

The most important revelation in the updated letter is Mr. Chan’s statement that “On August 1, 2011, the Board received an unsolicited buyout offer in writing for 100% of the company in an all cash deal at a premium of over 46% to the then current market price of our common stock.” Doing the math is easy, and it is unclear why Mr. Chan was not more forthcoming; the price when calculated per the above description is $7 per share. While Mr. Chan gives you the price, why does he not reveal other terms that are important to CAST stockholders? Did management have involvement in soliciting the so-called “unsolicited” offer, and what would management’s equity position be in the Company post-closing? Why selectively disclose portions of the “offer” including the price but not tell stockholders of other important terms?

Since the Company has approximately 49 million shares outstanding, a $7 price per share translates to a total market value for CAST of approximately $346 million. Focusing only on what Mr. Chan did tell you, I am attaching a simple chart showing what a $7 per share price translates to based on certain objective parameters.

NEW YORK--(BUSINESS WIRE)--Ned Sherwood, a major stockholder of ChinaCast Education Corporation (Nasdaq GS: CAST), today issued the following letter to all stockholders of the Company:

Dear Fellow Stockholders:

On behalf of myself and my affiliated funds, we thank the Company for recently issuing an open letter reiterating its outstanding operating results and accomplishments. As we stated in our December 9 letter to the Board, we take no issue with the management’s operating achievements and we hope that all managers continue to produce stellar results.

We just take issue with the Board’s governance and decisions. I have asked at numerous Board meetings and I ask publicly now:  See full letter

ChinaCast Education Corporation Forms Special Committee

BEIJING , Nov. 15, 2011 /PRNewswire-Asia-FirstCall/ -- ChinaCast Education Corporation (the "Company" or "ChinaCast") (Nasdaq GS: CAST), a leading post-secondary education and e-learning services provider in China , today announced that its Board of Directors has formed a special committee of independent directors to consider all strategic alternatives which would enhance shareholder value after receiving an unsolicited bid for the Company made by a qualified institutional investor at a significant premium to the current market price of the Company's common stock. 

The special committee may retain independent advisors, including an independent financial advisor and legal counsel, to assist it in its work.  No decisions have been made by the special committee with respect to the Company's response to this unsolicited bid.  There can be no assurance that any definitive offer will be made, that any agreement will be executed or that this or any other transaction will be approved or consummated. 

Third Quarter 2011 Results

• Total revenues in the third quarter of 2011 increased 37% to $25.6 million from $18.7 million in the third quarter of 2010 partly due to the acquisition of HIUBC in the third quarter of 2010.
• Adjusted diluted earnings per share excluding share-based compensation expenses, non-cash impairment charges and amortization of acquired intangible assets (non-GAAP) in the third quarter of 2011 were $0.20 compared to $0.16 in the third quarter of 2010.

Ron Chan, Chairman and Chief Executive Officer commented, "Our outstanding third quarter results were driven by another strong start to the 2011-2012 academic school year which commenced in September. Total average enrollment at our universities increased approximately 9% year-on-year while our average tuition rates increased 5%. We continue to reinvest in the expansion of our universities, adding faculty members, new courses, and new facilities to accommodate this growth. We believe that these improvements, which will further enhance our academic rankings, will drive sustained growth in our education business for many years to come."

Added Antonio Sena, Chief Financial Officer, "The key operating metrics that we focus on, enrollment and tuition growth, are trending well in line with our annual guidance. We will continue to carefully evaluate our investment options and deploy capital to areas where we see the greatest potential returns to shareholders."

Financial Outlook for Fiscal Year 2011

For the fiscal year ending December 31, 2011, the Company reiterates its guidance as follows:

• Total net revenue is expected to be between $97 million to $99 million representing a year-on-year increase of 24% to 27%.
• Adjusted net income excluding share-based compensation, amortization of acquired intangibles, gain on disposal of property and equipment and impairment expenses (non-GAAP) is expected to be at the higher end of $32 million to $34 million representing a year-on-year increase of at least 25%.
• Based on the current weighted average shares and the higher tax rate accrual used in computation, adjusted diluted EPS (non-GAAP) is expected to be at the higher end of $0.64 to $0.68.
• Adjusted EBITDA excluding share-based compensation (non-GAAP) is expected to be at the higher end of $50 million to $52 million representing a year-on-year increase of at least 25%.

