Document and Entity Information
Document and Entity Information - shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Document Information [Line Items] | |||
Document Type | 20-F | ||
Document Registration Statement | false | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Transition Report | false | ||
Document Shell Company Report | false | ||
Entity File Number | 001-38203 | ||
Entity Registrant Name | RYB Education, Inc. | ||
Entity Central Index Key | 0001708441 | ||
Entity Address, Address Line One | 4/F, No. 29 Building | ||
Entity Address, Address Line Two | Fangguyuan Section 1 | ||
Entity Address, Address Line Three | Fangzhuang | ||
Entity Incorporation, State or Country Code | E9 | ||
Entity Address, City or Town | Beijing | ||
Entity Address, Postal Zip Code | 100078 | ||
Entity Address, Country | CN | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Document Accounting Standard | U.S. GAAP | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Shell Company | false | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Auditor Name | Friedman LLP | KPMG Huazhen LLP | Deloitte Touche Tohmatsu Certified Public Accountants LLP |
Auditor Firm ID | 711 | 1186 | 1113 |
Auditor Location | New York, New York | Beijing, China | Beijing, the People’s Republic of China |
Business Contact [Member] | |||
Document Information [Line Items] | |||
Entity Address, Address Line One | 4/F, No. 29 Building | ||
Entity Address, Address Line Two | Fangguyuan Section 1 | ||
Entity Address, Address Line Three | Fangzhuang | ||
Entity Address, City or Town | Beijing | ||
Entity Address, Postal Zip Code | 100078 | ||
Entity Address, Country | CN | ||
Contact Personnel Name | Hao Gu | ||
City Area Code | 86 10 | ||
Local Phone Number | 8767 5611 | ||
Contact Personnel Email Address | guhao@rybbaby.com | ||
ADR | |||
Document Information [Line Items] | |||
Title of 12(b) Security | American depositary shares | ||
Trading Symbol | RYB | ||
Security Exchange Name | NYSE | ||
Common stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 28,035,934 | ||
Class A Ordinary Shares | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 21,086,793 | ||
Class B Ordinary Shares | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 6,949,141 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 65,263 | $ 53,454 |
Term deposits | 215 | 0 |
Accounts receivable (net of allowance for doubtful accounts of $467 and $473 as of December 31, 2020 and 2021, respectively) | 1,300 | 1,844 |
Inventories | 6,130 | 5,773 |
Prepaid expenses and other current assets | 9,344 | 8,927 |
Loan receivables | 107 | |
Total current assets | 82,252 | 70,105 |
Non-current assets | ||
Restricted cash | 993 | 1,127 |
Property, plant and equipment, net | 39,379 | 47,638 |
Goodwill | 42,102 | 46,147 |
Intangible assets, net | 12,737 | 14,179 |
Long-term investments | 169 | 217 |
Deferred tax assets | 22,803 | 21,168 |
Other non-current assets | 8,668 | 14,438 |
Operating lease right-of-use assets | 73,973 | 87,472 |
TOTAL ASSETS | 283,076 | 302,491 |
Current liabilities | ||
Prepayments from customers, current portion (including prepayments from customers of the consolidated VIEs without recourse to the Group of $4,145 and $4,881 as of December 31, 2020 and 2021, respectively) | 4,919 | 4,145 |
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIEs without recourse to the Group of $42,703 and $41,790 as of December 31, 2020 and 2021, respectively) | 55,642 | 54,406 |
Income tax payable (including income tax payable of the consolidated VIEs without recourse to the Group of $17,865 and $19,729 as of December 31, 2020 and 2021, respectively) | 20,888 | 18,592 |
Operating lease liabilities, current portion (including operating lease liabilities of the consolidated VIEs without recourse to the Group of $12,277 and $9,017 as of December 31, 2020 and 2021, respectively) | 13,890 | 16,856 |
Deferred revenue, current portion (including deferred revenue of the consolidated VIEs without recourse to the Group of $29,367 and $23,289 as of December 31, 2020 and 2021, respectively) | 27,019 | 34,351 |
Long-term debt, current portion (including long-term debt of the consolidated VIEs without recourse to the Group of $nil and $nil as of December 31, 2020 and 2021, respectively) | 7 | |
Total current liabilities | 122,358 | 128,357 |
Non-current liabilities | ||
Prepayments from customers, non-current portion (including prepayments from customers of the consolidated VIEs without recourse to the Group of $4,024, and $1,461 as of December 31, 2020 and 2021, respectively) | 1,461 | 4,024 |
Deferred revenue, non-current portion (including deferred revenue of the consolidated VIEs without recourse to the Group of $709, and $255 as of December 31, 2020 and 2021, respectively) | 999 | 1,726 |
Other non-current liabilities (including other non-current liabilities of the consolidated VIEs without recourse to the Group of $9,307 and $8,518 as of December 31, 2020 and 2021, respectively) | 11,645 | 12,519 |
Deferred income tax liabilities (including deferred income tax liabilities of the consolidated VIEs without recourse to the Group of $nil and $217 as of December 31, 2020 and 2021, respectively) | 1,768 | 1,890 |
Operating lease liabilities, non-current portion (including operating lease liabilities of the consolidated VIEs without recourse to the Group of $67,726 and $56,799 as of December 31, 2020 and 2021, respectively) | 65,689 | 76,308 |
TOTAL LIABILITIES | 203,920 | 224,824 |
MEZZANINE EQUITY | ||
Redeemable non-controlling interests | 4,942 | 9,988 |
EQUITY | ||
Ordinary shares (par value of $0.001 per share; 990,000,000 shares authorized; 29,213,801 shares issued and 27,812,754 shares outstanding as of December 31, 2020; 29,213,801 shares issued and 28,035,934 shares outstanding as of December 31, 2021) | 29 | 29 |
Treasury stock | (8,667) | (10,321) |
Additional paid-in capital | 136,504 | 141,094 |
Statutory reserve | 5,164 | 4,652 |
Accumulated other comprehensive loss (income) | 257 | (1,468) |
Accumulated deficit | (65,559) | (71,837) |
Total RYB Education, Inc. shareholders' equity | 67,728 | 62,149 |
Non-controlling interest | 6,486 | 5,530 |
TOTAL EQUITY | 74,214 | 67,679 |
TOTAL LIABILITIES, MEZZANINE EQUITY AND TOTAL EQUITY | $ 283,076 | $ 302,491 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Allowance for doubtful accounts, net | $ 473 | $ 467 |
Prepayments from customers, current portion | 4,919 | 4,145 |
Accrued expenses and other current liabilities | 55,642 | 54,406 |
Income tax payable | 20,888 | 18,592 |
Less: current operating lease liabilities | 13,890 | 16,856 |
Deferred revenue, current portion | 27,019 | 34,351 |
Long-term debt, current portion | 7 | |
Prepayments from customers, non-current portion | 1,461 | 4,024 |
Deferred revenue, non-current portion | 999 | 1,726 |
Other non-current liabilities | 11,645 | 12,519 |
Deferred income tax liabilities | 1,768 | 1,890 |
Operating lease liabilities, non-current portion | $ 65,689 | $ 76,308 |
Ordinary shares, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Ordinary shares, shares authorized (in shares) | 990,000,000 | 990,000,000 |
Ordinary shares, shares issued (in shares) | 29,213,801 | 29,213,801 |
Ordinary shares, shares outstanding (in shares) | 28,035,934 | 27,812,754 |
VIE | ||
Prepayments from customers, current portion | $ 4,881 | $ 4,145 |
Accrued expenses and other current liabilities | 41,790 | 42,703 |
Income tax payable | 19,729 | 17,865 |
Less: current operating lease liabilities | 9,017 | 12,277 |
Deferred revenue, current portion | 23,289 | 29,367 |
Prepayments from customers, non-current portion | 1,461 | 4,024 |
Deferred revenue, non-current portion | 255 | 709 |
Other non-current liabilities | 8,518 | 9,307 |
Deferred income tax liabilities | 217 | |
Operating lease liabilities, non-current portion | $ 56,799 | $ 67,726 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net revenues: | |||
Net revenues | $ 180,313 | $ 109,715 | $ 182,283 |
Cost of revenues: | |||
Total cost of revenues | 149,142 | 116,901 | 155,534 |
Gross profit (loss) | 31,171 | (7,186) | 26,749 |
Operating expenses: | |||
Selling expenses | 2,491 | 1,285 | 2,808 |
General and administrative expenses | 20,286 | 24,313 | 23,775 |
Impairment loss on goodwill | 4,559 | 8,454 | 337 |
Impairment loss on long-lived assets | 2,148 | ||
Total operating expenses | 27,336 | 36,200 | 26,583 |
Operating income (loss) | 3,835 | (43,386) | 166 |
Interest income | 219 | 348 | 858 |
Government subsidy income | 2,491 | 4,591 | 499 |
Gain on disposal of subsidiaries | 439 | 96 | 492 |
Impairment loss on long-term investments | (2,432) | ||
Income (loss) before income taxes | 6,984 | (40,783) | 2,015 |
Less: Income tax expenses | 3,440 | 215 | 3,541 |
Income before loss from equity method investments | 3,544 | (40,998) | (1,526) |
Loss from equity method investments | (15) | (185) | (664) |
Net (loss ) income | 3,529 | (41,183) | (2,190) |
Less: Net income (loss) attributable to non-controlling interest | 189 | (3,903) | 387 |
Decrease in redeemable non-controlling interest | (3,450) | (143) | |
Net (loss) income attributable to ordinary shareholders of RYB Education, Inc. | $ 6,790 | $ (37,280) | $ (2,434) |
Net (loss) income per share attributable to ordinary shareholders of RYB Education, Inc. | |||
Earnings Per Share, Basic | $ 0.24 | $ (1.33) | $ (0.09) |
Earnings Per Share, Diluted | $ 0.23 | $ (1.33) | $ (0.09) |
Weighted average shares used in calculating net loss (income) per ordinary share | |||
Weighted Average Number of Shares Outstanding, Basic | 28,208,734 | 28,122,851 | 28,074,624 |
Weighted Average Number of Shares Outstanding, Diluted | 28,962,480 | 28,122,851 | 28,074,624 |
Services | |||
Net revenues: | |||
Net revenues | $ 172,404 | $ 103,073 | $ 166,183 |
Cost of revenues: | |||
Total cost of revenues | 145,473 | 113,285 | 147,669 |
Products | |||
Net revenues: | |||
Net revenues | 7,909 | 6,642 | 16,100 |
Cost of revenues: | |||
Total cost of revenues | $ 3,669 | $ 3,616 | $ 7,865 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||
Net (loss) income | $ 3,529 | $ (41,183) | $ (2,190) |
Other comprehensive income (loss), net of tax of nil: | |||
Change in cumulative foreign currency translation adjustments | 1,785 | (1,036) | 269 |
Total comprehensive (loss) income | 5,314 | (42,219) | (1,921) |
Less: comprehensive income (loss) attributable to non-controlling interest | (3,201) | (3,330) | 289 |
Comprehensive (loss) income attributable to RYB Education, Inc | $ 8,515 | $ (38,889) | $ (2,210) |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||
Other comprehensive income, tax | $ 0 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total RYB Education, Inc. shareholders' equityCumulative effect adjustment | Total RYB Education, Inc. shareholders' equityCumulative effect adjustment balance | Total RYB Education, Inc. shareholders' equity | Common stockCumulative effect adjustment balance | Common stock | Treasury stockCumulative effect adjustment balance | Treasury stock | Additional paid-in capitalCumulative effect adjustment balance | Additional paid-in capital | Statutory reserveCumulative effect adjustment balance | Statutory reserve | Accumulated other comprehensive (loss) incomeCumulative effect adjustment balance | Accumulated other comprehensive (loss) income | Accumulated deficitCumulative effect adjustment | Accumulated deficitCumulative effect adjustment balance | Accumulated deficit | Noncontrolling interestsCumulative effect adjustment balance | Noncontrolling interests | Cumulative effect adjustment | Cumulative effect adjustment balance | Total |
Balance at beginning of the year (in shares) at Dec. 31, 2018 | 29,213,801 | ||||||||||||||||||||
Balance at beginning of the year at Dec. 31, 2018 | $ 108,729 | $ 29 | $ 135,881 | $ 3,362 | $ (122) | $ (30,421) | $ 4,611 | $ 113,340 | |||||||||||||
Balance at beginning of the year for Redeemable Non-controlling Interest at Dec. 31, 2018 | 1,628 | ||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||
Net loss for the year | (2,577) | (2,577) | 70 | (2,507) | |||||||||||||||||
Net loss attributable to redeemable non-controlling interest | 317 | ||||||||||||||||||||
Settlement of vested shares using treasury shares | (12,000) | $ (12,000) | (12,000) | ||||||||||||||||||
Provision of statutory reserve | 698 | (698) | |||||||||||||||||||
Share-based payments | 3,962 | 3,962 | 3,962 | ||||||||||||||||||
Recognition of redeemable non-controlling interest | 6,895 | ||||||||||||||||||||
Adjustment of redeemable non-controlling interest | (143) | ||||||||||||||||||||
Adjustment of redeemable non-controlling interest | 143 | 143 | 143 | ||||||||||||||||||
Foreign currency translation adjustment | 263 | 263 | (98) | 165 | |||||||||||||||||
Foreign currency translation adjustment | 104 | ||||||||||||||||||||
Contribution by minority interest | 420 | 420 | |||||||||||||||||||
Disposal of non-wholly subsidiaries | (758) | (758) | |||||||||||||||||||
Business acquisitions | 5,151 | 5,151 | |||||||||||||||||||
Balance at end of the year (in shares) at Dec. 31, 2019 | 29,213,801 | 29,213,801 | |||||||||||||||||||
Balance at end of the year at Dec. 31, 2019 | $ 98,108 | 98,520 | $ 29 | $ 29 | $ (12,000) | (12,000) | $ 139,843 | 139,843 | $ 4,060 | 4,060 | $ 141 | 141 | $ (33,965) | (33,553) | $ 9,396 | 9,396 | $ 107,504 | 107,916 | |||
Balance at end of the year for Redeemable Non-controlling Interest at Dec. 31, 2019 | $ 8,801 | 8,801 | |||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||
Cumulative effect adjustment upon adoption of ASC 326 | $ (412) | $ (412) | $ (412) | ||||||||||||||||||
Net loss for the year | (37,280) | (37,280) | (4,915) | (42,195) | |||||||||||||||||
Net loss attributable to redeemable non-controlling interest | 1,012 | ||||||||||||||||||||
Settlement of vested shares using treasury shares | 1,679 | (1,679) | |||||||||||||||||||
Provision of statutory reserve | 592 | (592) | |||||||||||||||||||
Share-based payments | 2,930 | 2,930 | 2,930 | ||||||||||||||||||
Foreign currency translation adjustment | (1,609) | (1,609) | 398 | (1,211) | |||||||||||||||||
Foreign currency translation adjustment | 175 | ||||||||||||||||||||
Contribution by minority interest | 760 | 760 | |||||||||||||||||||
Disposal of non-wholly subsidiaries | (109) | (109) | |||||||||||||||||||
Balance at end of the year (in shares) at Dec. 31, 2020 | 29,213,801 | ||||||||||||||||||||
Balance at end of the year at Dec. 31, 2020 | 62,149 | $ 29 | (10,321) | 141,094 | 4,652 | (1,468) | (71,837) | 5,530 | 67,679 | ||||||||||||
Balance at end of the year for Redeemable Non-controlling Interest at Dec. 31, 2020 | 9,988 | ||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||
Cumulative effect adjustment upon adoption of ASC 326 | (71,837) | ||||||||||||||||||||
Net loss for the year | 3,340 | 3,340 | 515 | 3,855 | |||||||||||||||||
Net loss attributable to redeemable non-controlling interest | (326) | ||||||||||||||||||||
Settlement of vested shares using treasury shares | 1,654 | (1,654) | |||||||||||||||||||
Provision of statutory reserve | 512 | (512) | |||||||||||||||||||
Share-based payments | 2,021 | 2,021 | 2,021 | ||||||||||||||||||
Adjustment of redeemable non-controlling interest | (3,450) | ||||||||||||||||||||
Adjustment of redeemable non-controlling interest | 3,450 | 3,450 | 3,450 | ||||||||||||||||||
Foreign currency translation adjustment | 1,725 | 1,725 | 124 | 1,849 | |||||||||||||||||
Foreign currency translation adjustment | (64) | ||||||||||||||||||||
Capital contribution from non-controlling interest | (1,206) | ||||||||||||||||||||
Contribution by minority interest | 154 | 154 | |||||||||||||||||||
Disposal of non-wholly subsidiaries | (200) | (200) | (291) | (491) | |||||||||||||||||
Acquisition on minority interest | (5,297) | (5,297) | (26) | (5,323) | |||||||||||||||||
Business acquisitions | 540 | 540 | 480 | 1,020 | |||||||||||||||||
Balance at end of the year (in shares) at Dec. 31, 2021 | 29,213,801 | ||||||||||||||||||||
Balance at end of the year at Dec. 31, 2021 | $ 67,728 | $ 29 | $ (8,667) | $ 136,504 | $ 5,164 | $ 257 | $ (65,559) | $ 6,486 | 74,214 | ||||||||||||
Balance at end of the year for Redeemable Non-controlling Interest at Dec. 31, 2021 | 4,942 | ||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||
Cumulative effect adjustment upon adoption of ASC 326 | $ (65,559) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net (loss) income | $ 3,529 | $ (41,183) | $ (2,190) |
Adjustments to reconcile net loss to net cash generated from (used in) operating activities: | |||
Depreciation of property, plant and equipment | 10,555 | 9,239 | 9,296 |
Amortization of intangible assets | 2,493 | 2,431 | 2,224 |
Reduction in the carrying amount of the right-of-use assets | 14,188 | 15,634 | |
Share-based compensation | 2,021 | 2,930 | 3,962 |
Change in allowance for doubtful accounts receivable and other receivables | 6 | 2,893 | 477 |
Change in allowance for loan receivables | (96) | 1,464 | |
Inventories write-down | 166 | 199 | |
Loss on disposal of property, plant and equipment | 99 | 11 | 100 |
Loss from equity method investments | 15 | 185 | 664 |
Impairment loss on long-term investments | 2,432 | ||
Net gain on disposal of subsidiaries | (439) | (96) | (492) |
Impairment loss on goodwill | 4,559 | 8,454 | 337 |
Impairment loss on long-lived assets | 2,148 | ||
Deferred tax benefit | (1,286) | (3,223) | |
Changes in operating assets and liabilities, net of the effect of acquisition: | |||
Accounts receivable | 537 | 631 | (1,724) |
Inventories | (325) | 1,664 | (1,992) |
Prepaid expenses and other current assets | (743) | 157 | 884 |
Deferred tax assets | (2,689) | ||
Other non-current assets | 890 | 719 | (2,255) |
Prepayments from customers | (828) | (243) | (1,415) |
Accrued expenses and other current liabilities | 2,709 | (1,708) | 5,582 |
Operating lease liabilities | (12,181) | (14,289) | |
Income tax payable | 2,296 | 3,663 | 3,353 |
Deferred revenue | (8,060) | (1,447) | 516 |
Other non-current liabilities | (875) | 809 | (1,319) |
Net cash generated from (used in) operating activities | 19,230 | (6,526) | 12,982 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Acquisition of businesses, net of cash acquired | 427 | (417) | (17,949) |
Collection of prepayment for investment | 279 | ||
Investments in term deposits | (215) | (1,881) | |
Proceeds from maturity of term deposits | 1,005 | 868 | |
Proceeds from disposal of subsidiaries | 1,008 | 374 | 1,218 |
Purchase of long-term investments | (22) | (4,800) | |
Purchase of property, plant and equipment | (7,019) | (3,975) | (12,492) |
Proceeds from disposal of property, plant and equipment | 554 | 658 | |
Loans to third parties | (197) | ||
Cash out from disposal of business | (834) | ||
Loan to an investee | (536) | ||
Collection of loans to third parties | 401 | 153 | |
Net cash used in investing activities | (6,429) | (2,585) | (34,378) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Capital contribution from non-controlling interests | 165 | 760 | 420 |
Acquisition of businesses | (1,936) | ||
Acquisition of additional equity interest from non-controlling shareholders | (1,555) | ||
Amount due to related parties | 125 | ||
Repayment of advances from an investee | (124) | ||
Payment made in connection with repurchase of shares | (12,000) | ||
Repayment of long-term debt | (7) | (80) | (63) |
Net cash (used in) generated from financing activities | (1,397) | 556 | (13,454) |
Exchange rate effect on cash and cash equivalents, and restricted cash | 271 | (6,302) | (542) |
Net (decrease) increase in cash and cash equivalents, and restricted cash | 11,675 | (14,857) | (35,392) |
Cash and cash equivalents, and restricted cash at beginning of the year | 54,581 | 69,438 | 104,830 |
Cash and cash equivalents, and restricted cash at end of the year | 66,256 | 54,581 | 69,438 |
Supplemental schedule of cash flow information | |||
Income taxes paid | (3,085) | (921) | (3,451) |
Supplemental schedule of non-cash activities | |||
Acquisition of property, plant and equipment through payable | 1,042 | 478 | |
Payable for investment and business acquisition | $ 550 | $ 613 | $ 575 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2021 | |
ORGANIZATION AND BASIS OF PRESENTATION | |
ORGANIZATION AND BASIS OF PRESENTATION | 1. ORGANIZATION AND BASIS OF PRESENTATION Top Margin Limited was incorporated under the laws of the Cayman Islands on January 11, 2007. In June 2017, Top Margin Limited changed the corporate name into RYB Education, Inc. (the “Company”). The Company, its subsidiaries, its consolidated variable interest entities (“VIEs”) and VIEs’ subsidiaries and kindergartens (collectively the “Group”) are primarily engaged in providing kindergarten educational services, play-and-learn center services, student care services and sale of educational merchandise in the People’s Republic of China (“PRC”) and in Singapore. As of December 31, 2021, details of the Company’s subsidiaries, its VIEs and VIEs’ major subsidiaries and kindergartens were as follows: Date of Percentage of establishment Place of legal ownership Name or acquisition establishment by the Company Principal activities Subsidiaries: Beijing RYB Technology Development Co., Ltd. (“RYB Technology”) December 24, 2007 PRC 100% Investment holding and provision of educational services QIYUAN Education Technology (Tianjin) Co., Ltd (“TJ Qiyuan”) May 18, 2018 PRC 100% Investment holding and provision of educational services Beijing Beilin International Education Co., Ltd. (“BJ Beilin”) September 28, 2018 PRC 90% Investment holding and provision of educational services Precious Companion Group Limited August 4, 2018 Hong Kong 100% Investment holding and provision of educational services Digital Knowledge World Co., Ltd. September 1, 2018 Cayman Islands 100% Investment holding and provision of educational services Digital Education Co., Ltd. September 1, 2018 Hong Kong 100% Investment holding and provision of educational services Beilin International Education Limited September 1, 2018 Hong Kong 100% Investment holding and provision of educational services Global Eduhub Pte Ltd. April 1, 2019 Singapore 82.3% Investment holding and provision of educational services Global Edu (SG) Holding Pte Ltd. April 1, 2019 Singapore 82.3% Investment holding and provision of educational services Global Eduhub Holding Limited April 1, 2019 Hong Kong 82.3% Investment holding and provision of educational services Variable interest entities: Beijing RYB Children Education Technology Development Co., Ltd. (“Beijing RYB”) July 3, 2001 PRC Consolidated VIE Investment holding and provision of educational services Beiyao Technology Development Co., Ltd. (“Beiyao”) June 15, 2018 PRC Consolidated VIE Investment holding and provision of educational services Beijing Haidian District Bozhi Training School (“Bozhi”) September 28, 2018 PRC Consolidated VIE Training services Shanghai Huiliang Technology Development Co., Ltd. (“Shanghai Huiliang”) April 1, 2020 PRC Consolidated VIE Investment holding and provision of educational services Major subsidiaries and kindergartens (1) : Shenzhen RYB Children Education Technology Development Co., Ltd. June 20, 2007 PRC Consolidated VIE Sale of educational merchandise and provision of educational services Beijing Youer Lezhi Technology Development Co., Ltd. April 2, 2014 PRC Consolidated VIE Play-and-learn center services Shanghai Geleli Technology Development Co., June 4, 2019 PRC Consolidated VIE Sale of educational merchandise and provision of educational services NASCANS Pte. Ltd. April 1, 2019 Singapore 82.3% Provision of educational services Beijing Haidian District RYB Multi-Dimension Intelligence Experimental Kindergarten (2) January 10, 2005 PRC Consolidated VIE Kindergarten services Beijing Fengtai District RYB Multi-Dimension Intelligence Experimental Kindergarten (2) April 14, 2005 PRC Consolidated VIE Kindergarten services Beijing Development RYB Bilingual Kindergarten (2) February 21, 2006 PRC Consolidated VIE Kindergarten services Mulberry Learning Centre International Pte Ltd April 1, 2019 Singapore 82.3% Kindergarten services Mulberry Learning Centre Tanjong Pagar Pte Ltd April 1, 2019 Singapore 82.3% Kindergarten services Beijing Chaoyang District RYB Xintiandi Kindergarten (2) April 11, 2011 PRC Consolidated VIE Kindergarten services Changsha Kaifu District RYB Kindergarten (2) March 30, 2012 PRC Consolidated VIE Kindergarten services Hefei Faneng Sunshine Beach Kindergarten (2) January 18, 2013 