20-F/A: Webull Amends 20-F, Details Governance Exemptions

Webull Corporation filed an amendment to its 2024 annual report, clarifying its corporate governance practices as a foreign private issuer and controlled company.

Summary

• Webull Corporation filed Amendment No. 1 to its Annual Report on Form 20-F for the fiscal year ended December 31, 2024.
• The amendment's sole purpose is to update Item 16G regarding corporate governance and include new certifications from the CEO and CFO.
• As a Cayman Islands company listed on Nasdaq, Webull relies on home country practice exemptions from certain Nasdaq corporate governance rules.
• Specific exemptions include not requiring an audit committee with at least three members, not strictly adhering to annual shareholder meeting timing, and not requiring shareholder approval for certain security issuances.
• Webull is a controlled company, with Mr. Anquan Wang owning approximately 79.30% of total voting power through Class B Ordinary Shares.
• As a controlled company, Webull relies on exemptions from Nasdaq rules requiring a majority independent board, independent director nominee selection, and a compensation committee solely of independent directors.
• The company also relies on certain phase-in exemptions for its audit committee.
• CEO Anquan Wang and CFO H. C. Wang provided certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act, affirming the report's compliance and fair presentation of financial condition and results of operations.

Sentiment

Score: 5

Explanation: The filing is a routine amendment to clarify corporate governance disclosures and includes standard CEO/CFO certifications. While the reliance on exemptions might be viewed negatively by some governance-focused investors, it's a disclosure of existing practices rather than new adverse events. No new financial or operational information is presented.

Positives

• The company's CEO and CFO have provided certifications affirming the accuracy and completeness of the annual report, including financial information, and the effectiveness of disclosure controls and procedures.

Negatives

• Reliance on home country corporate governance practices and controlled company exemptions means Webull does not fully comply with all Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.
• Shareholders may be afforded less protection than they would otherwise enjoy under the full Nasdaq corporate governance listing standards.

Risks

• As a company incorporated in the Cayman Islands, Webull is permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards applicable to domestic U.S. companies; these practices may afford less protection to shareholders than they would enjoy if Webull complied fully with Nasdaq corporate governance listing standards.

Future Outlook

Webull Corporation intends to hold annual shareholders meetings in the future if there are matters that require shareholder approval. The company may also choose to follow additional home country practices in the future.

Management Comments

• "Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report." Anquan Wang, CEO and H. C. Wang, CFO (paraphrased from certifications)
• "Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report." Anquan Wang, CEO and H. C. Wang, CFO (paraphrased from certifications)

Industry Context

This amendment primarily addresses Webull's specific corporate governance structure as a foreign private issuer and controlled company, rather than broader industry trends. It highlights the flexibility afforded to such entities under Nasdaq listing rules compared to domestic U.S. companies.

Comparison to Industry Standards

• Webull's audit committee is not required to have at least three members, differing from Nasdaq Rule 5605(c)(2)(A) for U.S. domestic issuers.
• The company is not strictly required to hold an annual meeting of shareholders within one year after the fiscal year-end, unlike Nasdaq Rule 5620 for U.S. domestic issuers.
• Shareholder approval is not required for certain issuances of securities, including equity compensation arrangements, which differs from Nasdaq Rule 5635(c) for U.S. domestic issuers.
• As a controlled company, Webull is exempt from Nasdaq rules requiring a majority independent board, independent director nominee selection, and a compensation committee solely of independent directors, which are standard for non-controlled U.S. domestic issuers.

Corporate Governance

Stakeholder Impact

• Shareholders: May experience less protection due to Webull's reliance on home country and controlled company corporate governance exemptions, which differ from standard Nasdaq requirements for U.S. domestic issuers.

Next Steps

• Webull will hold annual shareholders meetings in the future if there are matters that require shareholder approval.
• The company may choose to follow additional home country practices in the future.

Key Dates

Keywords

Webull Corporation, 20-F/A, Corporate Governance, SEC Filing, Nasdaq, Foreign Private Issuer, Controlled Company, Cayman Islands, Sarbanes-Oxley Act, Shareholder Protection