BEIJING, Oct. 10, 2011 /PRNewswire-Asia/ -- ChinaCast Education ("ChinaCast" or the "Company", Nasdaq GS: CAST), a leading post-secondary education and e-learning services provider in China, today provided a summary of relevant information provided on its shareholder update conference call with investors last Thursday, October 6, 2011, in order to maintain full disclosure practices.

• For the 2011-2012 academic year starting September 2011, post-secondary student enrollment for its Traditional University Group ("TUG") business segment increased 9% year-over-year to over 35,000 total students.  Average tuition rates are expected to increase by approximately 5% year-over-year.
• ChinaCast expects to invest approximately 200 million RMB (US$31.3 million) over the next 12 to 18 months to expand the capacity of the Foreign Trade and Business College ("FTBC") campus from 15,000 to 20,000 students and the Lijiang College ("LJC") campus from 10,000 to 15,000 students.
• The Company received the official renewal licenses from the PRC Ministry of Information Industry for its VSAT satellite and internet content provider telecom/IT services. The licenses are required for ChinaCast to operate its nationwide distance learning services which are part of the E-Learning Group business segment ("ELG").  The renewal of the licenses had no effect on the ELG service operations.

 

For the fiscal year ending December 31, 2011, the Company reiterates its guidance as follows:

• Total net revenue will be between $97 million to $99 million representing a year-on-year increase of at least 24%.
• Adjusted net income excluding share-based compensation, amortization of acquired intangibles, gain on disposal of property and equipment and impairment expenses (non-GAAP) is expected to be at the higher end of $32 million to $34 million representing a year-on-year increase of at least 25%.
• Based on the current weighted average shares and the higher tax rate accrual used in computation, adjusted diluted EPS (non-GAAP) is expected to be at the higher end of $0.64 to $0.68.
• Adjusted EBITDA excluding share-based compensation (non-GAAP) is expected to be at the higher end of $50 million to $52 million representing a year-on-year increase of at least 25%.

 

Ron Chan, Chairman and CEO of ChinaCast Education explained, "It is our intention to always maintain full transparency with our shareholders.  Since we know not everyone was able to participate in the call last Thursday, we took the proactive approach to publicly disclose the material information discussed.  Our business remains strong and we look forward to providing our shareholders further updates to our business when we report our third quarter earnings in early November.

 

October 3, 2011

Dear Fellow Shareholders,

Earlier this year, the Company’s Board of Directors adopted a share buyback program through which it authorized the Company to buy up to $50 million worth of Company stock over a 12 month period commencing on March 16, 2011. Since implementing the program, the Company has re-purchased approximately $5 million worth of stock or over 1 million shares. Yet the price of the Company’s stock has declined and, given the Company’s cash position, some shareholders have expressed concern and confusion because the Company has not bought back more stock at these levels. Viewed as a simple function of stock price and cash on the balance sheet, I understand why some may have concerns. The decision to expedite the buyback, however, is far more complex. Full letter

BEIJING, June 16, 2011 /PRNewswire-Asia/ -- ChinaCast Education Corporation (the "Company" or "ChinaCast") (Nasdaq GS: CAST), a leading post-secondary and e-learning services provider in China, today is providing an update to shareholders.

From May 12, 2011, through June 15, 2011, the Company has repurchased approximately 915,503 shares of stock at an average price of $4.747 under its $50 million corporate share buyback plan

For the full year ending December 31, 2011, the Company reiterates the following financial guidance:

• Total net revenue of $94 million and $96 million, a year-on-year increase of 21% to 23%
• Adjusted net income(1) (non-GAAP) between $32 million to $34 million, a year-on-year increase of 18%-25%
• Based on the weighted average shares used in computation at the end of FY2010 and a higher tax accrual rate for FY2011, an adjusted diluted EPS (non-GAAP) between $0.64 and $0.68, a year-on-year increase of 14%-21%
• Adjusted EBITDA excluding share based compensation (non-GAAP) between $50 million and $52 million, a year-on-year increase of 20% to 25%

First Quarter Results:

• Total revenues increased 43% to $22.8 million
• Adjusted net income (non-GAAP) increased 24% to $7.8 million
• Adjusted diluted EPS (non-GAAP) of $0.16
• Adjusted EBITDA (non-GAAP) increased 40% to $13.3 million
• Share buy-back to commence on May

GeoTeam® Note: 2011 First quarter analyst EPS estimates were $0.15.