PRC Consolidated VIE Kindergarten services Beijing Chaoyang District Mulberry Kindergarten (2) July 5, 2013 PRC Consolidated VIE Kindergarten services Changzhou Wujin District RYB New City Villa Kindergarten (2) February 17, 2014 PRC Consolidated VIE Kindergarten services Chongqing North Bank RYB Huarun Central Park Kindergarten May 26, 2014 PRC Consolidated VIE Kindergarten services Changzhou Tianning District Huarun International RYB Kindergarten September 25, 2014 PRC Consolidated VIE Kindergarten services 1. ORGANIZATION AND BASIS OF PRESENTATION Jinan Licheng District RYB Wanxiang New Sky Kindergarten (2) October 30, 2014 PRC Consolidated VIE Kindergarten services Xiamen Siming District RYB Yongniantianshu Kindergarten (2) July 10, 2015 PRC Consolidated VIE Kindergarten services Jinan Licheng District Wangsheren Street RYB Kindergarten (2) October 30, 2016 PRC Consolidated VIE Kindergarten services Beijing Shunyi District RYB City Garden Kindergarten (2) November 1, 2016 PRC Consolidated VIE Kindergarten services Beijing XueErLe Education Technology Co., Ltd December 13, 2016 PRC Consolidated VIE Kindergarten services Beijing Xicheng District RYB Kindergarten (2) January 16, 2017 PRC Consolidated VIE Kindergarten services Xiamen Jimei District RYB Kindergarten (2) April 19, 2017 PRC Consolidated VIE Kindergarten services ZaoZhuang RYB Kindergarten (2) May 1, 2018 PRC Consolidated VIE Kindergarten services Chongqing Liangjiang New District RYB Leyuan Kindergarten Co., Ltd. June 1, 2018 PRC Consolidated VIE Kindergarten services Tengzhou RYB Renhe Tiandi Kindergarten (2) May 1, 2018 PRC Consolidated VIE Kindergarten services Shanghai Peidi Culture Communication Co., Ltd (Shanghai Peidi) July 1, 2018 PRC Consolidated VIE Kindergarten services Alphabet Playhouse Childcare and Learning Centre Pte Ltd April 1, 2019 Singapore 82.3% Kindergarten services Alphabet Playhouse East Coast Pte Ltd April 1, 2019 Singapore 82.3% Kindergarten services Beijing RYB Children Education Technology Development Co., Ltd. July 3, 2001 PRC Consolidated VIE Investment holding and provision of educational services Beijing Digital Knowledge Dream Flying Wanliu Kindergarten Haidian Co. LTD September 30, 2018 PRC Consolidated VIE Kindergarten services Changsha Boyu Education Technology Development Co., LTD October 21, 2019 PRC Consolidated VIE Sale of educational merchandise and provision of educational services Mulberry Learning Centre Alexandra Pte Ltd November 1, 2019 Singapore 82.3% Kindergarten services Shenzhen Longhua District Mulberry Kindergarten (2) January 1, 2019 PRC Consolidated VIE Kindergarten services Little Greenhouse Bukit Batok Pte Ltd April 1, 2019 Singapore 82.3% Kindergarten services Global Eduhub Pte Ltd. April 1, 2019 Singapore 82.3% Investment holding and provision of educational services Beijing Chaoyang District Digital Knowledge Dream Flying Kindergarten (2) September 30, 2018 PRC Consolidated VIE Kindergarten services Little Greenhouse Sengkang Pte Ltd April 1, 2019 Singapore 82.3% Kindergarten services Changsha Tianxin District Yuwentai RYB Kindergarten (2) September 1, 2018 PRC Consolidated VIE Kindergarten services Chongqing RYB leyuan Art Training Co. LTD February 25, 2011 PRC Consolidated VIE Sale of educational merchandise and provision of educational services Guangzhou Yuexiu District RYB Donghai Jiayuan Kindergarten (2) February 29, 2012 PRC Consolidated VIE Kindergarten services Changsha Yuhua District Liudu RYB Kindergarten (2) October 1, 2017 PRC Consolidated VIE Kindergarten services Changsha Furong District RYB Kindergarten Co. LTD September 30, 2017 PRC Consolidated VIE Kindergarten services Little Greenhouse S540 Pte Ltd April 1, 2019 Singapore 82.3% Kindergarten services Guiyang Wudang District RYB Poly Hot Spring Kindergarten (2) August 31, 2013 PRC Consolidated VIE Kindergarten services Chongqing Liangjiang New District RYB Investment Garden City Kindergarten (2) February 28, 2015 PRC Consolidated VIE Kindergarten services Little Greenhouse Childcare & Development Pte Ltd April 1, 2019 Singapore 82.3% Kindergarten services Guangzhou Yuexiu District RYB Wende Road Kindergarten (2) March 30, 2018 PRC Consolidated VIE Kindergarten services Zhuzhou Tianyuan District RYB Kindergarten (2) August 31, 2016 PRC Consolidated VIE Kindergarten services Shenzhen Futian District RYB Tian Golf Longyuan Kindergarten (2) August 31, 2011 PRC Consolidated VIE Kindergarten services Changsha Quantang Street RYB Kindergarten (2) September 1, 2018 PRC Consolidated VIE Kindergarten services Allegiance (Edu) Ptd Ltd April 1, 2020 Singapore 82.3% Kindergarten services Little Greenhouse S553 Pte Ltd April 1, 2019 Singapore 82.3% Kindergarten services Changsha Tianxin District RYB Kindergarten (2) February 28, 2017 PRC Consolidated VIE Kindergarten services (1) The Group had 199 entities including 108 kindergartens as of December 31, 2021. The English name is for identification purpose only. (2) These kindergartens are established and controlled by Beijing RYB, Beiyao or their subsidiaries. Under PRC laws and regulations, entities who establish kindergartens are commonly referred to as “sponsors” instead of “owners” or “shareholders”. The economic substance of “sponsorship” in respect of kindergartens is substantially similar to that of ownership with respect to legal, regulatory and tax matters. 1. ORGANIZATION AND BASIS OF PRESENTATION - continued The VIE arrangements PRC laws and regulations restrict foreign ownership and investment in the education industry at the kindergarten level. As the Company is deemed a foreign legal person under PRC laws, accordingly the Company’s subsidiary is not eligible to engage in the provision of kindergarten services. To comply with these foreign ownership restrictions, the Company operates substantially all of its education services through VIEs and the VIEs’ subsidiaries and kindergartens in the PRC. The VIEs and their subsidiaries and kindergartens hold leases and other assets necessary to provide education services and generate revenues. On July 3, 2008, RYB Technology, a wholly-owned subsidiary of the Group, entered into a series of contractual arrangements with Beijing RYB, and the shareholders of Beijing RYB, through which the Company obtained the power to direct the activities that most significantly affects the economic performance of Beijing RYB and receive the economic benefits that could be significant to Beijing RYB, and became the primary beneficiary of Beijing RYB. The contractual arrangements were modified on September 19, 2011 and November 4, 2015 when there were changes in the shareholders in Beijing RYB. On June 15, 2018, TJ Qiyuan, a wholly-owned subsidiary of the Group, entered into a series of contractual arrangements with Beiyao, and the shareholders of Beiyao, through which the Company obtained the power to direct the activities that most significantly affects the economic performance of Beiyao and receive the economic benefits that could be significant to Beiyao, and became the primary beneficiary of Beiyao. In September 2018, the Group acquired BJ Beilin and Bozhi through the acquisition of Digital Knowledge World Co., Ltd. On September 28, 2018, BJ Beilin, a wholly-owned subsidiary of the Group, entered into a series of contractual arrangements with Bozhi, and the shareholders of Bozhi, through which the Company obtained the power to direct the activities that most significantly affects the economic performance of Bozhi and receive the economic benefits that could be significant to Bozhi, and became the primary beneficiary of Bozhi. The terms of these contractual agreements of Beiyao and Bozhi are substantially similar to the agreements of Beijing RYB, except that the agreements of Bozhi will remain effective for twenty years, when contract duration is applicable. ● Agreements through which the Group receives economic benefits of VIE: Exclusive Consultation and Service Agreement Pursuant to the exclusive consultation and service agreement, Beijing RYB engages RYB Technology as its exclusive operational consultant, and RYB Technology agrees to provide necessary education related consulting services to assist Beijing RYB’s operational activities and business development. Without the prior written consent of RYB Technology, Beijing RYB shall not accept any services subject to this agreement from any third parties. The fees for such consultation and service are determined at RYB Technology’s discretion. Unless RYB Technology terminates this agreement in advance, this agreement will remain effective for ten years. Upon request by RYB Technology, contractual parties to this agreement shall extend the term of this agreement prior to its expiration. Other contractual parties to this agreement cannot terminate this agreement unilaterally. 1. ORGANIZATION AND BASIS OF PRESENTATION The VIE arrangements - continued ● Agreements through which the Group receives economic benefits of VIE: Exclusive Consultation and Service Agreement For the years ended December 31, 2019, 2020 and 2021, $9,877, $4,129 and $4,310 service fees, respectively, were charged by RYB Technology, TJ Qiyuan and BJ Beilin. ● Agreements that provide the Company the power to direct the activities of VIEs: Business Operation Agreement Pursuant to the business operation agreement, Beijing RYB and its shareholders agreed to, (i) without prior written consent of RYB Technology, Beijing RYB will not conduct any transactions that may have substantial effects on its assets, businesses, personnel, obligations, rights, or business operations. (ii) Beijing RYB will accept and follow RYB Technology’s instructions in relation to Beijing RYB’s daily operational and financial management, election of directors, general manager, financial controller, kindergarten principals, and other senior management executives designated by RYB Technology. (iii) the shareholders will transfer any dividends, income, or interests received as the shareholders of Beijing RYB immediately and unconditionally to RYB Technology. Unless RYB Technology terminates this agreement in advance, this agreement will remain effective for ten years. Upon request by RYB Technology, contractual parties to this agreement shall extend the term of this agreement prior to its expiration. Other contractual parties to this agreement cannot terminate this agreement unilaterally. Power of Attorney Pursuant to the power of attorney, each of Beijing RYB’s shareholders irrevocably authorized RYB Technology, or any person(s) designated by RYB Technology, as the attorney-in-fact to act on his or her behalf on all matters pertaining to Beijing RYB and to exercise all of his or her rights as a shareholder of Beijing RYB, including but not limited to convene shareholders’ meeting, vote and sign any resolution as a shareholder, appoint directors, supervisors and officers, amend article of association, as well as the right to sell, transfer, pledge and dispose of all or a portion of the shares held by such shareholder. In addition, each such shareholders also undertakes that he or she will not engage in any activities in violation of this power of attorney or cause conflict of interest between RYB Technology and Beijing RYB or its subsidiaries and kindergartens. The power of attorney will remain in force and irrevocable as long as the applicable shareholder remains a shareholder of Beijing RYB, unless RYB Technology instructs to the contrary in writing. Equity Pledge Agreement Pursuant to the equity pledge agreement, Beijing RYB’s shareholders pledged their respective equity interests in Beijing RYB to RYB Technology to guarantee Beijing RYB’s performance, and shareholders’ obligations under the contractual arrangements between the Beijing RYB, its shareholders and RYB Technology. If Beijing RYB or its shareholders breach their contractual obligations under these agreements, RYB Technology, as a pledgee, will have the right to dispose of the pledged equity interests in Beijing RYB and priority in receiving the proceeds from such disposal. Beijing RYB’s shareholders also agree that, during the term of the equity pledge agreement, they will not dispose of the pledged equity interests or create or allow any encumbrance on the pledged equity interests. 1. ORGANIZATION AND BASIS OF PRESENTATION The VIE arrangements - continued ● Agreements that provide the Company effective control over VIEs: - continued Equity Disposal Agreement Pursuant to the equity disposal agreement, Beijing RYB’s shareholders irrevocably granted RYB Technology or any third parties designated by RYB Technology an exclusive option to purchase all or part of those shareholders’ equity interests in Beijing RYB at any time that RYB Technology deems fit. The purchase price would be the minimum amount of consideration permitted under applicable PRC law at the time when the option is exercised. Those shareholders further undertake that they will not create any pledge or encumbrance on their equity interests in Beijing RYB, and transfer, gift or otherwise dispose of their equity interests in Beijing RYB to any person(s) other than RYB Technology or its designated third parties. This agreement will remain effective for ten years. Upon request by RYB Technology, contractual parties to this agreement shall extend the term of this agreement prior to its expiration. As a result of these contractual arrangements, RYB Technology (1) has the power to direct the activities that most significantly affected the economic performance of Beijing RYB, and (2) received the economic benefits of Beijing RYB. In making the conclusion that the RYB Technology, a wholly owned subsidiary of the Company, is the primary beneficiary of Beijing RYB, the Company believes the Company’s rights under the terms of the equity disposal agreement has provided it with a substantive kick out right. More specifically, the Company believes the terms of the equity disposal agreement are valid, binding and enforceable under PRC laws and regulations currently in effect. The Company also believes that the minimum amount of consideration permitted by the applicable PRC law to exercise the option has not represented a financial barrier or disincentive for the Company to currently exercise its rights under the equity disposal agreement. In addition, the articles of association of Beijing RYB provided that the shareholders of Beijing RYB have the power to, in a shareholders’ meeting: (i) approve the operating strategy and investment plan; (ii) elect the members of board of directors and approve their compensation; and (iii) review and approve the annual budget and earnings distribution plan. Consequently, the Company’s rights under the business operation agreement and powers of attorney have reinforced the Company’s abilities to direct the activities most significantly impacting Beijing RYB’s economic performance. The Company also believes that this ability to exercise control ensured that Beijing RYB would continue to execute and renew service agreements and pay service fees to the Company. By charging service fees, and by ensuring that service agreements were executed and renewed indefinitely, the Company has the rights to receive substantially all of the economic benefits from Beijing RYB. From 2019 to 2021, certain kindergartens of the Group, during the application or renewal process of registration, elected as not-for-profit kindergartens in the PRC and operated in compliance with PRC not-for-profit legal regimes. The Group believes such change does not impact that RYB Beijing is the primary beneficiary of these not-for-profit kindergartens because it has: (1) the power to direct the activities of these not-for-profit kindergartens that most significantly affect their educational and economic performance and (2) the right to receive economic benefits from contractual and other arrangements with these not-for-profit kindergartens that could potentially be significant to these not-for-profit kindergartens. In 2021, at the request of the local education authorities, the Group de-registered a few of the private kindergartens directly operated by the Group and transferred them to public kindergartens which are sponsored by the local education authorities or their designated entities. The forementioned kindergartens has been deconsolidated from the consolidated financial statements since the dates of de-registration and transfer to public kindergartens. 1. ORGANIZATION AND BASIS OF PRESENTATION The VIE arrangements – continued ● Agreements that provide the Company effective control over VIEs: - continued Equity Disposal Agreement On March 1, 2022, the subsidiaries of the Company, RYB Technology and TJ Qiyuan have entered into termination agreements with certain variable interest entities, Beijing RYB and Beiyao. By entering into those termination agreements, the Company will no longer be the primary beneficiary of its directly operated kindergarten business in China (the “Divestiture”). See note 26. ● Risks in relation to VIE structure The Company believes that the contractual arrangements with VIEs and their shareholders are in compliance with existing PRC laws and regulations and are legally enforceable. However, the contractual arrangements are subject to risks and uncertainties, including: ● VIEs and their shareholders may have or develop interests that conflict with the Group’s interests, which may lead them to pursue opportunities in violation of the aforementioned contractual agreements. If the Group cannot resolve any conflicts of interest or disputes between the Group and the shareholders of VIEs, the Group would have to rely on legal proceedings, which could result in disruption of its business, and there is substantial uncertainty as to the outcome of any such legal proceedings. ● VIEs and their shareholders could fail to obtain the proper operating licenses or fail to comply with other regulatory requirements. As a result, the PRC government could impose fines, new requirements or other penalties on VIEs or the Group, mandate a change in ownership structure or operations for VIEs or the Group, restrict VIEs or the Group’s use of financing sources or otherwise restrict VIEs or the Group’s ability to conduct business. ● The PRC government may declare the aforementioned contractual arrangements invalid. They may modify the relevant regulations, have a different interpretation of such regulations, or otherwise determine that the Group or VIEs have failed to comply with the laws and regulations to effectuate such contractual arrangements. ● If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government may restrict or prohibit the Group’s business and operations in China. The Group's ability to conduct its business may be negatively affected if the PRC government were to carry out of any of the aforementioned actions. As a result, the Group may not be able to consolidate VIEs and their subsidiaries and kindergartens in the consolidated financial statements as the Group may lose the ability to obtain the power to direct the VIEs and their shareholders, and the Group may lose the ability to receive economic benefits from VIEs. As of December 31, 2020 and 2021, the VIEs and their subsidiaries and kindergartens accounted for an aggregate of 62% and 61%, respectively, of the Group’s consolidated total assets, and 84% and 81% respectively of the Group’s consolidated total liabilities. 1. ORGANIZATION AND BASIS OF PRESENTATION The VIE arrangements – continued ● Agreements that provide the Company effective control over VIEs: - continued The following financial information of the Company’s VIEs and VIEs’ subsidiaries and kindergartens after the elimination of inter-company transactions and balances as of December 31, 2020 and 2021, and for the three years ended December 31, 2021 was included in the accompanying consolidated financial statements: As of December 31, 2020 2021 Cash and cash equivalents 21,111 32,964 Prepaid expenses and other current assets 7,378 8,219 Total current assets 35,314 47,171 Total assets 186,948 171,872 Total current liabilities 106,357 98,706 Total liabilities 188,123 165,956 For the years ended December 31, 2019 2020 2021 Net revenues 162,644 80,107 142,005 Net income (loss) 13,743 (34,938) 9,339 Net cash provided by (used in) operating activities 14,691 (12,007) 14,041 Net cash used in investing activities (16,360) (2,368) (3,135) Net cash (used in) provided by financing activities (1,457) 460 (820) Effects of exchange rate changes (495) (1,395) 1,632 There are no consolidated VIEs’ assets that are collateral for the VIEs’ obligations and which can only be used to settle the VIEs’ obligations. No creditors (or beneficial interest holders) of the VIEs have recourse to the general credit of the Company or any of its consolidated subsidiaries. No terms in any arrangements, considering both explicit arrangements and implicit variable interests, require the Company or its subsidiaries to provide financial support to the VIEs. However, if the VIEs ever need financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to the VIEs through loans to the shareholders of the VIEs or entrustment loans to the VIEs. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and use of estimates The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions reflected in the Group’s financial statements include, but are not limited to, consolidation of the VIEs, purchase price allocation relating to business acquisitions, valuation allowance for deferred tax assets, useful lives of property, plant and equipment and intangible assets, impairment of long-lived assets, goodwill and long term investments, and incremental borrowing rate for leases. Actual results could materially differ from those estimates. Principles of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries, its VIEs and VIEs’ subsidiaries and kindergartens. All profits, transactions and balances among the Company, its subsidiaries, its VIEs and VIEs’ subsidiaries and kindergartens have been eliminated upon consolidation. Foreign currency translation The Company’s functional currency is the United States dollar. The functional currency of the Company’s subsidiaries, VIEs and VIEs’ subsidiaries and kindergartens in the PRC is the Chinese Renminbi (“RMB”). The functional currency of the Company’s subsidiaries in Singapore is the Singapore dollar (“SGD$”). Assets and liabilities are translated from each entity's functional currency to the reporting currency at the exchange rate on the balance sheet date. Equity accounts are translated at historical exchange rates, and revenues and expenses are translated using the average rate of exchange in effect during the reporting period. Translation adjustments are reported and shown as a separate component of other comprehensive income in the consolidated statements of changes in shareholders' equity and consolidated statements of comprehensive loss (income). Transactions in currencies other than the functional currencies during the year are converted into the applicable functional currencies at the applicable rates of exchange prevailing at the dates of the transactions. Monetary assets and liabilities denominated in currencies other than the functional currencies are remeasured into the functional currency using the applicable exchange rate at the balance sheet date. Exchange gains and losses are recognized in the consolidated statements of operations. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Business Combinations Business combinations are recorded using the acquisition method of accounting. The purchase price of the acquisition is allocated to the tangible assets, liabilities, identifiable intangible assets acquired and non-controlling interest, if any, based on their estimated fair values as of the acquisition date. The excess of the purchase price over those fair values is recorded as goodwill. Acquisition-related expenses are expensed as incurred. Cash and cash equivalents Cash and cash equivalents comprise cash at banks, on hand, which have original maturities of three months or less when purchased and are readily convertible into known amounts of cash. The carrying value of cash equivalents approximates fair value. Term deposits Term deposits consist of deposits placed with financial institutions with an original maturity of greater than three months and less than one year. Restricted cash Restricted cash represents RMB deposits in restricted bank accounts for operating kindergartens as required by certain local regulations. The deposits in restricted bank accounts cannot be withdrawn until these kindergartens are closed. Restricted cash is classified as either current or non-current based on when the funds will be released in accordance with the terms of the respective agreement. Inventories Inventories, mainly consisting of educational toys, teaching aids, and textbooks, are stated at the lower of cost or net realized value. Cost is determined using the weighted average method. Inventory is written down for damaged and slow-moving goods, which is dependent upon factors such as historical and forecasted consumption of the inventories. Fair value Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Fair value - continued Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. Financial instruments The Group’s financial instruments consist primarily of cash and cash equivalents, term deposits, restricted cash, available-for-sale securities, accounts receivable, other receivables, current and non-current loan receivables, amounts due from related parties, current portion of long-term debt, amount due to related parties and other payables. The carrying amounts of cash and cash equivalents, term deposits, restricted cash, accounts receivable, other receivable, current loan receivables, amounts due from related parties, current portion of long-term debt, amount due to related parties and other payable approximate their fair values due to the short-term maturities of these instruments. Available-for-sale securities are carried at fair value. The carrying amount of non-current loan receivables approximates fair value as its interest rates are at the same level of current market yield for comparable loans. Allowance for doubtful accounts Prior to January 1, 2020, an allowance for doubtful accounts is recorded in the period in which a loss is determined to be probable based on an assessment of specific evidence indicating doubtful collection, historical experience, account balance aging and prevailing economic conditions. Allowance is reversed when the underlying balance of doubtful accounts are subsequently collected. Receivable balances are written off when the Group determines that the balance is uncollectible. On January 1, 2020, the Group adopted ASC 326 Financial Instruments – Credit Losses Management used an expected credit loss model for the impairment of financial instruments mentioned above as of period ends. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Allowance for doubtful accounts - continued For the allowance of the accounts receivable, management believes the aging of accounts receivable is a reasonable parameter to estimate expected credit loss, and determines expected credit losses for accounts receivables using an aging schedule as of period ends. The expected credit loss rates under each aging schedule were developed on basis of the average historical loss rates from previous years, and adjusted to reflect the effects of those differences in current conditions and forecasted changes. Management measured the expected credit losses of accounts receivable on a collective basis. When an accounts receivable does not share risk characteristics with other accounts receivables, management will evaluate such accounts receivable for expected credit loss on an individual basis. Doubtful accounts balances are written off and deducted from allowance for credit loss, when receivables are deemed uncollectible, after all collection efforts have been exhausted and the potential for recovery is considered remote. For the allowance of the financial instruments other than accounts receivable and loan receivables, the Group has identified the relevant risk characteristics which include size, type of the services the Group provides, or a combination of these characteristics. Receivables with similar risk characteristics have been grouped into pools. For each pool, the Group considers the historical credit loss experience, current economic conditions, supportable forecasts of future economic conditions, and any recoveries in assessing the lifetime expected credit losses. When specific customers are identified as no longer sharing the same risk profile as their current pool, they are removed from the pool and evaluated separately. Loan receivables Loan receivables are recorded at unpaid principal balances, net of unearned interest income. Prior to January 1, 2020, allowance is recorded to reflect the Group’s best estimate of the amounts that may not be collected. On January 1, 2020, upon adoption of ASC 326 starting from January 1, 2020, the Group establishes current expected credit losses model for loan receivables. The Group calculates the allowance on loan receivables by using a loss-rate approach whereby the loss-rate is determined based on the expectation of future economic conditions, historical collection experience and the possibility of default. The Group determined that the cumulative effect from the adoption of ASC 326 as of January 1, 2020 is immaterial. The Group recorded $nil, $1,464 and $1,441 allowance of loan receivables as of December 31, 2019, 2020 and 2021. 2. SIGNIFICANT ACCOUNTING POLICIES Property, plant and equipment, net Property, plant and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, as follows: Category Estimated useful life Buildings 35 years Furniture, fixture and equipment 5 years Motor vehicles 5 years Leasehold improvement Shorter of lease term or economic life Repair and maintenance costs are charged to expense as incurred, whereas the cost of renewals and betterment that extends the useful lives of property, plant and equipment are capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the cost and accumulated depreciation from the assets and accumulated depreciation accounts with any resulting gain or loss reflected in the consolidated statements of operations. Leases The Group adopted Topic 842 on January 1, 2019 using the modified retrospective transition approach. The Group has lease contracts for offices, kindergartens, play-and-learn centers and student care centers in different cities in the PRC and Singapore under operating leases. The Group determines whether an arrangement constitutes a lease and records lease liabilities and right-of-use assets on its consolidated balance sheets at lease commencement. The Group measures its lease liabilities based on the present value of the total lease payments not yet paid discounted based on the more readily determinable of the rate implicit in the lease or its incremental borrowing rate, which is the estimated rate the Group would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease. The Group estimates its incremental borrowing rate based on an analysis of publicly traded debt securities of companies with credit and financial profiles similar to its own. The Group measures right-of-use assets based on the corresponding lease liability adjusted for payments made to the lessor at or before the commencement date, and initial direct costs it incurs under the lease. The Group begins recognizing lease expense when the lessor makes the underlying asset available to the Group. For leases with lease term less than one year (short-term leases), the Group records operating lease expense in its consolidated statements of operations on a straight-line basis over the lease term and record variable lease payments as incurred. In April 2020, the FASB issued guidance for lease concessions provided to lessees in response to the effects of COVID-19. Such guidance allows lessees to make an election not to evaluate whether a lease concession provided by a lessor should be accounted for as a lease modification, in the event the concession does not result in a substantial increase in the rights of the lessor or the obligations of the lessee. Such concessions would be recorded as negative lease expense in the period of relief. The Group has elected to apply the practical expedient. See Note 15. Intangible assets, net Intangible assets with definite lives are carried at cost less accumulated amortization and impairment. The amortization of such intangible assets is recognized over the expected useful lives of the assets. Intangible assets with indefinite lives are not amortized, but tested for impairment annually or more frequently if event and circumstances indicate that it might be impaired. 2. SIGNIFICANT ACCOUNTING POLICIES Impairment of long-lived assets with definite lives Long-lived assets, including property, plant and equipment, operating lease right-of-use assets, intangible assets with definite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset or asset group may not be recoverable. When these events occur, the Group measures impairment by comparing the carrying value of the long-lived assets or assets group to the estimated undiscounted future cash flows expected to result from the use of the assets or asset group and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets or assets group, the Group would recognize an impairment loss based on the fair value of the assets or assets group. The Group recorded impairment loss on property, plant, and equipment and operating lease right-of-use assets of $ nil , $ 428 and $nil during the years ended December 31, 2019, 2020 and 2021. The Group recorded impairment losses on intangible assets with definite lives of $ 79 , $1,720 and $nil during the years ended December 31, 2019, 2020 and 2021. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Impairment of goodwill and indefinite-lived intangible assets Goodwill is not amortized, but tested for impairment annually or more frequently if event and circumstances indicate that it might be impaired. The guidance permits the Group to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment test. Absent from any impairment indicators, the Group performs its annual impairment test on the last day of each fiscal year Prior to January 1, 2020, the Group performed its annual impairment test using a two-step approach. The first step compares the fair value of a reporting unit to its carrying amount, including goodwill. If the fair value of the reporting unit is greater than its carrying amount, goodwill is not considered impaired and the second step is not required. If the fair value of the reporting unit is less than its carrying amount, the second step of the impairment test measures the amount of the impairment loss, if any, by comparing the implied fair value of goodwill to its carrying amount. If the carrying amount of goodwill exceeds its implied fair value, an impairment loss is recognized equal to that excess. The implied fair value of goodwill is calculated in the same manner that goodwill is calculated in a business combination, whereby the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit, with the excess purchase price over the amounts assigned to assets and liabilities representing the implied fair value of goodwill. On January 1, 2020, the Group adopted ASU No. 2017-04, Intangibles—Goodwill and Other Simplifying the Test for Goodwill Impairment Goodwill is tested for impairment annually for each reporting units or more frequently if events or changes in circumstances indicate that it might be impaired. The Group performs its annual quantitative impairment assessment considering the weighting of both an income and a market approach. The income approach is based on estimated present value of future cash flows for each reporting unit carrying a goodwill balance. The market approach is based on assumptions about how market data relates to each reporting unit carrying a goodwill balance. The weighting of these two approaches is based on their individual correlation to the economics of each reporting unit carrying a goodwill balance. When using discounted cash flow model to determine the fair value of a reporting unit, the discounted cash flow model includes a number of significant unobservable inputs. Key assumptions used to determine the estimated fair value include: (a) internal cash flows forecasts including expected revenue growth, operating margins and estimated capital needs, (b) an estimated terminal value using a terminal year long-term future growth rate determined based on the growth prospects of the reporting units; and (c) a discount rate that reflects the weighted-average cost of capital adjusted for the relevant risk associated with each reporting unit's operation and the uncertainty inherent in the Group's internally developed forecast. The impairment test for intangible assets not subject to amortization consists of a comparison of the fair value of the intangible asset with its carrying value. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Group recorded impairment losses on goodwill of $337, $8,454 and $4,559 during the years ended December 31, 2019, 2020 and 2021. No impairment loss was recorded for the indefinite-lived intangible assets. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Long-term investments The Group’s long-term investments consist of equity method investments and available-for-sale security. (a) Equity method investments For an investee company over which the Group has the ability to exercise significant influence, but does not have a controlling interest in common shares or in-substance common shares, the Group accounts for the investment under the equity method. Significant influence is generally considered to exist when the Group has an ownership interest in the voting stock of the investee between 20% and 50%. Other factors, such as representation on the investee’s board of directors, voting rights and the impact of commercial arrangements, are also considered in determining whether the equity method of accounting is appropriate. Under the equity method, the Group initially records its investments at cost and subsequently recognizes its proportionate share of each equity investee’s net income or loss after the date of investment into earnings and accordingly adjusts the carrying amount of the investment. An impairment charge is recorded if the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The Group estimates the fair value of the investee company using discounted cash flow approach which requires significant judgments, including the estimation of future cash flows, which is dependent on internal forecasts, the estimation of long-term growth rate of a company’s business, the estimation of the useful life over which cash flows will occur, and the determination of the weighted average cost of capital. The Group recorded $nil, $1,819 and $nil of impairment losses on its equity method investments during the years ended December 31, 2019, 2020 and 2021. (a) Available-for-sale securities For investment in preferred shares which is determined to be debt securities, the Group accounts for them as long-term available-for-sale securities when they are not classified as either trading or held-to-maturity investments. Available-for-sale securities are carried at their fair values and the unrealized gains or losses from the changes in fair values are included in accumulated other comprehensive income (loss). The Group reviews its investment in available-for-sale securities, for other-than-temporary impairment based on the specific identification method. The Group considers available quantitative and qualitative evidence in evaluating potential impairment of its investments. When assessing investments for other-than-temporary declines in value, the Group considers, among other factors, general market conditions, government economic plans, the duration and the extent to which the fair value of the investment is less than the cost, and the Group’s intent and ability to hold the investment, in determining if impairment is needed. The Group recorded $nil, $613 and $nil of impairment losses on its available-for-sale securities during the years ended December 31, 2019, 2020 and 2021. Revenue recognition On January 1, 2018, the Group adopted ASC 606 applying the modified retrospective method to all contracts that were not completed as of January 1, 2018. Results for reporting period beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Revenue recognition The Group follows five steps for its revenue recognition under ASC 606: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Group generated its revenues from the following revenue sources: (i) Tuition fees generated from kindergarten services, play-and- learn center services and student care services The Group provides private kindergarten services, play-and-learn centers services and students care centers services to students. Tuition fees are collected in advance and are initially recorded as deferred revenue. Kindergarten services consist of a series of classes which are highly interdependent and interrelated in the context of the contract and each class is not distinct and not sold standalone. Therefore, the kindergarten services are accounted for as a single performance obligation. Play-and-learn center services provide a different series of classes which are highly interdependent and interrelated in the context of the contract and each class is not distinct and not sold standalone. Therefore, play-and-learn center services are accounted for as a single performance obligation. Student care services provide a separate series of classes which are highly interdependent and interrelated in the context of the contract and each class is not distinct and not sold standalone. Therefore, student care services are accounted for as a single performance obligation. The transaction prices for kindergarten services, play-and-learn centers services and student care services are determined by the contract amount net of refund. For the kindergarten program, the students can claim certain amount of the tuition refund, upon withdrawal, if more than a certain number of classes are missed. For the play-and-learn program, students are entitled to refund, upon withdrawal, for unused portion of the prepaid course fees. For the student care services, the students can claim refund, upon withdrawal, if classes are missed due to illness. The refund amount is subject to the refund policy at each facility and the timing of the student’s withdrawal. Revenues for the kindergarten services and student care center services are recognized on a straight line basis over the service period. Revenues for the play-and-learn centers services are recognized ratably over the course of the programs. (ii) Franchising fees The Group generates revenues by franchising kindergartens and play-and-learn centers under the brand name of RYB. The Group collects from franchisees the initial franchising fees and annual franchise fee. As the initial franchising service and annual franchising service are distinct from each other, the Group identifies two performance obligations accordingly. The transaction price is allocated to each performance obligation based on a relative stand-alone selling price. Initial franchising fees represent provision of initial set-up services which are typically received upfront and recorded as prepayments from customers. The set-up period usually begins with the site renovation or training services, whichever is earlier, to the time point when kindergartens or play-and-learn centers commence operations, which is approximately 7 or 8 months. Initial franchising fees are recognized over time throughout the set-up period. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Revenue recognition (ii) Franchising fees – continued Annual franchise fees represent supporting services provided by the Group to the franchised kindergartens or play-and-learn centers. The related annual franchise fees are received upfront and recorded as deferred revenue. Annual franchise fees are recognized over time throughout the contract terms. (iii) Sales of educational merchandise The Group’s educational merchandise consists of educational toys, teaching aids, textbooks and other goods. The Group considers both franchisees and end-users as its customers. Prepayments for sales of educational merchandise is recognized as prepayments from customers. Sales of educational merchandise is accounted for as a single performance obligation, and recognized at the point of time when the control of promised goods is transferred to the customers. (iv) Training services The Group provides training services to the franchised kindergartens and play-and-learn centers. The Group identified the training services as a single performance obligation, and given the trainings are usually performed during a short period of time, revenues are recognized at the point of time when training services are delivered. (v) Royalty fees The Group authorizes its business partners the right to use its educational courses and relevant solutions. The royalty fees are received upfront and recorded as deferred revenue. The Group identified the royalty fees as a single performance obligation, and revenues are recognized over time throughout the contract terms. Disaggregation of revenue The following table presents the Group’s revenues disaggregated by revenue sources. Years ended December 31, 2019 2020 2021 Net revenues: PRC kindergartens 131,427 68,319 128,402 PRC play-and-learn centers 24,901 12,215 13,254 Singapore kindergartens, student care centers and others 19,073 25,964 31,007 Others 6,882 3,217 7,650 Total net revenues 182,283 109,715 180,313 2. SIGNIFICANT ACCOUNTING POLICIES - continued Revenue recognition Disaggregation of revenue The following table presents the Group’s revenues disaggregated by revenue types. Years ended December 31, 2019 2020 2021 Services: Tuition fees from kindergartens, play-and-learn centers and student care centers 147,417 92,123 157,988 Franchise fees 12,269 9,065 10,140 Training and other services 6,156 1,632 4,096 Royalty fees 341 253 180 166,183 103,073 172,404 Products: Sale of educational merchandise 16,100 6,642 7,909 Total net revenues 182,283 109,715 180,313 2. SIGNIFICANT ACCOUNTING POLICIES - continued Revenue recognition Contract liabilities The Group’s contract liabilities consists of prepayments from customers and deferred revenue, primarily relate to the advance consideration received from customers, which include tuition fees received from customers, initial franchise fees and annual franchise fees received from franchisees, advance consideration of educational merchandise received from customers, and royalty fees received from other business partners. The amount from customers before provision of service is recognized as prepayments and when the service is provided, the advance received was recorded in deferred revenue. The prepayments from customers and deferred revenue are recognized as revenue once the criteria for revenue recognition are met. The table below reflects the Group’s contract liabilities: As of December 31, 2020 2021 Prepayments from customers, current portion 4,145 4,919 Prepayments from customers, non-current portion 4,024 1,461 Deferred revenue, current portion 34,351 27,019 Deferred revenue, non-current portion 1,726 999 The Group recognized $ 31,000 There was no contract asset recorded as of December 31, 2020 and 2021. Value added taxes Pursuant to the PRC tax laws, in case of any product sales, generally the value added tax (“VAT”) rate is 17% of the gross sales for general VAT payer before May 1, 2018. Some subsidiaries of the Group are deemed as general VAT payer for the sales of educational merchandise and the intercompany sales. The net VAT balance, after netting off the input VAT, is recorded as accrued expenses and other current liabilities in the Group’s consolidated financial statements. Since May 1, 2018, the VAT rate decreased to 16% of the gross sales for general VAT payer. Therefore, VAT is calculated at 16% on the sales of educational merchandise and paid after deducting input VAT on purchases for the period of May 1, 2018 to March 31, 2019. Since April 1, 2019, the VAT rate decreased to 13% of the gross sales for general VAT payer. Therefore, VAT is calculated at 13% on the sales of educational merchandise and paid after deducting input VAT on purchases since April 1, 2019. Tuition fees generated from kindergarten services in the PRC are qualified for VAT exemption pursuant to a circular jointly released by the Ministry of Finance and Finance and State Administration of Taxation. Revenue generated from other services in the PRC, namely play-and-learn center services, franchise fees, royalty fees, and training services, is reported net of VAT, at a rate of 6%, collected on behalf of PRC tax authorities, except for entities who are designated as a small scale VAT payers. Small scale VAT payer is subject to VAT at a rate of 3% on play-and-learn center services and training services, which was reduced to 1% from March 1, 2020 to December 31, 2021, due to the pandemic of COVID-19. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Value added taxes Goods and Services Tax (“GST”) is a broad-based value added tax in Singapore, which is imposed on all supplies of goods and services in Singapore made by a taxable person for business purposes. GST rate is 7% of the gross sales. Singapore’s entities whose taxable turnover for the past 12 months exceeds SGD$1 million or the taxable turnover in the next 12 months to be more than SGD$1 million should be registered as GST-registered companies. For GST-registered entities, their revenue generated from kindergarten services, student care services and others, is reported net of GST collected on behalf of Singapore tax authorities. For Non-GST registered entities, they are qualified for GST exemption for all kinds of revenue. Income taxes Current income taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred income taxes |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 12 Months Ended |