"We continue to execute according to plan as both our universities and e-learning services are driving growth across our platform. We believe that the acquisition of Hubei Industrial University Business College ("HIUBC"), the launching of our China University of Petroleum e-learning joint venture, along with enrollment and tuition increases across our existing universities are providing positive momentum," commented Ron Chan, Chairman and Chief Executive Officer.

For the full year ending December 31, 2011, the Company provides the following guidance:

• Total net revenue will be between $94 million to $96 million (a year-on-year increase of 21% to 23%)
• Adjusted net income excluding share-based compensation, amortization of acquired intangibles, gain on disposal of property and equipment and impairment expenses (non-GAAP) will be between $32 million to $34 million (a year-on-year increase of 18% to 25%)
• Based on the current weighted average shares and the higher tax rate accrual used in computation, adjusted diluted EPS of between $0.64 to $0.68
• Adjusted EBITDA excluding share-based compensation (non-GAAP) will be between $50 million to $52 million (a year-on-year increase of 20% to 25%)

Fourth Quarter Highlights:

• Total revenues increased 56% to $25.7 million
• Gross profit increased 28% to $10.2 million; Gross profit margin was 40%
• Net income decreased 279% to ($5.1) million
• Adjusted net income (non-GAAP) increased 31% to $6.1 million; Adjusted net income (non-GAAP) margin was 23.5%
• Adjusted diluted EPS (non-GAAP) of $0.12

"I am pleased to report another successful year of robust growth while achieving key strategic objectives which we believe pave a clear path for future growth," commented Ron Chan, Chairman and Chief Executive Officer.  "First and foremost, we acquired our third accredited university, Hubei Industrial University Business College ("HIUBC"), bringing our total university enrollment to over 32,000 students and adding degree programs in computer engineering, industrial design and law to our curriculum. This expands our geographic presence to central China and further solidifies our position as a leading nationwide operator of accredited universities in China. We also launched our international degree programs by signing inaugural partnerships with two renowned U.S. universities, Seton Hall and The University of North Carolina at Greensboro."

For the full year ending December 31, 2011, the Company provides the following guidance:

 

• Total net revenue will be between $94 million to $96 million (a year-on-year increase of 21% to 23%)
• Adjusted net income excluding share based compensation, amortization of intangibles, gain on disposal of property and equipment, and impairment expenses (non-GAAP) will be between $32 million to $34 million (a year-on-year increase of 18% to 25%)

Please see the latest letter to shareholders from the CEO of ChinaCast regarding analysts' questions

February 8, 2011
 
Dear Shareholders:
 
Happy Chinese New Year of the Rabbit! After a successful 2010, a year in which we made significant progress toward our long-term growth objectives, I would like to update you on the large share trading volume of CAST last week.
 
One factor that may have caused this increase is that our third largest shareholder, DirecTV, recently sold approximately 1.3 million of the 3.0 million shares of our stock they hold (please see the SEC 13G filing dated 2/2/2011, http://cchyy.client.shareholder.com/sec.cfm). As a non-core investment in their portfolio of assets, we view their stock sales as a long-term positive in further expanding our shareholder base and free float. Our management team strongly believes that our Company’s best days are ahead of us, as evidenced by the management team and board of director’s purchase of 1.34 million shares of common stock during the past twelve months, with a total value of $9.54 million.
 
In addition, there is continued volatility in the Chinese small cap market caused by short sellers making allegations against a few U.S.-listed Chinese companies. We have a simple, transparent corporate structure and a straightforward business model. I would highlight the following attributes as reasons why ChinaCast Education Corporation is an easy investment that investors should be confident in:
 
    1. Recurring, service cash business with significant excess demand
    2. Physical assets that grow in value over time
    3. Post-secondary education has high barriers to entry
    4. Management has consistently communicated with investors and hold similar interests as shareholders.

As always, we welcome the opportunity to answer any questions you may have regarding our company. We look forward to seeing many of you at the upcoming conferences in March. Thank you again for your continued support.
 
Regards,
 
Ron Chan Tze Ngon, Chairman and Chief Executive Officer
ChinaCast Education Corporation

Director buys 400,000 shares of stock @ $7.10 for his trust, increasing holdings by 81.6%.

Third Quarter 2010 Highlights:

• Total revenues increased 55% to $18.7 million

• Gross profit increased 19% to $9.1 million; Gross profit margin was 49%

• Operating income increased 32% to $7.5 million; Operating income margin was 40%

• Net income increased 54% to $6.2 million; Net income margin was 33%

• Diluted EPS of $0.12

• Adjusted net income (non-GAAP) increased 59% to $8.0 million; Adjusted net income (non-GAAP) margin was 43%

• Adjusted diluted EPS (non-GAAP) of $0.16 compard to $0.14

• Adjusted EBITDA (non-GAAP) increased 51% to $11.7 million; Adjusted EBITDA margin (non-GAAP) was 62%

• Cash, cash equivalents and term deposits was $150.0 million.  

• Total equity was $276.1 million

Financial Outlook for 2010

For the full year ending December 31, 2010, the Company reaffirmed the following previously provided guidance:

• Total net revenue will be between $78 million to $80 million (a year-on-year increase of 53% to 57%)

• Adjusted net income excluding share based compensation, amortization of intangibles, gain on disposal of property and equipment, and impairment expenses (non-GAAP) will be between $25 million to $27 million (a year-on-year increase of 34% to 44%)

• Adjusted EBITDA excluding share based compensation (non-GAAP) will be between $45 million to $47 million (a year-on-year increase of 58% to 65%)  

 

This is the Company's current and preliminary view, which is subject to change.

The Company believes that its cash and cash equivalents balances, together with its access to financing sources, will continue to be sufficient to meet the working capital needs associated with its current operations on an ongoing basis, although that cannot be assured. Also, it is possible that the Company’s cash flow requirements could increase as a result of a number of factors, including unfavorable timing of cash flow events, the decision to increase investment in marketing and development activities or the use of cash for acquisitions to accelerate its growth.

Second Quarter 2010 Highlights:

• Total revenues increased 46% to $16.3 million
• Gross profit increased 25% to $8.6 million; Gross profit margin was 53%
• Operating income increased 22% to $6.3 million; Operating income margin was 39%
• Net income increased 26% to $4.8 million; Net income margin was 29%
• Diluted EPS of $0.10
• Adjusted net income (non-GAAP) increased 30% to $6.3 million; Adjusted net income (non-GAAP) margin was 39%
• Adjusted diluted EPS (non-GAAP) of $0.13
• Adjusted EBITDA (non-GAAP) increased 33% to $9.5 million; Adjusted EBITDA margin (non-GAAP) was 58%
• Cash and bank balances together with term deposits was $156.9 million. Total equity was $262.8 million.

"We are pleased to report another profitable quarter of strong performance," commented Ron Chan, Chairman and Chief Executive Officer. "We believe our team's performance reflects the strength of our position as a leader in the PRC for-profit, post-secondary education sector and the continued strong demand and favorable market dynamics for post-secondary education services in China. We believe our momentum going into the third quarter 2010 is strong as we expect to make additional investments to further strengthen and extend our market opportunities such as our summer and international education programs on our campuses in Chongqing and Guilin, the launching of our e-learning joint venture with China University of Petroleum and the acquisition of our third accredited university, Hubei Industrial University Business College."

Added Antonio Sena, Chief Financial Officer, "Our operating and profit margins remained quite robust as we continue to expand our business and integrate acquisitions while exercising efficient fiscal management. We've now reached a major milestone in the Company where the percentage of our total revenue from our traditional university business exceeds that of our e-learning business. While we had a substantial increase in share count primarily due to our capital raise in December 2009, we were able to offset this by a 26% increase in net income. Our cash and bank balances increased to $157 million at the end of the second quarter of 2010 and we intend to deploy $66 million of capital for our third university acquisition which we anticipate to close soon."