Dec. 31, 2021 | |
BUSINESS ACQUISITIONS | |
BUSINESS ACQUISITIONS | 3. BUSINESS ACQUISITIONS Acquisition in Shenzhen Ranlo Education investment Co., Ltd. (“Shenzhen Ranlo”) On January 1, 2019, the Group acquired 100% equity interest in Shenzhen Ranlo for cash consideration of $5,985. Shenzhen Ranlo owned and operated a kindergarten located in Shenzhen, PRC. The transaction was considered a business acquisition and recorded using the acquisition method of accounting. The acquired assets and liabilities assumed were recorded at their fair market value at the acquisition date. The management performed a purchase price allocation with the assistance from an independent appraiser, as of the acquisition date: Depreciation or amortization period Cash and cash equivalents 576 Other current assets 789 Property, plant and equipment, net 4,462 5-10 years Operating lease right-of-use assets 2,612 Intangible assets: Student base 145 4 years Other current liabilities (477) Deferred tax liabilities (36) Deferred revenue (245) Operating lease liabilities (2,612) Goodwill 771 Total 5,985 The results of operations attributable to Shenzhen Ranlo are included in the consolidated statement of operations beginning on January 1, 2019, which included net revenue of $1,716 and pre-tax net loss of $661 for the year ended December 31, 2019. 3. BUSINESS ACQUISITIONS - continued Acquisition in Global Eduhub Holding Limited. (“GEH”) On April 1, 2019, the Group acquired 77% equity interest in GEH for cash consideration of $21,414. GEH operates kindergartens and student care centers in Singapore which facilitate the Group to expand its services outside of the PRC. The transaction was considered a business acquisition and therefore was recorded using the acquisition method of accounting. The acquired assets and liabilities assumed were recorded at their fair market value at the acquisition date. The management performed a purchase price allocation with the assistance from an independent appraiser, as of the acquisition date: Depreciation or amortization period Cash and cash equivalents 663 Other current assets 2,224 Property, plant and equipment, net 2,920 5-10 years Operating lease right-of-use assets 5,924 Intangible assets: Student base 3,650 5.67 years Trademark 7,766 Indefinite Initial franchise 1,626 3.75 years Other current liabilities (6,266) Deferred tax liabilities (2,217) Operating lease liabilities (6,062) Non-controlling interest (6,895) Goodwill 18,081 Total 21,414 The results of operations attributable to GEH are included in the consolidated statement of operations beginning on April 1, 2019, which included net revenue of $19,193 and pre-tax net income of $1,310 for the year ended December 31, 2019. As part of this acquisition, the non-controlling shareholders also received a put option to sell their entire non-controlling interests of GEH to the Group based on multiple of GEH’s earnings before interest, taxes, depreciation and amortization for the financial year preceding the date when option is exercised. The non-controlling interests have been recorded as redeemable non-controlling interests presented in the mezzanine equity section of the consolidated balance sheets at an initial amount of $6,895 estimated by the management with the assistance from an independent appraiser. Subsequently, the non-controlling interests were carried at the higher of (1) the initial carrying amount, increased or decreased for the non-controlling interest’s share of net income or loss or (2) the expected redemption value. 3. BUSINESS ACQUISITIONS - continued Acquisition in Shanghai Geleli Technology Development Co.(“Shanghai Geleli”) On June 4, 2019 the Group acquired 51% equity interest in Shanghai Geleli for cash consideration of $5,310. Shanghai Geleli is primarily engaged in sale of children toys and teaching aid tools. The acquisition would further enrich Group’s offering on educational merchandise and services to customers. The transaction was considered a business acquisition and therefore was recorded using the acquisition method of accounting. The acquired assets and liabilities assumed were recorded at their fair market value at the acquisition date. The management performed a purchase price allocation with the assistance from an independent appraiser, as of the acquisition date: Depreciation or amortization period Cash and cash equivalents 1,190 Other current assets 611 Operating lease right-of-use assets 64 Intangible assets: Brand 1,129 5 years Non-compete agreement 347 5 years Customer relationship 87 9.5 years Other current liabilities (177) Deferred tax liabilities (391) Operating lease liabilities (64) Non-controlling interest (4,050) Goodwill 6,564 Total 5,310 The results of operations attributable to Shanghai Geleli are included in the consolidated statement of operations beginning on June 4, 2019, which included net revenue of $1,088 and pre-tax net loss of $77 for the year ended December 31, 2019. Acquisition in Beijing Xingqiba Network Technology Co., Ltd. (“Beijing Xingqiba”) On May 1, 2019, the Group acquired 51% equity interest in Beijing Xingqiba for cash consideration of $1,297. Beijing Xingqiba mainly engages in providing interactive learning software and child art courses, which would supplement well the Group’s online learning platform. This transaction was considered a business acquisition and therefore was recorded using the acquisition method of accounting. The acquired assets and liabilities assumed were recorded at their fair market value at the acquisition date. As of December 31, 2021, consideration payable of $628 3. BUSINESS ACQUISITIONS - continued Acquisition in Beijing Xingqiba Network Technology Co., Ltd. (“Beijing Xingqiba”) The management performed a purchase price allocation with the assistance from an independent appraiser, as of the acquisition date: Depreciation or amortization period Cash and cash equivalents 2 Other current assets 20 Intangible assets: Software and courses 208 5 years Non-compete agreement 297 6 years Exclusive agent agreement 30 0.67 year Other current liabilities (26) Deferred tax liabilities (134) Non-controlling interest (1,130) Goodwill 2,030 Total 1,297 The results of operations attributable to Beijing Xingqiba are included in the consolidated statement of operations beginning on May 1, 2019, which included net revenue of $230 and pre-tax net loss of $343 for the year ended December 31, 2019. Acquisition in Mulberry Learning Centre Alexandra Pte. Ltd. (“Mulberry Alexandra”) On November 1, 2019, the Group acquired 100% equity interest in Mulberry Learning Centre Alexandra Pte. Ltd., a kindergarten located in Singapore, for cash consideration of $1,047. This transaction was considered a business acquisition and therefore was recorded using the acquisition method of accounting. The acquired assets and liabilities assumed were recorded at their fair market value at the acquisition date. The management performed a purchase price allocation with the assistance from an independent appraiser, as of the acquisition date: Depreciation or amortization period Cash and cash equivalents 283 Other current assets 67 Property and equipment, net 91 5-10 years Operating lease right-of-use assets 557 Intangible assets: Student base 190 5.17 years Other current liabilities (431) Deferred tax liabilities (47) Operating lease liabilities (557) Goodwill 894 Total 1,047 3. BUSINESS ACQUISITIONS - continued Acquisition in Mulberry Learning Centre Alexandra Pte. Ltd. (“Mulberry Alexandra”) - continued The results of operations attributable to Mulberry Alexandra are included in the consolidated statement of operations beginning on November 1, 2019, which included net revenue of $236 and pre-tax net income of $70 for the year ended December 31, 2019. Acquisition in Shanghai Xuanfeng Education Technology Co., Ltd. (“Xuanfeng”) Xuanfeng is the parent of Shanghai Jinfeng Kindergarten Co., Ltd. (“Jinfeng Kindergarten”) located in Shanghai, PRC. Shanghai Peidi is one of the Group’s subsidiaries who operates JES Island Kindergarten. On November 1, 2021, the Group acquired 55% equity interest in Xuanfeng for a cash consideration of RMB 1 Yuan and the transfer of JES Island Kindergarten’s operational assets including student base, curriculum and management team to Jinfeng Kindergarten. This transaction was considered a business acquisition and the Group was identified as the acquirer. The acquired assets and liabilities assumed were recorded at their fair market value at the acquisition date. Since the Group controls Shanghai Peidi and JES Island Kindergarten before and after the acquisition, the Group recognized the assets and liabilities transferred from JES Island Kindergarten to Jinfeng Kindergarten at their carrying amounts. No gain or loss was recognized in earnings for the difference between the fair value and the carrying amounts of the assets and liabilities. The reduction in the Group’s equity interest in JES Island kindergarten’s transferred assets from 100% to 55% was recorded as an adjustment to APIC. The following table summarized the fair value of the acquired assets and liabilities which were determined with the assistance from an independent appraiser as of the acquisition date: Depreciation or amortization period Cash and cash equivalents 426 Other current assets 162 Operating lease right-of-use assets 4,326 Intangible assets: Student base 188 3.2 years Other current liabilities (456) Deferred tax liabilities (47) Operating lease liabilities (3,970) Non-controlling interest (480) Goodwill 391 Additional paid in capital (540) Total — The non-controlling interest of $480 The results of operations attributable to Xuanfeng are included in the consolidated statement of operations beginning on November 1, 2021, which included net revenue of $nil and pre-tax net loss of $225 for the year ended December 31, 2021. The pro forma result of operation for the subsidiary acquired in 2021 has not been presented because it is not material to the consolidated results of operations. |
CASH AND CASH EQUIVALENTS, AND
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH | 12 Months Ended |
Dec. 31, 2021 | |
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH | |
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH | 4. CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH A reconciliation of cash and cash equivalents, and restricted cash in the consolidated balance sheets to the amounts in the consolidated statement of cash flows is as follows: As of December 31, 2020 2021 Cash and cash equivalents 53,454 65,263 Restricted cash 1,127 993 Cash and cash equivalents, and restricted cash 54,581 66,256 |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended |
Dec. 31, 2021 | |
ACCOUNTS RECEIVABLE, NET | |
ACCOUNTS RECEIVABLE, NET | 5. ACCOUNTS RECEIVABLE, NET Accounts receivable, net consisted of the following: As of December 31, 2020 2021 Accounts receivable 2,311 1,773 Less: allowance for doubtful accounts (467) (473) Accounts receivable, net 1,844 1,300 Movement of allowance for doubtful accounts was as follows: As of December 31, 2020 2021 Balance at beginning of the year 92 467 Adoption of ASC326 343 — Addition 15 30 Foreign currency adjustment 17 (24) Balance at end of the year 467 473 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2021 | |
INVENTORIES | |
INVENTORIES | 6. INVENTORIES Inventories consisted of the following: As of December 31, 2020 2021 Educational merchandise 5,773 6,130 The Group recorded $199 and $166 write-downs of inventories from the carrying amount to their net realizable values for the years ended December 31, 2020 and 2021, respectively. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 7. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following: As of December 31, 2020 2021 Prepaid service fees 2,196 1,781 Prepaid rental expenses (1) 637 935 Staff advances 528 662 Prepayment for inventories and others 368 283 Government subsidy receivables 2,856 3,192 Receivables from the disposal of subsidiaries and investment (2) 2,589 2,636 Receivables from third party payment platform 306 331 Others 2,325 2,411 11,805 12,231 Less: allowance for doubtful accounts (2,878) (2,887) 8,927 9,344 (1) The Group adopted Topic 842 on January 1, 2019 using the modified retrospective transition approach allowed under ASU 2018-11 as described in Note 2. The balance as of December 31, 2020 and 2021 represented prepaid rental expenses for short-term leases which the Group elected not to record on balance sheets under Topic 842. The prepaid rental expenses for operating lease expenses over one year as of December 31, 2020 and 2021 were included in the Group’s operating lease right-of-use assets on its consolidated balance sheet. (2) The balance as of December 31, 2020 and 2021 included $1,909 receivable from the principal shareholder of the Company’s investee, Beijing Da Ai Pre-school Management Education Technology Co., Ltd. 100% valuation allowance for doubtful accounts was recorded for the total balance of the receivable as of December 31, 2020 and 2021, respectively (see Note 12). The other balance as of December 31, 2021 represented the receivables from de-registration and transfer of the six kindergartens in 2021 (see Note 1). |
LOAN RECEIVABLES
LOAN RECEIVABLES | 12 Months Ended |
Dec. 31, 2021 | |
LOAN RECEIVABLES | |
LOAN RECEIVABLES | 8. LOAN RECEIVABLES On May 21, 2018, the Group provided a loan of $574 to a third party supplier, and the interest rate was set at the commercial bank deposit rate. The maturity date of the loan was December 30, 2019. In 2019, the maturity date was extended to December 31, 2020. The Group recorded $574 credit loss for the year ended December 31, 2020. No credit loss was recorded for the years ended December 31, 2019. The third party supplier repaid $155 during year ended December 31, 2021 and the Group reversed allowance of such amount for the year ended December 31, 2021. In August 2018, the Group provided a loan of $575 to Shanghai Peidi’s non-controlling shareholder at interest rate of 7% per annum. The repayment of the loan was guaranteed by 20% equity shares of another company held by the borrower and the loan will be repaid on the second anniversary of the loan origination. The borrower repaid $153 in December 2020 and the maturity date of remaining balance was extended to March 30, 2021 at the same time. The Group recorded $354 credit loss for the year ended December 31, 2020. The borrower then repaid $217 in September 2021 and the Group reversed loan allowance of $109 accordingly for the year ended December 31, 2021. 8. LOAN RECEIVABLES - continued From July to December 2020, the Group provided interest-free loans of $536 in total to Beijing Rui Le Further Education Technology Co., Ltd (“Beijing Rui Le”), an investee of the Group (See Note 10). The maturity date was 6 months from the loan origination. The Group recorded the total amount of loan receivables as credit loss for the year ended December 31, 2020. During year ended December 31, 2021, the Group provided an interest-free loan of $168 to Beijing Ruile and the Group recorded credit loss of such amount. On January 1, 2020, upon adoption of ASC 326, the Group establishes current expected credit losses model for loan receivables and determined that the cumulative effect from the adoption of ASC 326 is immaterial. |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2021 | |
PROPERTY, PLANT AND EQUIPMENT, NET | |
PROPERTY, PLANT AND EQUIPMENT, NET | 9. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment consisted of the following: As of December 31, 2020 2021 Buildings 956 978 Furniture, fixture and equipment 14,913 15,397 Leasehold improvement 80,464 79,469 Motor vehicles 1,130 971 Total 97,463 96,815 Less: Accumulated depreciation (49,428) (57,248) Impairment (397) (188) 47,638 39,379 Depreciation expenses were $9,296, $9,239 and $10,555 for the years ended December 31, 2019 2020 and 2021, respectively. The Group recorded impairment loss for the property, plant and equipment of $nil, $374 and $nil |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2021 | |
GOODWILL | |
GOODWILL | 10. GOODWILL The Group has ten reporting units where they carry goodwill resulting from acquisitions. The changes in carrying amount of goodwill for the years ended December 31, 2020 and 2021 were as follows. As of December 31, 2020 2021 Costs: Beginning balance 53,024 54,938 Addition 210 391 Disposal — (796) Foreign currency adjustment 1,704 1,440 Ending balance 54,938 55,973 Goodwill impairment (8,791) (13,871) Goodwill, net 46,147 42,102 10. GOODWILL - continued Goodwill was tested for impairment in the fourth quarter of 2021 for each reporting units. The Group performed its quantitative impairment assessment considering the weighting of both an income and a market approach. The income approach is based on estimated present value of future cash flows for each reporting unit carrying a goodwill balance. The market approach is based on assumptions about how market data relates to each reporting unit carrying a goodwill balance. The weighting of these two approaches is based on their individual correlation to the economics of each reporting unit carrying a goodwill balance. The fair value of each reporting unit was estimated using a discounted cash flow methodology after considered and weighed the market approach. The discounted cash flow analysis requires significant estimates, including projections of future operating results and cash flows of each reporting unit that are based on internal budgets and strategic plans, expected long-term growth rates, terminal values, weighted average cost of capital and the effects of external factors and market conditions. When using discounted cash flow model to determine the fair value of each reporting unit, the discounted cash flow model included a number of significant unobservable inputs. Key assumptions used to determine the estimated fair value include: (a) internal cash flows forecasts including expected revenue growth, operating margins and estimated capital needs, (b) an estimated terminal value using a terminal year long-term future growth rate determined based on the growth prospects of the reporting units; and (c) a discount rate that reflects the weighted-average cost of capital (“WACC”) adjusted for the relevant risk associated with each reporting unit's operation and the uncertainty inherent in the Group’s internally developed forecast. The following key assumptions were made in the discounted cash flow model to determine the fair value of each reporting unit in the impairment test in the fourth quarter of 2021: Reporting Units in PRC GEH Revenue growth 2%-14% 8%-12% WACC 18% 14% Income Tax Rate 25% 17% Terminal growth rate 2.3% 2% Forecasted inflation rate 2.3% 2% While management believes the assumptions used in our impairment test are reasonable, the fair value estimate is most sensitive to our discount rate and market multiple assumptions as these amounts are reflective of the market’s perception of our ability to achieve our projected cash flows. Based on the impairment analysis of December 31, 2021, the Group concluded that the goodwill of the reporting units of Shanghai Peidi of $4,559 was fully impaired, while no goodwill impairment was noted for the other four reporting units as their fair value exceeded the carrying amount of these reporting units. As such, $4,559 impairment loss of goodwill was recorded for the year ended December 31, 2021. Based on the impairment analysis as of December 31, 2020, the Group considered that the goodwill and intangible assets of the reporting units of Shanghai Geleli and Beijing Xingqiba (See Note 3) were fully impaired. As such, $8,454 impairment loss of goodwill and $1,720 impairment loss of intangible assets was recorded for the year ended December 31, 2020. The Group recorded $337, $8,454 and $4,559 impairment of goodwill for the years ended December 31, 2019, 2020 and 2021, respectively. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2021 | |
INTANGIBLE ASSETS, NET | |
INTANGIBLE ASSETS, NET | 11. INTANGIBLE ASSETS, NET Intangible assets, net, consisted of the following: As of December 31, 2020 2021 Intangible assets not subject to amortization: Trademark 7,766 7,766 Intangible assets subject to amortization: Trademark 1,551 2,298 Student base 7,939 8,213 Initial franchise 1,626 1,626 Brand 1,195 1,224 Non-compete agreement 674 690 Customer relationship 92 94 Software and courses 545 669 Contracts 31 31 Total costs 21,419 22,611 Less: accumulated amortization (5,334) (7,923) impairment (1,906) (1,951) Intangible assets, net 14,179 12,737 11. INTANGIBLE ASSETS, NET Amortization expenses for intangible assets for the years ended December 31, 2019, 2020 and 2021 were $2,224, $2,431 and $2,493, respectively. As of December 31, 2021, the estimated amortization expenses related to intangible assets for next five years is expected to be as follows: Years ending December 31, 2022 2,259 2023 1,213 2024 937 2025 112 2026 82 2027 and thereafter 368 Total expected amortization expense 4,971 The Group recorded impairment loss for the intangible assets of $79, $1,720 and $nil for the years ended December 31, 2019, 2020 and 2021, respectively. |
LONG-TERM INVESTMENTS
LONG-TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2021 | |
LONG-TERM INVESTMENTS | |
LONG-TERM INVESTMENTS | 12. LONG-TERM INVESTMENTS Equity method investments In April 2016, the Group invested cash consideration of $231 to set up a joint venture, Hainan RYB International Kindergarten Management Co., Ltd (“Hainan RYB”), with a third party, and obtained 51% equity interest in ownership. The Group holds three seats out of five of the board of directors of Hainan RYB. Subject to the articles of association of Hainan RYB, the adoption of any resolution of the board of directors shall require the affirmative vote of all directors of Hainan RYB. The Group used the equity method to account for the investment, because the Group had the ability to exercise significant influence but did not have control over the investee. In September 2016, the Group invested cash consideration of $301 to acquire 16% equity interest in Beijing Seven Children Education Technology Co., Ltd. (“Seven Children”). The Group holds one seat out of three of the board of directors of Seven Children. The Group used the equity method to account for the investment, because the Group had the ability to exercise significant influence but did not have control over the investee. In November 2018, the Group invested cash consideration of $4,400 for 19% equity interest in Beijing Da Ai Pre-school Management Education Technology Co., Ltd. (“Beijing Da Ai”). The Group holds one seat out of three of the board of directors of Beijing Da Ai. The Group accounts for the investment using equity method, because the Group has the ability to exercise significant influence but does not have control over the investee. In March 2020, the Company recorded an impairment loss of $1,819 for this investment based on the fair value. In August 2020, pursuant to the investment agreement dated in November 2018, the Group sold the investment in Beijing Da Ai to the principal shareholder at a consideration of the original consideration the Group paid. The Group recorded the receivables of $1,909 from the principal shareholder in the prepaid expenses and other current assets. As of December 31, 2020, full valuation allowance was recorded to the receivables as the Group believe the collectability is remote (see Note 7). On May 19, 2021, the Group entered into a cooperative agreement with Shanghai Minban Golden Apple (“Golden Apple”), a company established in the PRC, principally engaged in providing education service. Under the agreement, Golden Apple and the Group founded a joint venture to set up Shanghai Golden Apple International JES Island Kindergarten (“Golden Apple Kindergarten”). Golden Apple contributed classroom, office, playroom and parking lot and owned 51% equity interest in the joint venture, while the Group contributed teachers, courses, advertising and kids admittance and had 49% equity interest in the joint venture. Golden Apple is responsible for the operation of Golden Apple Kindergarten. The Group used the equity method to account for the investment, because the Group had the ability to exercise significant influence but did not have control over the joint venture. 12. LONG-TERM INVESTMENTS Equity method investments - continued The Group shared loss of $664, $185 and $15 from its equity method investments during the years ended December 31, 2019, 2020 and 2021, respectively. Available-for-sale securities On July 2, 2019, the Group entered into an investment agreement with the owners of Beijing Rui Le, a company established in the PRC, principally engaged in providing pre-school education training services. The Group purchased 16% equity ownership interest for cash consideration of $575. The investment was classified as available-for-sale security and measured at fair value as the Group determined that investment was debt security due to the redemption option available to the investor. In 2020, the Group determined that the investment was impaired and the impairment was other-than-temporary. The Group recorded $nil, $613 and $nil of impairment losses during the years ended December 31, 2019, 2020 and 2021. |
OTHER NON-CURRENT ASSETS
OTHER NON-CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
OTHER NON-CURRENT ASSETS | |
OTHER NON-CURRENT ASSETS | 13. OTHER NON-CURRENT ASSETS Other non-current assets consisted of the following: As of December 31, 2020 2021 Rental deposits (1) 5,964 5,428 Prepayment for investments (2) 6,017 2,197 Prepayment for property, plant and equipment 1,943 927 Others 514 116 14,438 8,668 (1) Rental deposits represent office and kindergartens rental deposits for the Group’s operations, which will not be refunded within one year. (2) On June 21, 2019, the Group entered into an agreement to additionally acquire 10% equity interest, from the non-controlling interest holder, of Shandong Buladun. As of December 31, 2019, the group paid consideration for this acquisition of $1,362 in cash. The transaction has not yet been completed as of December 31, 2021. On September 6, 2019, the Group entered into agreement to acquire 10% equity interest, from the non-controlling interest holder of Digital Knowledge World Co., Ltd. As of December 31, 2019, the group has paid consideration for this acquisition of $4,636 in cash. The transaction has been completed in November 2021. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 14. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES The components of accrued expenses and other current liabilities are as follows: As of December 31, 2020 2021 Salary and welfare payable 29,862 31,539 Accrued expenses 9,534 9,511 Payables for purchase of property, plant and equipment 2,416 1,372 Payables for purchase of educational merchandise 4,351 4,841 Other tax payable 294 684 Acquisition consideration payable 613 628 Others 7,336 7,067 54,406 55,642 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2021 | |
LEASES | |
LEASES | 15. LEASES Operating leases The Group’s leases consist of various operating lease contracts for offices, kindergartens, play-and-learn centers and student care centers in different cities in the PRC and in Singapore. The Group determines if an arrangement is a lease at inception. The Group’s leases have remaining lease terms of up to seventeen years, none of them include options to extend or terminate the leases. Some lease agreements contain lease and non-lease components, which the Group chooses to account for as separate components. The allocation of the consideration between the lease and the non-lease components is based on the relative stand-alone prices included in the lease contracts. None of the amounts disclosed below for these leases contains variable payments, residual value guarantees or options that were recognized as part of the right-of-use assets and lease liabilities. As of December 31, 2020 and 2021, the Group had no leases that were classified as a financing lease. As of December 31, 2020 and 2021, the Group did not have additional operating leases that have not yet commenced but create significant rights and obligations for the Group. Total operating lease expenses for the years ended December 31, 2020 and 2021 was $15,634 and $ 16,799 The short term lease expenses for the years ended December 31, 2020 and 2021 was $1,219 and $1,234, respectively, which was recorded in cost of revenues, and general and administrative expenses on the consolidated statements of operations. The Group recorded impairment loss for operating lease right-of-use assets of $54 and $nil For the year ended December 31, 2021: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases 17,896 Right-of-use assets obtained in exchange for new lease obligations: 4,964 As of December 31, 2021: Weighted average remaining lease term 7.82 year Weighted average discount rate 7.66 % 15. LEASES Operating leases The following is a maturity analysis of the annual undiscounted cash flows for the annual periods ended December 31: Years ending December 31, 2022 16,901 2023 17,822 2024 12,869 2025 11,140 2026 8,853 2027 and thereafter 37,811 Less: imputed interest 25,817 Total operating lease liabilities 79,579 Less: current operating lease liabilities 13,890 Non-current operating lease liabilities 65,689 |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2021 | |
FAIR VALUE MEASUREMENT | |
FAIR VALUE MEASUREMENT | 16. FAIR VALUE MEASUREMENT Measured or disclosed at fair value on a recurring basis The Group’s financial assets and liabilities primarily include cash and cash equivalents, term deposits, available-for-sale securities, restricted cash, accounts receivable, loan receivables, amounts due from related parties, other receivables, long-term debt, amount due to related parties and other payables. The carrying amounts of cash and cash equivalents, term deposits, restricted cash, accounts receivables, loan receivables, amounts due from related parties, other receivables, amount due to related parties and other payables approximate their fair values. The carrying amount of long-term debt approximates fair value as its interest rates are at the same level of current market yield for comparable loans. The Group measured available-for-sale securities based on a valuation which utilizes income approach to determine the equity value and the options-pricing method to determine the allocated values between preferred shares and common shares. The available-for-sale securities are classified within Level 3 of the fair value hierarchy because the Group used unobservable inputs to value the investments. The significant unobservable inputs include the forecast financial performance of the investee business and discount rate to determine the fair value of the business. 16. FAIR VALUE MEASUREMENT - continued Measured or disclosed at fair value on a non-recurring basis - continued The Group’s goodwill and intangible assets are primarily acquired through business acquisitions. Purchase price allocation are measured at fair value on a nonrecurring basis as of the acquisition dates. The Group measures its goodwill and intangible assets at fair value on a nonrecurring basis annually or whenever events or changes in circumstances indicate that carrying amount of a reporting unit exceeds its fair value. Intangible assets are measured using the income approach - discounted cash flow method when events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. For goodwill impairment testing, refer to Note 10 for details. The Group recognized impairment loss of $337, $8,454 and $4,559 related to goodwill and $79, $1,720 and $nil related to intangible assets acquired for the years ended December 31, 2019, 2020 and 2021. The Group measures property, plant and equipment and operating lease right-of-use assets at fair value on a non-recurring basis when events or changes in circumstances indicate that the carrying amount of these assets or asset group may not be recoverable. The fair value is determined using models with significant unobservable inputs (Level 3 inputs), primarily the management projection of discounted future cash flow and the discount rate. The Group recorded impairment loss on property, plant, and equipment and operating lease right-of-use assets of $nil, $428 and $nil during the years ended December 31, 2019, 2020 and 2021. The Group measures long-term equity method investment at fair value on a non-recurring basis whenever events or changes in circumstances indicate that the carrying value may no longer be recoverable. The fair value is determined using models with significant unobservable inputs (Level 3 inputs), primarily the management projection of discounted future cash flow and the discount rate. The Group recognized impairment loss of $nil, $1,819 and $nil related to the long-term equity method investment for the years ended December 31, 2019, 2020 and 2021. The Group recognized impairment loss of $nil, $613 and $nil related to the available-for-sale investment for the years ended December 31, 2019, 2020 and 2021. |
ORDINARY SHARES
ORDINARY SHARES | 12 Months Ended |
Dec. 31, 2021 | |
ORDINARY SHARES | |
ORDINARY SHARES | 17. ORDINARY SHARES The Company’s fifth amended and restated Memorandum and Article of Association authorized the Company to issue 990,000,000 ordinary shares with a par value of $0.001 per share. On November 5, 2015, the Company re-designated 10,115,854 ordinary shares as Class A ordinary shares. On November 5, 2015, the Company issued 13,047,947 Class B ordinary shares to RYB Education Limited (a company established by Ms. Yanlai Shi, the director and Chief Executive Officer of the Company), with total proceeds of $50,224. RYB Education Limited shall be entitled to receive special dividend and any dividend declared in relation to the future investor financing transaction, which shall not be declared in favor of or distributed to any Class A ordinary shareholders. Pursuant to the 5 th 17. ORDINARY SHARES - continued Upon the completion of the Company’s IPO in September, 2017, (i) 3,253,870 of Class A ordinary shares were re-designated as Class B ordinary shares on a one-for-one basis, (ii) 9,352,676 of Class B ordinary shares were re-designated Class A ordinary shares on a one-for-one basis, (iii) the golden share was redeemed by the Company, and (iv) the Company offered and issued 5,500,000 Class A ordinary shares with a par value $0.001 per share at the total proceeds of $94,627 through IPO. IPO related expense is $4,492, out of which $3,073 was paid in 2017 and the remaining was paid in 2018. As of December 31, 2021, there were 22,264,660 and 6,949,141 shares issued for Class A and Class B ordinary shares, respectively; and there were 21,086,793 and 6,949,141 shares outstanding for Class A and Class B ordinary shares, respectively. Share repurchase program On November 24, 2017, the Company announced that the board of directors of the Company has approved a share repurchase program whereby the Company is authorized to repurchase its own ordinary shares in the form of American depositary shares with an aggregate value of up to $50,000 during the next 12 months. As of December 31, 2021, the Company did not repurchase any shares under this program. On December 18, 2018, the Company announced that the board of directors of the Company approved another share repurchase program whereby the Company is authorized to repurchase its own ordinary shares in the form of American depositary shares with an aggregate value of up to $12,000 during the next 12 months. Pursuant to this share repurchase plan, the Company repurchased 1,627,455 shares in 2019, with a total consideration of approximately $12,000 at a price range of $6.50 to $8.00 per share, including brokerage commissions. The shares repurchased by the Company were accounted for at cost as treasury stock. The Company has re-issued 226,408 and 449,588 repurchased shares for settlement of restricted shares vested as of December 31, 2020 and 2021, respectively. |
SHARE INCENTIVE PLAN
SHARE INCENTIVE PLAN | 12 Months Ended |
Dec. 31, 2021 | |
SHARE INCENTIVE PLAN | |
SHARE INCENTIVE PLAN | 18. SHARE INCENTIVE PLAN The Company adopted the 2009 and 2017 Share Incentive Plans for the grant of share options to employees, directors and non-employees to provide incentive for their services. The maximum number of ordinary shares that may be delivered pursuant to compensatory awards granted to the employees, directors and non-employees under the 2009 Share Incentive Plan should not exceed 2,573,756 ordinary shares of par value $0.001 per share. The maximum aggregate number of ordinary shares that may be issued pursuant to all awards is initially 2,059,005, plus an annual increase on the first day of each of the Company’s fiscal years the term of the 2017 Share Incentive Plan, commencing with the fiscal year beginning January 1, 2018, by an amount equal to 2.0% of the total number of ordinary shares issued and outstanding on the last day of the immediately preceding fiscal year. On June 22, 2017, the Company granted a total of 1,286,878 share options to directors at an exercise price of $11.66 per option. The options will vest in accordance with the vesting schedules set out in the respective share option agreements. If the Company completes a qualified IPO before June 22, 2018, the vesting and expiration terms are: (i) 25% of the share options will be vested and exercisable on June 22, 2018, and will expire on June 21, 2027; (ii) 75% of the share options will be vested quarterly in twelve quarters with equal quarterly installments after June 22, 2018, and will expire on June 21, 2027. 18. SHARE INCENTIVE PLAN - continued If the Company does not complete a qualified IPO before June 22, 2018, the vesting and expiration terms are: (i) 25% of the share options will be vested and exercisable on the date of 1 st trading date of the IPO, and will expire on June 21, 2027; (ii) 75% of the share options will be vested quarterly in twelve quarters with equal quarterly installments after the 1 st trading date of the IPO, and will expire on June 21, 2027. As the Company completed the qualified IPO on September 27, 2017, the first vesting schedule applied. On June 22, 2017, the Company granted a total of 772,127 share options to employees at an exercise price of $11.66 per option. The options will vest in accordance with the vesting schedules set out in the respective share option agreements. The vesting and expiration terms are: (i) 25% of the share options will be vested and exercisable on June 22, 2018, and will expire on June 21, 2027; (ii) 75% of the share options will be vested quarterly in twelve quarters with equal quarterly installments after June 22, 2018, and will expire on June 21, 2027. On July 1, 2017, the Company granted a total of 50,300 share options to a director and a consultant at weighted average exercise price of $1.48 per option. The options were fully vested on the grant date and will expire on June 30, 2027. On April 2, 2018, the Company granted 20,000 share options to an employee at an exercise price of $0.01 per option. The options will vest in accordance with the vesting schedules set out in the respective share option agreements. The vesting and expiration terms are: (i) 25% of the share options will be vested and exercisable on April 1, 2019, and will expire on April 1, 2028; (ii) 75% of the share options will be vested quarterly in twelve quarters with equal quarterly installments after April 1, 2019, and will expire on April 1, 2028. 18. SHARE INCENTIVE PLAN - In 2020, the Company granted 554,000 share options to employees at an exercise price of $0.001 per option. 25% of the share options will be vested and exercisable upon 1st anniversary year following the grant date, and the remaining 75% of the share options will be vested quarterly in twelve quarters with equal quarterly installments from the vesting date of the first installment, and the contract term is 10 years from grant date. A summary of the share option activities is as follows: Number Weighted Weighted average Weighted average Aggregate of options average grant-date remaining contractual intrinsic outstanding exercise price fair value per option term (years) value Options outstanding at January 1, 2021 4,556,458 6.16 3.43 5.36 2,175 Granted — — — — — Forfeited (26,300) 7.20 4.04 — — Options outstanding at December 31, 2021 4,530,158 6.15 3.43 4.29 2,846 Options expected to vest at December 31, 2021 4,530,158 6.15 3.43 4.29 2,846 Vested and exercisable at December 31, 2021 4,114,658 6.77 3.51 3.83 1,730 The weighted average grant date fair value of options granted during the years ended December 31, 2019, 2020 and 2021 were $ nil, $2.69 and $nil, respectively. The total fair value of options vested during the year ended December 31, 2019, 2020 and 2021 were $3,320, $2,990 and $1,910, respectively. The total intrinsic value of options exercised during the year ended December 31, 2019, 2020 and 2021 were $nil, $nil and $nil, respectively. For share options that vest on grant date, the cost of award is expensed on the grant date. For the graded vesting share options, the Company recognizes the compensation cost over the requisite service period for each separately vesting portion of the award as if the award is, in substance, multiple awards. The Company recorded share-based compensation expenses relating to share options of $2,069, $1,198 and $924 for the years ended December 31, 2019, 2020 and 2021, respectively. As of December 31, 2021, total unrecognized compensation expenses relating to share options were $544, which is expected to be recognized over a weighted average period of 1.77 years. The fair value of the options granted is estimated on the dates of grant using the binomial option pricing model with the following assumptions used. As of December 31, Grant date 2020 Risk-free interest rate 0.86%-0.93 % Expected volatility 40 % Expected dividend yield — Exercise multiples 2.2 Fair value of underlying ordinary share 2.38~2.7 (1) Risk-free interest rate Risk-free interest rate was estimated based on the treasury long term rate of U.S. Treasury Department with a maturity period close to the expected term of the options. (2) Expected volatility Expected volatility of the underlying ordinary shares during the lives of the options was estimated based on the historical stock price volatility of comparable listed companies over a period comparable to the expected term of the options. 18. SHARE INCENTIVE PLAN - (3) Expected dividend yield Expected dividend yield was estimated by the Company based on its expected dividend policy over the expected term of the options. (4) Exercise multiples Exercise multiple represents the value of the underlying share as a multiple of exercise price of the option which, if achieved, results in exercise of the option. (5) Fair value of underlying ordinary shares The estimated fair value of the ordinary shares underlying the options as of the respective grant dates was determined based on the Company’s share price. Nonvested shares On March 14, 2018, the Company granted 200,000 nonvested shares to three directors and executive officers. 25% of the nonvested shares will be vested on March 14, 2019. 75% of the nonvested will be vested quarterly in twelve quarters with equal quarterly installments after March 14, 2019. The grant date fair value of the nonvested shares was $20.43 per share, which was the closing price of the Company’s ordinary share on New York Stock Exchange (“NYSE”) on March 14, 2018. This grant resulted in a total share-based compensation of $4,086, to be recognized ratably over the requisite service period of 4 years. On October 24, 2018, the Company granted 18,000 nonvested shares to a non-employee. 25% of the nonvested will be vested on October 23, 2019. 75% of the nonvested will be vested quarterly in twelve quarters with equal quarterly installments after October 23, 2019. The grant date fair value of the nonvested shares was $17.11 per share, which was the closing price of the Company’s ordinary share on NYSE on October 24, 2018. This grant resulted in a total share-based compensation of $308, to be recognized ratably over the requisite service period of 4 years. On July 29, 2019, the Company granted 8,388 nonvested shares to an employee. 25% of the nonvested will be vested on July 29, 2020. 75% of the nonvested will be vested quarterly in twelve quarters with equal quarterly installments after July 29, 2020. The grant date fair value of the nonvested shares was $6.06 per share, which was the closing price of the Company’s ordinary share on NYSE on July 29, 2019. This grant resulted in a total share-based compensation of $51, to be recognized ratably over the requisite service period of 4 years. On August 20, 2019, the Company granted 240,000 nonvested shares to two directors and executive officers. 25% of the nonvested will be vested on August 20, 2020. 75% of the nonvested will be vested quarterly in twelve quarters with equal quarterly installments after August 20, 2020. The grant date fair value of the nonvested shares was $6.69 per share, which was the closing price of the Company’s ordinary share on NYSE on August 20, 2019. This grant resulted in a total share-based compensation of $1,606, to be recognized ratably over the requisite service period of 4 years. On December 4, 2019, the Company granted 9,146 nonvested shares to an employee. 25% of the nonvested will be vested on December 4, 2020. 75% of the nonvested will be vested quarterly in twelve quarters with equal quarterly installments after December 4, 2020. The grant date fair value of the nonvested shares was $5.55 per share, which was the closing price of the Company’s ordinary share on NYSE on December 4, 2019. This grant resulted in a total share-based compensation of $51, to be recognized ratably over the requisite service period of 4 years. 18. SHARE INCENTIVE PLAN - Nonvested shares On August 27, 2020, the Company granted 333,750 nonvested shares to three directors and executive officers. 25% of the nonvested will be vested on August 27, 2021. 75% of the nonvested will be vested quarterly in twelve quarters with equal quarterly installments after August 27, 2020. The grant date fair value of the nonvested shares was $3.03 per share, which was the closing price of the Company’s ordinary share on NYSE on August 27, 2020. This grant resulted in a total share-based compensation of $1,011, to be recognized ratably over the requisite service period of 4 years. A summary of the nonvested shares activities is as follows: Number Weighted of nonvested shares average grant date Aggregate outstanding fair value intrinsic value Nonvested shares outstanding at January 1, 2021 582,876 6.21 1,381 Granted — — — Vested (223,180) 8.25 — Nonvested shares outstanding at December 31, 2021 359,696 4.94 712 The weighted average grant date fair value of nonvested shares granted during the years ended December 31, 2019, 2020 and 2021 were $6.63, $3.03 and $nil, respectively. The total fair value of nonvested shares vested during the years ended December 31, 2019, 2020 and 2021 were $669, $403, and $656 respectively. The Group recognized compensation expense over the requisite service period for each separately vesting portion of the award as if the award is in substance, multiple awards. The Company recorded share-based compensation expenses relating to nonvested shares of $1,893, $1,732 and $1,097 for the years ended December 31, 2019, 2020 and 2021, respectively. As of December 31, 2021, total unrecognized compensation expenses relating to nonvested shares were $513, which is expected to be recognized over a weighted average period of 1.45 years. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