Financial Outlook for 2010

For the full year ending December 31, 2010, the Company reaffirmed the following previously provided guidance:

• Total net revenue will be between $78 million to $80 million (a year-on-year increase of 53% to 57%)
• Adjusted net income excluding share based compensation, amortization of intangibles, gain on disposal of property and equipment, and impairment expenses (non-GAAP), will be between $25 million to $27 million (a year-on-year increase of 34% to 44%)
• Adjusted EBITDA excluding share based compensation (non-GAAP) will be between $45 million to $47 million (a year-on-year increase of 58% to 65%) 

Added to the GeoSpecial list on October 14, 2009 @ $8.48 

Catalyst: Appeared that EPS was about to go into second gear. Hot Sector.
Peak performance: Reached a high of $8.61 on October 14, 2009.
Current Price: $6.28

Current road block: 2010 eps growth is expected to be lack luster, while 2011 is expected to grow 19%.

Removing from the GeoSpecial list until a catalyst leads EPS growth to accelerate. Long-term, we believe it is plausible that investors may bid the stock to $10.00

Chinacast Education has reaffirmed its previous guidance.

"ChinaCast delivered another strong quarter of revenue growth and improved profitability as we are now providing post-secondary education services to over 11,000 on-campus and 135,000 distance learning students throughout China," said Ron Chan, Chairman and Chief Executive Officer. "As in the USA and other countries, we continue to see healthy growth in the higher education sector in China as students continue to improve their job skills to compete in a tight labor market. The investments we have made in our business are yielding solid improvements in all of our financial operating metrics and we expect this momentum to accelerate with our recently announced MOU to acquire an additional accredited university in China which will further expand our degree offerings while driving future growth. We remain optimistic on the long term growth of the industry and our position as a leading for-profit, post-secondary education service provider." 

Chinacast Education has reaffirmed its previous guidance.

Full Year Fiscal 2009 Guidance Ending December

	2009 Guidance	2008 Reported	Period Change
GAAP Revenue	$49 to $51 million	$42	16.67% to 21%
a Non-GAAP Adjusted Net Income	$14 million to $16 million	$12.0 million	16.67% to 33.33%
b Non-GAAP EPS	$0.39 to $0.45	$0.39	00.00% to 15.38%

^a Non-GAAP EPS Figures exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . For a more complete explanation of the company's definition of non-GAAP please refer to their financial press releases. The GeoTeam® non-GAAP figures may, from time to time,  differ from company supplied figures.

^b The company did not provide EPS guidance.  The GeoTeam calculated an implied EPS guidance figure using the first quarter 2009 diluted outstanding share count.  The omission of company issued EPS guidance  could cause some investors to infer that the company may plan to issue shares during the coming year.   However, commentary in the company's first quarter SEC does not imply a need:

The Company believes that its cash and cash equivalents balances, together with its access to financing sources, will continue to be sufficient to meet the working capital needs associated with its current operations on an ongoing basis, although that cannot be assured. Also, it is possible that the Company’s cash flow requirements could increase as a result of a number of factors, including unfavorable timing of cash flow events, the decision to increase investment in marketing and development activities or the use of cash for acquisitions to accelerate its growth.

Source: GlobeNewswire (May 11, 2009)

Guidance Report:

 "We remain confident about our business and the growth of the education industry in China. Our strategy going forward will be to focus on further expanding our post-secondary degree programs and e-learning services and reducing our operating costs to improve margins while looking for strategic acquisitions that will further expand our footprint in China. While the global economy is experiencing a sharp downturn, we believe the post-secondary education sector in China continues to grow at a healthy pace and we look forward to increasing our market position in 2009," concluded Mr. Chan.

Full Year Fiscal 2009 Guidance Ending December

	2009 Guidance	2008 Reported	Period Change
GAAP Revenue	$49 to $51 million	$42	16.67% to 21%
*Non-GAAP Adjusted Net Income	$14 million to $16 million	$12.0 million	16.67% to 33.33%
**Non-GAAP EPS	$0.46 to $0.52	$0.39	17.95% to 33.33%

*EPS Figures exclude non-operating gains and losses. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information. For a more complete explanation of the company's definition of non-GAAP please refer to their Fourth Quarter financial press release.

**The company did not provide EPS guidance.  The GeoTeam calculated an implied EPS guidance figure using the 2008 outstanding share count.  However, the omission of company issued EPS guidance  could infer that the company may plan to issue shares during the coming year.

Source: GlobeNewswire (March 16, 2009)