INCOME TAXES | 19. INCOME TAXES Cayman Islands The Company is a tax-exempt entity incorporated in Cayman Islands. Hong Kong The Company’s subsidiaries located in Hong Kong and are subject to a profits tax rate of 8.25% on assessable profits on the first Hong Kong Dollars (“HK$”) 2 million and 16.5% for any assessable profits in excess of HK$2 million starting from the financial commencing on April 1, 2018. 19. INCOME TAXES - continued Singapore The Company’s subsidiaries located in Singapore are generally subject to Singapore corporate income tax at a rate of 17% in 2021. Under the group relief system, subject to meeting the requisite conditions, the companies may deduct unutilized capital allowances, trade losses, and donations for the current year against the assessable income of another company in the same group. The Company’s subsidiaries located in Singapore should also benefit from the partial tax exemption scheme, which provides 75% exemption from tax for the first SGD$10 thousand chargeable income and 50% exemption from tax for the next SGD$190 thousand chargeable income for the year ended December 31, 2021. China The Company’s subsidiaries, the VIEs and the VIEs’ subsidiaries and kindergartens, which were entities established in the PRC (the “PRC entities”) are subject to PRC Enterprise Income Tax (EIT), on the taxable income in accordance with the relevant PRC income tax laws, which have adopted a unified income tax rate of 25% since January 1, 2008. The current and deferred components of the income tax expense appearing in the consolidated statements of operations are as follows: Years ended December 31, 2019 2020 2021 Current tax expense 6,010 3,438 4,726 Deferred tax benefit (2,469) (3,223) (1,286) 3,541 215 3,440 The principal components of deferred tax assets and deferred tax liabilities are as follows: Years ended December 31, 2020 2021 Deferred tax assets Accrued expenses 3,407 4,803 Net operating loss carry-forwards 24,223 22,788 Operating lease liabilities 22,397 19,209 Inventory write-down 50 42 Allowance for doubtful accounts receivables and other receivables 758 1,003 Allowance for loan receivables 366 360 Impairment of long-term investments 153 157 Impairment of long-lived assets other than intangible assets 113 61 Total deferred tax assets 51,467 48,423 Less: valuation allowance (9,646) (8,428) Total deferred tax assets, net 41,821 39,995 Deferred tax liabilities Acquired intangible assets, net 2,499 2,092 Operating lease right-of-use assets 20,044 16,848 Total deferred tax liabilities 22,543 18,940 Deferred income tax assets, net 21,168 22,803 Deferred tax liabilities, net 1,890 1,768 19. INCOME TAXES - continued The roll forward of valuation allowances of deferred tax assets were as follows: Years ended December 31 2020 2021 Balance as of beginning of year (2,859) (9,646) Additions of valuation allowance (6,234) 1,534 Foreign currency translation adjustments (553) (316) Balance as of end of year (9,646) (8,428) As of December 31, 2021, the Group had net operating loss carried forward from the PRC entities of $90,123. The carry forward loss of $9,829, $15,654, $11,650, $37,883 and $15,107 will expire by 2022, 2023, 2024, 2025 and 2026, respectively, if not utilized. The reconciliation of the effective tax rate and the statutory income tax rate applicable to PRC operations is as follows: Years ended December 31, 2019 2020 2021 Income (loss) before income taxes 2,015 (40,783) 6,984 Income tax expense computed at an applicable tax rate of 25% 504 (10,196) 1,746 Permanent differences 108 2,975 2,169 Effect of income tax rate difference in other jurisdictions 2,092 1,202 1,059 Change in valuation allowance 837 6,234 (1,534) 3,541 215 3,440 In addition, uncertainties exist with respect to how the current income tax law in the PRC applies to the Group’s overall operations, and more specifically, with regard to tax residency status. The New EIT Law includes a provision specifying that legal entities organized outside of the PRC will be considered residents for Chinese Income tax purposes if the place of effective management or control is within the PRC. The implementation rules to the New EIT Law provide that non-resident legal entities will be considered PRC residents if substantial and overall management and control over the manufacturing and business operations, personnel, accounting and properties, occurs within the PRC. Despite the present uncertainties resulting from the limited PRC tax guidance on the issue, the Group does not believe that the legal entities organized outside of the PRC within the Group should be treated as residents for EIT law purposes. If the PRC tax authorities subsequently determine that the Company should be deemed resident enterprises, the Company will be subject to the PRC income taxes, at a rate of 25%. If any entity within the Group that is outside the PRC were to be a non-resident for PRC tax purposes dividends paid to it out of profits earned by PRC subsidiaries after January 1, 2008 would be subject to a withholding tax at a rate of 10%, subject to reduction by an applicable tax treaty with the PRC. As of December 31, 2021, the Company’s subsidiaries, the VIEs, and VIEs’ subsidiaries and kindergartens located in the PRC recorded aggregate accumulated deficits. Accordingly, no deferred tax liabilities has been accrued for the Chinese dividend withholding taxes. The Group did not identify significant unrecognized tax benefits for the years ended December 31, 2019, 2020 and 2021. The Group did not incur any interest and penalties related to potential underpaid income tax expenses and also does not anticipate any significant increases or decreases in unrecognized tax benefits in the next 12 months from December 31, 2021. |
EMPLOYEE DEFINED CONTRIBUTION P
EMPLOYEE DEFINED CONTRIBUTION PLAN | 12 Months Ended |
Dec. 31, 2021 | |
EMPLOYEE DEFINED CONTRIBUTION PLAN | |
EMPLOYEE DEFINED CONTRIBUTION PLAN | 20. EMPLOYEE DEFINED CONTRIBUTION PLAN Full time employees of the Group in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund, unemployment insurance and other welfare benefits are provided to employees. Chinese labor regulations require that the Group’s PRC entities make contributions to the government for these benefits based on certain percentages of the employees’ salaries. The Group has no legal obligation for the benefits beyond the contributions made. The total amounts for such employee benefits, which were expensed as incurred, were $13,041, $9,136 and $11,698 for the years ended December 31, 2019, 2020 and 2021, respectively. As a result of COVID-19, the PRC government exempted or reduced certain enterprises’ contributions to basic pension insurance, unemployment insurance, and work injury insurance (“certain social insurance”). The Company’s PRC subsidiaries and VIEs were exempted from contributions to certain social insurance between February 2020 and December 2020. The exemption was recognized as a reduction of cost of revenues and operating expenses in the amount of $3,491 for the year ended December 31, 2020. |
NET INCOME LOSS PER SHARE
NET INCOME LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2021 | |
NET INCOME/LOSS PER SHARE | |
NET INCOME/LOSS PER SHARE | 21. NET INCOME/LOSS PER SHARE Basic and diluted net (loss) income per share for each of the periods presented were calculated as follows. Shares issuable for little consideration have been included in the number of outstanding shares used for basic and diluted loss per ordinary share. Years ended December 31, 2019 2020 2021 Numerator: Net (loss) income attributable to ordinary shareholders of RYB Education, Inc. for computing basic and diluted net (loss) income per ordinary share (2,434) (37,280) 6,790 Denominator: Weighted average ordinary shares outstanding used in computing basic net (loss) income per ordinary share 28,074,624 28,122,851 28,208,734 Effects of dilutive securities Options — — 700,715 Nonvested shares — — 53,031 Weighted average ordinary shares outstanding used in computing diluted net income per ordinary share 28,074,624 28,122,851 28,962,480 Net (loss) income per ordinary share-basic (0.09) (1.33) 0.24 Net (loss) income per ordinary share-diluted (0.09) (1.33) 0.23 For the years ended December 31, 2019, 2020 and 2021, the following shares outstanding were excluded from the calculation of diluted net (loss) income per ordinary share, as their inclusion would have been anti-dilutive for the periods presented. Years ended December 31, 2019 2020 2021 Share options 4,008,558 4,556,458 3,315,748 Nonvested shares 383,534 582,876 17,000 4,392,092 5,139,334 3,332,748 |
RELATED PARTY TRANSACTION
RELATED PARTY TRANSACTION | 12 Months Ended |
Dec. 31, 2021 | |
RELATED PARTY TRANSACTION | |
RELATED PARTY TRANSACTION | 22. RELATED PARTY TRANSACTION (1) Related parties Name of related parties Relationship with the Group Ms. Zhiying Li Spouse of Mr. Chimin Cao, who is Chairman of the Board of Directors of the Company (2) The related party transactions are as follows: Years ended December 31, 2019 2020 2021 Rental expense recorded: Ms. Zhiying Li (i) 492 586 627 492 586 627 (i) The transactions with the related party shown above represent the office rental expenses recorded in each year. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 23. COMMITMENTS AND CONTINGENCIES Purchase commitments Future minimum purchase obligations payments under non-cancelable purchase agreements related to curriculum collaboration with international institutions consisted of the following at December 31, 2021: Years ending December 31, 2022 475 2023 340 2024 342 2025 122 2026 142 2027 and thereafter 2,562 3,983 Contingencies In order to operate kindergartens, the Group is required to obtain and maintain various approvals, licenses, and permits and to fulfill registration and filing requirements pursuant to applicable laws and regulations. For instance, to establish a kindergarten, a private school operation permit from the local education bureau and registration certificate for private non-enterprise entities with the local civil affairs bureau will be required, and the Group is required to periodically renew the private school operation permit and pass annual inspections conducted by the relevant government authorities. Given the significant amount of discretion the local PRC authorities may have in interpreting, implementing and enforcing relevant rules and regulations, as well as other factors beyond control of the Group, while the Group intends to obtain all requisite permits and complete necessary filings and registrations on a timely basis for the Group’s operations, the Group cannot assure to obtain all required permits in time. 23. COMMITMENTS AND CONTINGENCIES - continued Contingencies - continued If the Group fails to receive required permits or certificates in a timely manner, or at all, the Group may be subject to fines, confiscation of the gains derived from the non-compliant operations, suspension of the non-compliant teaching facilities or liability to indemnify economic loss suffered by the Group’s students, which may materially and adversely affect the Group’s business, financial conditions and results of operations. Currently, the Group has not received private school operation permits or registration certificates for private non-enterprise entities for certain directly operated kindergartens, and the Group is in the process of obtaining the permits or certificates for these kindergartens. During the years ended December 31, 2019, 2020, 2021, net revenues generated from these kindergartens were $9,559, $6,110, and $ 6,321 On November 7, 2016, the Standing Committee of the National People’s Congress promulgated the Decision on Amending the Law on the Promotion of Private Education of the PRC (the “Amended Private Education Law”), which became effective on September 1, 2017. On December 29, 2018, the Decision of the Standing Committee of the National Peoples Congress on Amending the Seven Laws of the Labor Law of the PRC was promulgated by Order No. 24 of the President of the PRC and took into effect on the same date, which made two minor adjusts to Article 26 and Article 64 of the Amended Private Education Promotion Law. On November 7, 2018, the Central Committee of the Communist Party of China and the State Council promulgated the Opinions of the CPC Central Committee and State Council on Deepening Reform in Preschool Education. On March 5, 2004, the PRC State Council promulgated the Implementation Rules for the Law for Promoting Private Education, or the PE Implementation Rules, which became effective on April 1, 2004. PE Implementation Rules was amended on April 7,2021, and took effective on September 1, 2021. Due to lack of authoritative interpretation and implementation guidance, the potential impact related to the Group not fully complying with the Amended Private Education Law or any relevant regulations cannot be reasonably estimated at the issuance of this report. The Company, three of its directors and officers, and certain underwriters for the Company’s initial public offering were named as defendants in a putative class action filed in the Superior Court of the State of California for the County of San Mateo. The complaint alleges that the Company’s registration statements contained misstatements or omissions regarding its business, operations and prospects in violation of the U.S. securities laws. On November 2, 2020, the class action was voluntarily dismissed without prejudice. The Company and certain of its directors and officers were named as defendants in a putative class action filed, on November 21, 2018, in the Supreme Court of the State of New York County of Queens. The complaint alleges that the Company’s registration statements contained misstatements or omissions regarding the Company’s business and operations in violation of the U.S. securities laws. The complaint states that the plaintiffs seek to represent a class of persons who allegedly suffered damages as a result of their purchase of the Company’s securities issued pursuant to and traceable to the Company’s initial public offering on or about September 27, 2017, and alleges violations of the U.S. securities laws. On October 19, 2020, the class action was voluntarily discontinued. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2021 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 24. SEGMENT INFORMATION The Group’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer of the Company, who reviews financial information of operating segments when making decisions about allocating resources and assessing performance of the Group. An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur costs, and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Group’s CODM. The Group has four operating segments, including PRC kindergartens, PRC play-and-learn centers, Singapore kindergartens, student care centers and others, and others. The Group’s CODM evaluates performance based on each reporting segment’s revenue, costs of revenues and gross profit (loss). Revenues, cost of revenues and gross profits (loss) by segment are presented below. Separate financial information of operating income by segment is not available. Years ended December 31, 2019 2020 2021 Net revenues: PRC kindergartens 131,427 68,319 128,402 PRC play-and-learn centers 24,901 12,215 13,254 Singapore kindergartens, student care centers and others 19,073 25,964 31,007 Others 6,882 3,217 7,650 Total net revenues 182,283 109,715 180,313 Cost of revenues: PRC kindergartens 113,315 78,901 106,566 PRC play-and-learn centers 14,269 8,610 8,634 Singapore kindergartens, student care centers and others 16,200 21,513 25,362 Others 11,750 7,877 8,580 Total cost of revenues 155,534 116,901 149,142 Gross profit (loss) PRC kindergartens 18,112 (10,582) 21,836 PRC play-and-learn centers 10,632 3,605 4,620 Singapore kindergartens, student care centers and others 2,873 4,451 5,645 Others (4,868) (4,660) (930) Total gross profit (loss) 26,749 (7,186) 31,171 The Group’s CODM does not review the financial position by operating segments, thus total assets by operating segment are not presented. 24. SEGMENT INFORMATION - continued Geographical information The Company’s operations are located in the PRC and Singapore. The Company’s revenues and long lived assets by geographic areas (based on location of customers) are detailed below: Years ended December 31, 2019 2020 2021 Net Revenues: PRC 163,210 83,751 149,306 Singapore 19,073 25,964 31,007 182,283 109,715 180,313 As of December 31, 2020 2021 Long-lived assets: PRC 128,206 102,769 Singapore 15,600 13,992 143,806 116,761 |
RESTRICTED NET ASSETS
RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
RESTRICTED NET ASSETS | |
RESTRICTED NET ASSETS | 25. RESTRICTED NET ASSETS Relevant PRC statutory laws and regulations permit payments of dividends by the Group’s PRC entities only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s entities. Prior to payment of dividends, pursuant to the PRC laws and regulations, enterprises incorporated in the PRC must make appropriations from after-tax profit to non-distributable reserve funds as determined by the Board of Directors of each company. These reserves include (i) general reserve, and (ii) other reserves at the discretion of the Board of Director. Subject to certain cumulative limits, the general reserve requires annual appropriations of 10% of after-tax profits as determined under PRC laws and regulations at each year-end until the balance reaches 50% of the PRC entity registered capital; the other reserve appropriations are at the Company’s discretion. These reserves can only be used for specific purposes of enterprise expansion and are not distributable as cash dividends. The Company’s subsidiaries, the VIEs, and VIEs’ subsidiaries, contributed $ nil and $ nil the general reserve during the years ended December 31, 2020 and 2021, respectively. PRC laws and regulations require kindergartens that require reasonable returns to contribute 25% of after-tax income before payments of dividend to a fund to be used for the construction or maintenance of the kindergarten or procurement or upgrading of educational facility. For kindergartens that do not require reasonable returns, this amount should be equivalent to no less than 25% of the annual increase of its net assets as determined in accordance with generally accepted accounting principles in the PRC. For the Group’s kindergartens, amounts contributed to the reserve of $ 592 and $ 512 the years ended December 31, 2020 and 2021, respectively. These reserves are included as statutory reserves in the consolidated statements of changes in equity. The statutory reserves cannot be transferred to the Company in the form of loans or advances and are not distributabl e as cash dividends except in the event of liquidation. Because the Group’s PRC entities can only be paid out of distributable profits reported in accordance with PRC accounting standards, the Group’s PRC entities are restricted from transferring their net assets to the Company. The restricted amounts include the paid-in capital and statutory reserves of the Group’s PRC entities. The Group’s restricted net assets was $ 13,356 |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2021 | |
SUBSEQUENT EVENT | |
SUBSEQUENT EVENTS | 26. SUBSEQUENT EVENT To better adapt to the evolving trends of the education sector in China, management of the Group has been considering the plan to sell the directly operated kindergarten business in China as a group and has initiated the action to locate buyers since January 2022. On March 1, 2022, the subsidiaries of the Company, RYB Technology and TJ Qiyuan have entered into termination agreements with certain variable interest entities, Beijing RYB and Beiyao. By entering into those termination agreements, the Company will no longer be the primary beneficiary of its directly operated kindergarten business in China beginning on April 30, 2022, when the Divestiture will become effective (“the date of the Divestiture”). The Divestiture aims to fully address compliance requirements with regard to relevant laws and regulations (including the Opinions of the State Council on Deepening Reform and Standardized Development of Preschool Education as well as the Regulations on the Implementation of the Law on the Promotion of Private Education). This Divestiture includes the termination of agreements by and among RYB Technology, TJ Qiyuan, Beijing RYB, Beiyao and their shareholders. As a result, 90 directly operated kindergartens in China will be divested. As the consideration for the termination of VIE agreements, an aggregate amount of RMB158.5 million will be paid in installments to RYB Technology and TJ Qiyuan. At the same time, to ensure ongoing stability and sustained provision of quality kindergarten education, the subsidiaries of the Company have entered into a series of service agreements to provide brand royalty, training, management IT system, recruitment, and curriculum design services to the previous VIEs and/or their subsidiaries. As part of the Divestiture, RYB Technology has entered into a loan agreement with Beijing RYB and Beiyao to reflect the net balance of historical inter-company lending and borrowing as of the date of the Divestiture, the exact amount of which is subject to the further audit procedure completion. The following tables summarize the unaudited pro forma statements of financial position and pro forma unaudited statements of operations of all the entities as a group (“Divesture part”) that would be deconsolidated through the Divestiture, as well as those of all entities that remain in the Group (“Non Divestiture part”) as of and for the year ended December 31, 2021, as if the Divestiture had become effective on January 1, 2021. Service fees which would be collected by the Non Divestiture part from the Divestiture part starting from April 30, 2022, and the income tax impact of the Divestiture are not reflected in the unaudited pro forma financial statements. The Divestiture journal entry reflects the balance of receivable and gain from the Divestiture by the Non Divestiture part. 26. SUBSEQUENT EVENT UNAUDITED PRO FORMA STATEMENTS OF FINANCIAL POSITION As of December 31, 2021 Pro Forma Non Consolidated Divestiture Adjustment Divestiture ASSETS Current assets Cash and cash equivalents 65,263 31,892 — 33,371 Term deposits 215 215 — — Accounts receivable 1,300 27 — 1,273 Inventories 6,130 — — 6,130 Prepaid expenses and other current assets 9,344 6,409 — 2,935 Total current assets 82,252 38,543 — 43,709 Non-current assets Restricted cash 993 993 — — Property, plant and equipment, net 39,379 32,967 — 6,412 Goodwill 42,102 22,925 — 19,177 Intangible assets, net 12,737 1,638 — 11,099 Long-term investments 169 — — 169 Deferred tax assets 22,803 13,969 — 8,834 Other non-current assets 8,668 3,194 — 5,474 Operating lease right-of-use assets 73,973 49,581 — 24,392 Amounts due from related parties (for Divestiture) — — 22,576 22,576 Amounts due from related parties — — 44,664 44,664 TOTAL ASSETS 283,076 163,810 67,240 186,506 LIABILITIES Current liabilities Prepayments from customers, current portion 4,919 183 — 4,736 Accrued expenses and other current liabilities 55,642 32,337 — 23,305 Income tax payable 20,888 20,020 — 868 Operating lease liabilities, current portion 13,890 8,503 — 5,387 Deferred revenue, current portion 27,019 18,865 — 8,154 Long-term debt, current portion — — — — Amounts due to related parties — 44,664 44,664 — Total current liabilities 122,358 124,572 44,664 42,450 Non-current liabilities Prepayments from customers, non-current portion 1,461 540 — 921 Deferred revenue, non-current portion 999 — — 999 Other non-current liabilities 11,645 2,071 — 9,574 Deferred income tax liabilities 1,768 14 — 1,754 Operating lease liabilities, non-current portion 65,689 47,239 — 18,450 TOTAL LIABILITIES 203,920 174,436 44,664 74,148 NET ASSETS (LIABILITIES) 79,156 (10,626) 22,576 112,358 26. SUBSEQUENT EVENT UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS For the year ended December 31, 2021 Divestiture Non Consolidated Divestiture Adjustment Divestiture Net revenues 180,313 102,966 — 77,347 Cost of revenues 149,142 94,590 — 54,552 Gross profit 31,171 8,376 — 22,795 Selling expenses 2,491 1,291 — 1,200 General and administrative expenses 20,286 2,181 — 18,105 Impairment loss on goodwill 4,559 4,559 — — Total operating expenses 27,336 8,031 — 19,305 Operating income 3,835 345 — 3,490 Interest income 219 144 — 75 Government subsidy income 2,491 1,053 — 1,438 Gain (loss) on disposal of subsidiaries 439 459 — (20) Gain on divestiture — 34,068 34,068 Income before income taxes 6,984 2,001 34,068 39,051 Less: Income tax expenses 3,440 1,126 — 2,314 Income before loss from equity method investments 3,544 875 — 36,737 Loss from equity method investments (15) (8) — (7) Net income 3,529 867 34,068 36,730 On April 30, 2022, Zhudou Investment (Beijing) Co., Ltd. (“Zhudou Investment”), together with its shareholders and its subsidiaries, entered into the exclusive consultation and service agreement, business operation agreement, exclusive option agreement and equity pledge agreement with one of the Company’s subsidiaries. In addition, Zhudou Investment and the shareholders of Zhudou Investment have signed the power of attorney and spouses of the shareholders of Zhudou Investment have signed the spousal consent respectively. Two of Zhudou Investment’s subsidiaries both hold valid Internet Content Provider license, which, pursuant to PRC laws and regulations, can only be held by companies with an ultimate capital contribution percentage by foreign investor(s) not exceed 50%, other than certain exceptions, and the main foreign investor must satisfy a number of stringent performance and operational experience requirements. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation and use of estimates | Basis of presentation and use of estimates The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions reflected in the Group’s financial statements include, but are not limited to, consolidation of the VIEs, purchase price allocation relating to business acquisitions, valuation allowance for deferred tax assets, useful lives of property, plant and equipment and intangible assets, impairment of long-lived assets, goodwill and long term investments, and incremental borrowing rate for leases. Actual results could materially differ from those estimates. |
Principles of consolidation | Principles of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries, its VIEs and VIEs’ subsidiaries and kindergartens. All profits, transactions and balances among the Company, its subsidiaries, its VIEs and VIEs’ subsidiaries and kindergartens have been eliminated upon consolidation. |
Foreign currency translation | Foreign currency translation The Company’s functional currency is the United States dollar. The functional currency of the Company’s subsidiaries, VIEs and VIEs’ subsidiaries and kindergartens in the PRC is the Chinese Renminbi (“RMB”). The functional currency of the Company’s subsidiaries in Singapore is the Singapore dollar (“SGD$”). Assets and liabilities are translated from each entity's functional currency to the reporting currency at the exchange rate on the balance sheet date. Equity accounts are translated at historical exchange rates, and revenues and expenses are translated using the average rate of exchange in effect during the reporting period. Translation adjustments are reported and shown as a separate component of other comprehensive income in the consolidated statements of changes in shareholders' equity and consolidated statements of comprehensive loss (income). Transactions in currencies other than the functional currencies during the year are converted into the applicable functional currencies at the applicable rates of exchange prevailing at the dates of the transactions. Monetary assets and liabilities denominated in currencies other than the functional currencies are remeasured into the functional currency using the applicable exchange rate at the balance sheet date. Exchange gains and losses are recognized in the consolidated statements of operations. |
Business Combinations | Business Combinations Business combinations are recorded using the acquisition method of accounting. The purchase price of the acquisition is allocated to the tangible assets, liabilities, identifiable intangible assets acquired and non-controlling interest, if any, based on their estimated fair values as of the acquisition date. The excess of the purchase price over those fair values is recorded as goodwill. Acquisition-related expenses are expensed as incurred. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents comprise cash at banks, on hand, which have original maturities of three months or less when purchased and are readily convertible into known amounts of cash. The carrying value of cash equivalents approximates fair value. |
Term deposits | Term deposits Term deposits consist of deposits placed with financial institutions with an original maturity of greater than three months and less than one year. |
Restricted cash | Restricted cash Restricted cash represents RMB deposits in restricted bank accounts for operating kindergartens as required by certain local regulations. The deposits in restricted bank accounts cannot be withdrawn until these kindergartens are closed. Restricted cash is classified as either current or non-current based on when the funds will be released in accordance with the terms of the respective agreement. |
Inventories | Inventories Inventories, mainly consisting of educational toys, teaching aids, and textbooks, are stated at the lower of cost or net realized value. Cost is determined using the weighted average method. Inventory is written down for damaged and slow-moving goods, which is dependent upon factors such as historical and forecasted consumption of the inventories. |
Fair value | Fair value Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Fair value - continued Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |
Financial instruments | Financial instruments The Group’s financial instruments consist primarily of cash and cash equivalents, term deposits, restricted cash, available-for-sale securities, accounts receivable, other receivables, current and non-current loan receivables, amounts due from related parties, current portion of long-term debt, amount due to related parties and other payables. The carrying amounts of cash and cash equivalents, term deposits, restricted cash, accounts receivable, other receivable, current loan receivables, amounts due from related parties, current portion of long-term debt, amount due to related parties and other payable approximate their fair values due to the short-term maturities of these instruments. Available-for-sale securities are carried at fair value. The carrying amount of non-current loan receivables approximates fair value as its interest rates are at the same level of current market yield for comparable loans. |
Allowance for doubtful accounts | Allowance for doubtful accounts Prior to January 1, 2020, an allowance for doubtful accounts is recorded in the period in which a loss is determined to be probable based on an assessment of specific evidence indicating doubtful collection, historical experience, account balance aging and prevailing economic conditions. Allowance is reversed when the underlying balance of doubtful accounts are subsequently collected. Receivable balances are written off when the Group determines that the balance is uncollectible. On January 1, 2020, the Group adopted ASC 326 Financial Instruments – Credit Losses Management used an expected credit loss model for the impairment of financial instruments mentioned above as of period ends. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Allowance for doubtful accounts - continued For the allowance of the accounts receivable, management believes the aging of accounts receivable is a reasonable parameter to estimate expected credit loss, and determines expected credit losses for accounts receivables using an aging schedule as of period ends. The expected credit loss rates under each aging schedule were developed on basis of the average historical loss rates from previous years, and adjusted to reflect the effects of those differences in current conditions and forecasted changes. Management measured the expected credit losses of accounts receivable on a collective basis. When an accounts receivable does not share risk characteristics with other accounts receivables, management will evaluate such accounts receivable for expected credit loss on an individual basis. Doubtful accounts balances are written off and deducted from allowance for credit loss, when receivables are deemed uncollectible, after all collection efforts have been exhausted and the potential for recovery is considered remote. For the allowance of the financial instruments other than accounts receivable and loan receivables, the Group has identified the relevant risk characteristics which include size, type of the services the Group provides, or a combination of these characteristics. Receivables with similar risk characteristics have been grouped into pools. For each pool, the Group considers the historical credit loss experience, current economic conditions, supportable forecasts of future economic conditions, and any recoveries in assessing the lifetime expected credit losses. When specific customers are identified as no longer sharing the same risk profile as their current pool, they are removed from the pool and evaluated separately. |
Loan receivables | Loan receivables Loan receivables are recorded at unpaid principal balances, net of unearned interest income. Prior to January 1, 2020, allowance is recorded to reflect the Group’s best estimate of the amounts that may not be collected. On January 1, 2020, upon adoption of ASC 326 starting from January 1, 2020, the Group establishes current expected credit losses model for loan receivables. The Group calculates the allowance on loan receivables by using a loss-rate approach whereby the loss-rate is determined based on the expectation of future economic conditions, historical collection experience and the possibility of default. The Group determined that the cumulative effect from the adoption of ASC 326 as of January 1, 2020 is immaterial. The Group recorded $nil, $1,464 and $1,441 allowance of loan receivables as of December 31, 2019, 2020 and 2021. 2. SIGNIFICANT ACCOUNTING POLICIES |
Property, plant and equipment, net | Property, plant and equipment, net Property, plant and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, as follows: Category Estimated useful life Buildings 35 years Furniture, fixture and equipment 5 years Motor vehicles 5 years Leasehold improvement Shorter of lease term or economic life Repair and maintenance costs are charged to expense as incurred, whereas the cost of renewals and betterment that extends the useful lives of property, plant and equipment are capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the cost and accumulated depreciation from the assets and accumulated depreciation accounts with any resulting gain or loss reflected in the consolidated statements of operations. |
Leases | Leases The Group adopted Topic 842 on January 1, 2019 using the modified retrospective transition approach. The Group has lease contracts for offices, kindergartens, play-and-learn centers and student care centers in different cities in the PRC and Singapore under operating leases. The Group determines whether an arrangement constitutes a lease and records lease liabilities and right-of-use assets on its consolidated balance sheets at lease commencement. The Group measures its lease liabilities based on the present value of the total lease payments not yet paid discounted based on the more readily determinable of the rate implicit in the lease or its incremental borrowing rate, which is the estimated rate the Group would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease. The Group estimates its incremental borrowing rate based on an analysis of publicly traded debt securities of companies with credit and financial profiles similar to its own. The Group measures right-of-use assets based on the corresponding lease liability adjusted for payments made to the lessor at or before the commencement date, and initial direct costs it incurs under the lease. The Group begins recognizing lease expense when the lessor makes the underlying asset available to the Group. For leases with lease term less than one year (short-term leases), the Group records operating lease expense in its consolidated statements of operations on a straight-line basis over the lease term and record variable lease payments as incurred. In April 2020, the FASB issued guidance for lease concessions provided to lessees in response to the effects of COVID-19. Such guidance allows lessees to make an election not to evaluate whether a lease concession provided by a lessor should be accounted for as a lease modification, in the event the concession does not result in a substantial increase in the rights of the lessor or the obligations of the lessee. Such concessions would be recorded as negative lease expense in the period of relief. The Group has elected to apply the practical expedient. See Note 15. |
Intangible assets, net | Intangible assets, net Intangible assets with definite lives are carried at cost less accumulated amortization and impairment. The amortization of such intangible assets is recognized over the expected useful lives of the assets. Intangible assets with indefinite lives are not amortized, but tested for impairment annually or more frequently if event and circumstances indicate that it might be impaired. 2. SIGNIFICANT ACCOUNTING POLICIES |
Impairment of long-lived assets with definite lives | Impairment of long-lived assets with definite lives Long-lived assets, including property, plant and equipment, operating lease right-of-use assets, intangible assets with definite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset or asset group may not be recoverable. When these events occur, the Group measures impairment by comparing the carrying value of the long-lived assets or assets group to the estimated undiscounted future cash flows expected to result from the use of the assets or asset group and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets or assets group, the Group would recognize an impairment loss based on the fair value of the assets or assets group. The Group recorded impairment loss on property, plant, and equipment and operating lease right-of-use assets of $ nil , $ 428 and $nil during the years ended December 31, 2019, 2020 and 2021. The Group recorded impairment losses on intangible assets with definite lives of $ 79 , $1,720 and $nil during the years ended December 31, 2019, 2020 and 2021. |
Impairment of goodwill and indefinite-lived intangible assets | Impairment of goodwill and indefinite-lived intangible assets Goodwill is not amortized, but tested for impairment annually or more frequently if event and circumstances indicate that it might be impaired. The guidance permits the Group to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment test. Absent from any impairment indicators, the Group performs its annual impairment test on the last day of each fiscal year Prior to January 1, 2020, the Group performed its annual impairment test using a two-step approach. The first step compares the fair value of a reporting unit to its carrying amount, including goodwill. If the fair value of the reporting unit is greater than its carrying amount, goodwill is not considered impaired and the second step is not required. If the fair value of the reporting unit is less than its carrying amount, the second step of the impairment test measures the amount of the impairment loss, if any, by comparing the implied fair value of goodwill to its carrying amount. If the carrying amount of goodwill exceeds its implied fair value, an impairment loss is recognized equal to that excess. The implied fair value of goodwill is calculated in the same manner that goodwill is calculated in a business combination, whereby the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit, with the excess purchase price over the amounts assigned to assets and liabilities representing the implied fair value of goodwill. On January 1, 2020, the Group adopted ASU No. 2017-04, Intangibles—Goodwill and Other Simplifying the Test for Goodwill Impairment Goodwill is tested for impairment annually for each reporting units or more frequently if events or changes in circumstances indicate that it might be impaired. The Group performs its annual quantitative impairment assessment considering the weighting of both an income and a market approach. The income approach is based on estimated present value of future cash flows for each reporting unit carrying a goodwill balance. The market approach is based on assumptions about how market data relates to each reporting unit carrying a goodwill balance. The weighting of these two approaches is based on their individual correlation to the economics of each reporting unit carrying a goodwill balance. When using discounted cash flow model to determine the fair value of a reporting unit, the discounted cash flow model includes a number of significant unobservable inputs. Key assumptions used to determine the estimated fair value include: (a) internal cash flows forecasts including expected revenue growth, operating margins and estimated capital needs, (b) an estimated terminal value using a terminal year long-term future growth rate determined based on the growth prospects of the reporting units; and (c) a discount rate that reflects the weighted-average cost of capital adjusted for the relevant risk associated with each reporting unit's operation and the uncertainty inherent in the Group's internally developed forecast. The impairment test for intangible assets not subject to amortization consists of a comparison of the fair value of the intangible asset with its carrying value. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Group recorded impairment losses on goodwill of $337, $8,454 and $4,559 during the years ended December 31, 2019, 2020 and 2021. No impairment loss was recorded for the indefinite-lived intangible assets. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Long-term investments The Group’s long-term investments consist of equity method investments and available-for-sale security. (a) Equity method investments For an investee company over which the Group has the ability to exercise significant influence, but does not have a controlling interest in common shares or in-substance common shares, the Group accounts for the investment under the equity method. Significant influence is generally considered to exist when the Group has an ownership interest in the voting stock of the investee between 20% and 50%. Other factors, such as representation on the investee’s board of directors, voting rights and the impact of commercial arrangements, are also considered in determining whether the equity method of accounting is appropriate. Under the equity method, the Group initially records its investments at cost and subsequently recognizes its proportionate share of each equity investee’s net income or loss after the date of investment into earnings and accordingly adjusts the carrying amount of the investment. An impairment charge is recorded if the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The Group estimates the fair value of the investee company using discounted cash flow approach which requires significant judgments, including the estimation of future cash flows, which is dependent on internal forecasts, the estimation of long-term growth rate of a company’s business, the estimation of the useful life over which cash flows will occur, and the determination of the weighted average cost of capital. The Group recorded $nil, $1,819 and $nil of impairment losses on its equity method investments during the years ended December 31, 2019, 2020 and 2021. (a) Available-for-sale securities For investment in preferred shares which is determined to be debt securities, the Group accounts for them as long-term available-for-sale securities when they are not classified as either trading or held-to-maturity investments. Available-for-sale securities are carried at their fair values and the unrealized gains or losses from the changes in fair values are included in accumulated other comprehensive income (loss). The Group reviews its investment in available-for-sale securities, for other-than-temporary impairment based on the specific identification method. The Group considers available quantitative and qualitative evidence in evaluating potential impairment of its investments. When assessing investments for other-than-temporary declines in value, the Group considers, among other factors, general market conditions, government economic plans, the duration and the extent to which the fair value of the investment is less than the cost, and the Group’s intent and ability to hold the investment, in determining if impairment is needed. The Group recorded $nil, $613 and $nil of impairment losses on its available-for-sale securities during the years ended December 31, 2019, 2020 and 2021. |
Long-term investments | 2. SIGNIFICANT ACCOUNTING POLICIES - continued |
Revenue recognition | Revenue recognition On January 1, 2018, the Group adopted ASC 606 applying the modified retrospective method to all contracts that were not completed as of January 1, 2018. Results for reporting period beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Revenue recognition The Group follows five steps for its revenue recognition under ASC 606: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Group generated its revenues from the following revenue sources: (i) Tuition fees generated from kindergarten services, play-and- learn center services and student care services The Group provides private kindergarten services, play-and-learn centers services and students care centers services to students. Tuition fees are collected in advance and are initially recorded as deferred revenue. Kindergarten services consist of a series of classes which are highly interdependent and interrelated in the context of the contract and each class is not distinct and not sold standalone. Therefore, the kindergarten services are accounted for as a single performance obligation. Play-and-learn center services provide a different series of classes which are highly interdependent and interrelated in the context of the contract and each class is not distinct and not sold standalone. Therefore, play-and-learn center services are accounted for as a single performance obligation. Student care services provide a separate series of classes which are highly interdependent and interrelated in the context of the contract and each class is not distinct and not sold standalone. Therefore, student care services are accounted for as a single performance obligation. The transaction prices for kindergarten services, play-and-learn centers services and student care services are determined by the contract amount net of refund. For the kindergarten program, the students can claim certain amount of the tuition refund, upon withdrawal, if more than a certain number of classes are missed. For the play-and-learn program, students are entitled to refund, upon withdrawal, for unused portion of the prepaid course fees. For the student care services, the students can claim refund, upon withdrawal, if classes are missed due to illness. The refund amount is subject to the refund policy at each facility and the timing of the student’s withdrawal. Revenues for the kindergarten services and student care center services are recognized on a straight line basis over the service period. Revenues for the play-and-learn centers services are recognized ratably over the course of the programs. (ii) Franchising fees The Group generates revenues by franchising kindergartens and play-and-learn centers under the brand name of RYB. The Group collects from franchisees the initial franchising fees and annual franchise fee. As the initial franchising service and annual franchising service are distinct from each other, the Group identifies two performance obligations accordingly. The transaction price is allocated to each performance obligation based on a relative stand-alone selling price. Initial franchising fees represent provision of initial set-up services which are typically received upfront and recorded as prepayments from customers. The set-up period usually begins with the site renovation or training services, whichever is earlier, to the time point when kindergartens or play-and-learn centers commence operations, which is approximately 7 or 8 months. Initial franchising fees are recognized over time throughout the set-up period. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Revenue recognition (ii) Franchising fees – continued Annual franchise fees represent supporting services provided by the Group to the franchised kindergartens or play-and-learn centers. The related annual franchise fees are received upfront and recorded as deferred revenue. Annual franchise fees are recognized over time throughout the contract terms. (iii) Sales of educational merchandise The Group’s educational merchandise consists of educational toys, teaching aids, textbooks and other goods. The Group considers both franchisees and end-users as its customers. Prepayments for sales of educational merchandise is recognized as prepayments from customers. Sales of educational merchandise is accounted for as a single performance obligation, and recognized at the point of time when the control of promised goods is transferred to the customers. (iv) Training services The Group provides training services to the franchised kindergartens and play-and-learn centers. The Group identified the training services as a single performance obligation, and given the trainings are usually performed during a short period of time, revenues are recognized at the point of time when training services are delivered. (v) Royalty fees The Group authorizes its business partners the right to use its educational courses and relevant solutions. The royalty fees are received upfront and recorded as deferred revenue. The Group identified the royalty fees as a single performance obligation, and revenues are recognized over time throughout the contract terms. Disaggregation of revenue The following table presents the Group’s revenues disaggregated by revenue sources. Years ended December 31, 2019 2020 2021 Net revenues: PRC kindergartens 131,427 68,319 128,402 PRC play-and-learn centers 24,901 12,215 13,254 Singapore kindergartens, student care centers and others 19,073 25,964 31,007 Others 6,882 3,217 7,650 Total net revenues 182,283 109,715 180,313 2. SIGNIFICANT ACCOUNTING POLICIES - continued Revenue recognition Disaggregation of revenue The following table presents the Group’s revenues disaggregated by revenue types. Years ended December 31, 2019 2020 2021 Services: Tuition fees from kindergartens, play-and-learn centers and student care centers 147,417 92,123 157,988 Franchise fees 12,269 9,065 10,140 Training and other services 6,156 1,632 4,096 Royalty fees 341 253 180 166,183 103,073 172,404 Products: Sale of educational merchandise 16,100 6,642 7,909 Total net revenues 182,283 109,715 180,313 2. SIGNIFICANT ACCOUNTING POLICIES - continued Revenue recognition Contract liabilities The Group’s contract liabilities consists of prepayments from customers and deferred revenue, primarily relate to the advance consideration received from customers, which include tuition fees received from customers, initial franchise fees and annual franchise fees received from franchisees, advance consideration of educational merchandise received from customers, and royalty fees received from other business partners. The amount from customers before provision of service is recognized as prepayments and when the service is provided, the advance received was recorded in deferred revenue. The prepayments from customers and deferred revenue are recognized as revenue once the criteria for revenue recognition are met. The table below reflects the Group’s contract liabilities: As of December 31, 2020 2021 Prepayments from customers, current portion 4,145 4,919 Prepayments from customers, non-current portion 4,024 1,461 Deferred revenue, current portion 34,351 27,019 Deferred revenue, non-current portion 1,726 999 The Group recognized $ 31,000 There was no contract asset recorded as of December 31, 2020 and 2021. |
Value added taxes | Value added taxes Pursuant to the PRC tax laws, in case of any product sales, generally the value added tax (“VAT”) rate is 17% of the gross sales for general VAT payer before May 1, 2018. Some subsidiaries of the Group are deemed as general VAT payer for the sales of educational merchandise and the intercompany sales. The net VAT balance, after netting off the input VAT, is recorded as accrued expenses and other current liabilities in the Group’s consolidated financial statements. Since May 1, 2018, the VAT rate decreased to 16% of the gross sales for general VAT payer. Therefore, VAT is calculated at 16% on the sales of educational merchandise and paid after deducting input VAT on purchases for the period of May 1, 2018 to March 31, 2019. Since April 1, 2019, the VAT rate decreased to 13% of the gross sales for general VAT payer. Therefore, VAT is calculated at 13% on the sales of educational merchandise and paid after deducting input VAT on purchases since April 1, 2019. Tuition fees generated from kindergarten services in the PRC are qualified for VAT exemption pursuant to a circular jointly released by the Ministry of Finance and Finance and State Administration of Taxation. Revenue generated from other services in the PRC, namely play-and-learn center services, franchise fees, royalty fees, and training services, is reported net of VAT, at a rate of 6%, collected on behalf of PRC tax authorities, except for entities who are designated as a small scale VAT payers. Small scale VAT payer is subject to VAT at a rate of 3% on play-and-learn center services and training services, which was reduced to 1% from March 1, 2020 to December 31, 2021, due to the pandemic of COVID-19. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Value added taxes Goods and Services Tax (“GST”) is a broad-based value added tax in Singapore, which is imposed on all supplies of goods and services in Singapore made by a taxable person for business purposes. GST rate is 7% of the gross sales. Singapore’s entities whose taxable turnover for the past 12 months exceeds SGD$1 million or the taxable turnover in the next 12 months to be more than SGD$1 million should be registered as GST-registered companies. For GST-registered entities, their revenue generated from kindergarten services, student care services and others, is reported net of GST collected on behalf of Singapore tax authorities. For Non-GST registered entities, they are qualified for GST exemption for all kinds of revenue. |
Income taxes | Income taxes Current income taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the financial statements. Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all of the deferred tax assets will not be realized. The impact of an uncertain income tax position is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. |
Share-based compensation | Share-based compensation Share-based compensation are measured based on the grant date fair value of the equity instrument. Share-based compensation expenses are recognized over the requisite service period based on the graded vesting attribution method with corresponding impact reflected in additional paid-in capital. When no future services are required to be performed by grantees in exchange for an award of equity instruments, the cost of the award is expensed on the grant date. The Group elects to recognize forfeitures when they occur. |
Government subsidies | Government subsidies The Group receives government subsidies at the discretion of the local government based on certain criteria in relation to the Group’s kindergarten operations. Government subsidies are recognized as liabilities when the government subsidies are received, and released to consolidated statements of operations as government subsidy income when the Group is not subject to further obligation or future refunds. For government subsidies granted to specific kindergartens to subsidize their rental and teacher training costs are recorded by offset to the cost of revenues when the conditions are met. For the years ended December 31, 2019, 2020 and 2021, $499, $4,591 and $2,491 were recognized as government subsidy income, respectively; $6,022, $12,703 and $20,898 |
Net loss per share | Net income/loss per share Basic net income/loss per share is computed by dividing net income or loss attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the period. The share options exercisable for little to no consideration are considered as issuable ordinary shares, and therefore included in basic shares outstanding. Diluted net income/loss per share reflects the potential dilution that could occur if securities to issue ordinary shares were exercised or converted into ordinary shares. The dilutive effect of outstanding share-based awards is reflected in the diluted net (loss) income per share by application of the treasury stock method. |
Comprehensive income (loss) | Comprehensive income (loss) Comprehensive income (loss) includes net income (loss) and foreign currency translation adjustments and is reported in the consolidated statements of comprehensive income (loss). The Group presents the components of net income (loss), the components of other comprehensive income (loss) and total comprehensive income (loss) in two separate but consecutive statements. |
Contingency | Contingency The Group is subject to lawsuits, investigations and other claims related to the operation of its kindergartens, product, and other matters, and are required to assess the likelihood of any adverse judgments or outcomes to these matters, as well as potential ranges of probable losses and fees. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. |
Significant risks and uncertainties | Significant risks and uncertainties Foreign currency risk RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. The cash and cash equivalents, term deposit and restricted cash of the Group included aggregate amounts of $23,263 and $35,967 54 Concentration of credit risk Financial instruments that potentially expose the Group to significant concentration of credit risk primarily consist of cash and cash equivalents, term deposits, accounts receivable, loan receivables, amounts due from related parties and prepaid expenses and other current assets. As of December 31, 2021, all of the Group’s cash and cash equivalents and term deposits were deposited in financial institutions located in the PRC, the United States of America and Singapore. Accounts receivable are typically unsecured and are derived from revenue earned from customers in the PRC and Singapore. The risk with respect to accounts receivable is mitigated by credit evaluations the Group performs on its customers and its ongoing monitoring process of outstanding balances. 2. SIGNIFICANT ACCOUNTING POLICIES - continued Significant risks and uncertainties There are no revenues or accounts receivable from customers which individually represent greater than 10% of the total net revenues in the three years ended December 31, 2021 or accounts receivable as of December 31, 2020 and 2021. |
Recent accounting pronouncements adopted | Recent accounting pronouncements In December 2019, the FASB issued ASU 2019-12, Income taxes (Topic 740)-Simplifying the accounting for income taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes. The ASU will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Group adopted the ASU on January 1, 2021, which did not have a material impact on the consolidated financial statements. In August 2020, the FASB issued ASU No.2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity(Subtopic 815-40):Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity(ASU 2020-06),which simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments. This guidance also eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. The amendments are effective for fiscal years beginning after December 15 2021, including interim periods within those fiscal years, with early adoption permitted. The Group adopted ASU 2020-06 on January 1, 2022, and the adoption had no material impact on the Group’s consolidated financial statements. In May 2021 the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718). and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40)to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity -classified written call options (for example warrants) that remain equity classified after modification or exchange. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. The Group is currently evaluating the impact of the new guidance on our consolidated financial statements. In October 2021, the FASB issued ASU No.2021-08 Business Combinations (Tonic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU2021-08),which clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with Topic 606 Revenue from Contracts with Customers. The new amendments are effective for us are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The amendments should be applied prospectively to business combinations occurring on or after the effective date of the amendments with early adoption permitted. The Group is currently evaluating the impact of the new guidance on our consolidated financial statements. |
ORGANIZATION AND BASIS OF PRE_2
ORGANIZATION AND BASIS OF PRESENTATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
ORGANIZATION AND BASIS OF PRESENTATION | |
Schedule of Company's subsidiary, its VIE and VIE's significant subsidiaries and kindergartens | As of December 31, 2021, details of the Company’s subsidiaries, its VIEs and VIEs’ major subsidiaries and kindergartens were as follows: Date of Percentage of establishment Place of legal ownership Name or acquisition establishment by the Company Principal activities Subsidiaries: Beijing RYB Technology Development Co., Ltd. (“RYB Technology”) December 24, 2007 PRC 100% Investment holding and provision of educational services QIYUAN Education Technology (Tianjin) Co., Ltd (“TJ Qiyuan”) May 18, 2018 PRC 100% Investment holding and provision of educational services Beijing Beilin International Education Co., Ltd. (“BJ Beilin”) September 28, 2018 PRC 90% Investment holding and provision of educational services Precious Companion Group Limited August 4, 2018 Hong Kong 100% Investment holding and provision of educational services Digital Knowledge World Co., Ltd. September 1, 2018 Cayman Islands 100% Investment holding and provision of educational services Digital Education Co., Ltd. September 1, 2018 Hong Kong 100% Investment holding and provision of educational services Beilin International Education Limited September 1, 2018 Hong Kong 100% Investment holding and provision of educational services Global Eduhub Pte Ltd. April 1, 2019 Singapore 82.3% Investment holding and provision of educational services Global Edu (SG) Holding Pte Ltd. April 1, 2019 Singapore 82.3% Investment holding and provision of educational services Global Eduhub Holding Limited April 1, 2019 Hong Kong 82.3% Investment holding and provision of educational services Variable interest entities: Beijing RYB Children Education Technology Development Co., Ltd. (“Beijing RYB”) July 3, 2001 PRC Consolidated VIE Investment holding and provision of educational services Beiyao Technology Development Co., Ltd. (“Beiyao”) June 15, 2018 PRC Consolidated VIE Investment holding and provision of educational services Beijing Haidian District Bozhi Training School (“Bozhi”) September 28, 2018 PRC Consolidated VIE Training services Shanghai Huiliang Technology Development Co., Ltd. (“Shanghai Huiliang”) April 1, 2020 PRC Consolidated VIE Investment holding and provision of educational services Major subsidiaries and kindergartens (1) : Shenzhen RYB Children Education Technology Development Co., Ltd. June 20, 2007 PRC Consolidated VIE Sale of educational merchandise and provision of educational services Beijing Youer Lezhi Technology Development Co., Ltd. April 2, 2014 PRC Consolidated VIE Play-and-learn center services Shanghai Geleli Technology Development Co., June 4, 2019 PRC Consolidated VIE Sale of educational merchandise and provision of educational services NASCANS Pte. Ltd. April 1, 2019 Singapore 82.3% Provision of educational services Beijing Haidian District RYB Multi-Dimension Intelligence Experimental Kindergarten (2) January 10, 2005 PRC Consolidated VIE Kindergarten services Beijing Fengtai District RYB Multi-Dimension Intelligence Experimental Kindergarten (2) April 14, 2005 PRC Consolidated VIE Kindergarten services Beijing Development RYB Bilingual Kindergarten (2) February 21, 2006 PRC Consolidated VIE Kindergarten services Mulberry Learning Centre International Pte Ltd April 1, 2019 Singapore 82.3% Kindergarten services Mulberry Learning Centre Tanjong Pagar Pte Ltd April 1, 2019 Singapore 82.3% Kindergarten services Beijing Chaoyang District RYB Xintiandi Kindergarten (2) April 11, 2011 PRC Consolidated VIE Kindergarten services Changsha Kaifu District RYB Kindergarten (2) March 30, 2012 PRC Consolidated VIE Kindergarten services Hefei Faneng Sunshine Beach Kindergarten (2) January 18, 2013 PRC Consolidated VIE Kindergarten services Beijing Chaoyang District Mulberry Kindergarten (2) July 5, 2013 PRC Consolidated VIE Kindergarten services Changzhou Wujin District RYB New City Villa Kindergarten (2) February 17, 2014 PRC Consolidated VIE Kindergarten services Chongqing North Bank RYB Huarun Central Park Kindergarten May 26, 2014 PRC Consolidated VIE Kindergarten services Changzhou Tianning District Huarun International RYB Kindergarten September 25, 2014 PRC Consolidated VIE Kindergarten services 1. ORGANIZATION AND BASIS OF PRESENTATION Jinan Licheng District RYB Wanxiang New Sky Kindergarten (2) October 30, 2014 PRC Consolidated VIE Kindergarten services Xiamen Siming District RYB Yongniantianshu Kindergarten (2) July 10, 2015 PRC Consolidated VIE Kindergarten services Jinan Licheng District Wangsheren Street RYB Kindergarten (2) October 30, 2016 PRC Consolidated VIE Kindergarten services Beijing Shunyi District RYB City Garden Kindergarten (2) November 1, 2016 PRC Consolidated VIE Kindergarten services Beijing XueErLe Education Technology Co., Ltd December 13, 2016 PRC Consolidated VIE Kindergarten services Beijing Xicheng District RYB Kindergarten (2) January 16, 2017 PRC Consolidated VIE Kindergarten services Xiamen Jimei District RYB Kindergarten (2) April 19, 2017 PRC Consolidated VIE Kindergarten services ZaoZhuang RYB Kindergarten (2) May 1, 2018 PRC Consolidated VIE Kindergarten services Chongqing Liangjiang New District RYB Leyuan Kindergarten Co., Ltd. June 1, 2018 PRC Consolidated VIE Kindergarten services Tengzhou RYB Renhe Tiandi Kindergarten (2) May 1, 2018 PRC Consolidated VIE Kindergarten services Shanghai Peidi Culture Communication Co., Ltd (Shanghai Peidi) July 1, 2018 PRC Consolidated VIE Kindergarten services Alphabet Playhouse Childcare and Learning Centre Pte Ltd April 1, 2019 Singapore 82.3% Kindergarten services Alphabet Playhouse East Coast Pte Ltd April 1, 2019 Singapore 82.3% Kindergarten services Beijing RYB Children Education Technology Development Co., Ltd. July 3, 2001 PRC Consolidated VIE Investment holding and provision of educational services Beijing Digital Knowledge Dream Flying Wanliu Kindergarten Haidian Co. LTD September 30, 2018 PRC Consolidated VIE Kindergarten services Changsha Boyu Education Technology Development Co., LTD October 21, 2019 PRC Consolidated VIE Sale of educational merchandise and provision of educational services Mulberry Learning Centre Alexandra Pte Ltd November 1, 2019 Singapore 82.3% Kindergarten services Shenzhen Longhua District Mulberry Kindergarten (2) January 1, 2019 PRC Consolidated VIE Kindergarten services Little Greenhouse Bukit Batok Pte Ltd April 1, 2019 Singapore 82.3% Kindergarten services Global Eduhub Pte Ltd. April 1, 2019 Singapore 82.3% Investment holding and provision of educational services Beijing Chaoyang District Digital Knowledge Dream Flying Kindergarten (2) September 30, 2018 PRC Consolidated VIE Kindergarten services Little Greenhouse Sengkang Pte Ltd April 1, 2019 Singapore 82.3% Kindergarten services Changsha Tianxin District Yuwentai RYB Kindergarten (2) September 1, 2018 PRC Consolidated VIE Kindergarten services Chongqing RYB leyuan Art Training Co. LTD February 25, 2011 PRC Consolidated VIE Sale of educational merchandise and provision of educational services Guangzhou Yuexiu District RYB Donghai Jiayuan Kindergarten (2) February 29, 2012 PRC Consolidated VIE Kindergarten services Changsha Yuhua District Liudu RYB Kindergarten (2) October 1, 2017 PRC Consolidated VIE Kindergarten services Changsha Furong District RYB Kindergarten Co. LTD September 30, 2017 PRC Consolidated VIE Kindergarten services Little Greenhouse S540 Pte Ltd April 1, 2019 Singapore 82.3% Kindergarten services Guiyang Wudang District RYB Poly Hot Spring Kindergarten (2) August 31, 2013 PRC Consolidated VIE Kindergarten services Chongqing Liangjiang New District RYB Investment Garden City Kindergarten (2) February 28, 2015 PRC Consolidated VIE Kindergarten services Little Greenhouse Childcare & Development Pte Ltd April 1, 2019 Singapore 82.3% Kindergarten services Guangzhou Yuexiu District RYB Wende Road Kindergarten (2) March 30, 2018 PRC Consolidated VIE Kindergarten services Zhuzhou Tianyuan District RYB Kindergarten (2) August 31, 2016 PRC Consolidated VIE Kindergarten services Shenzhen Futian District RYB Tian Golf Longyuan Kindergarten (2) August 31, 2011 PRC Consolidated VIE Kindergarten services Changsha Quantang Street RYB Kindergarten (2) September 1, 2018 PRC Consolidated VIE Kindergarten services Allegiance (Edu) Ptd Ltd April 1, 2020 Singapore 82.3% Kindergarten services Little Greenhouse S553 Pte Ltd April 1, 2019 Singapore 82.3% Kindergarten services Changsha Tianxin District RYB Kindergarten (2) February 28, 2017 PRC Consolidated VIE Kindergarten services (1) The Group had 199 entities including 108 kindergartens as of December 31, 2021. The English name is for identification purpose only. (2) These kindergartens are established and controlled by Beijing RYB, Beiyao or their subsidiaries. Under PRC laws and regulations, entities who establish kindergartens are commonly referred to as “sponsors” instead of “owners” or “shareholders”. The economic substance of “sponsorship” in respect of kindergartens is substantially similar to that of ownership with respect to legal, regulatory and tax matters. |
Schedule of consolidated assets and liabilities, operating results and cash flows of the Company's VIE and VIE's subsidiaries and kindergartens | As of December 31, 2020 2021 Cash and cash equivalents 21,111 32,964 Prepaid expenses and other current assets 7,378 8,219 Total current assets 35,314 47,171 Total assets 186,948 171,872 Total current liabilities 106,357 98,706 Total liabilities 188,123 165,956 For the years ended December 31, 2019 2020 2021 Net revenues 162,644 80,107 142,005 Net income (loss) 13,743 (34,938) 9,339 Net cash provided by (used in) operating activities 14,691 (12,007) 14,041 Net cash used in investing activities (16,360) (2,368) (3,135) Net cash (used in) provided by financing activities (1,457) 460 (820) Effects of exchange rate changes (495) (1,395) 1,632 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of property, plant and equipment estimated useful life and residual value | Category Estimated useful life Buildings 35 years Furniture, fixture and equipment 5 years Motor vehicles 5 years Leasehold improvement Shorter of lease term or economic life |
Schedule of revenues disaggregated by revenue sources and revenue types | Years ended December 31, 2019 2020 2021 Net revenues: PRC kindergartens 131,427 68,319 128,402 PRC play-and-learn centers 24,901 12,215 13,254 Singapore kindergartens, student care centers and others 19,073 25,964 31,007 Others 6,882 3,217 7,650 Total net revenues 182,283 109,715 180,313 2. SIGNIFICANT ACCOUNTING POLICIES - continued Revenue recognition Disaggregation of revenue The following table presents the Group’s revenues disaggregated by revenue types. Years ended December 31, 2019 2020 2021 Services: Tuition fees from kindergartens, play-and-learn centers and student care centers 147,417 92,123 157,988 Franchise fees 12,269 9,065 10,140 Training and other services 6,156 1,632 4,096 Royalty fees 341 253 180 166,183 103,073 172,404 Products: Sale of educational merchandise 16,100 6,642 7,909 Total net revenues 182,283 109,715 180,313 |
Schedule of contract liabilities | As of December 31, 2020 2021 Prepayments from customers, current portion 4,145 4,919 Prepayments from customers, non-current portion 4,024 1,461 Deferred revenue, current portion 34,351 27,019 Deferred revenue, non-current portion 1,726 999 |
BUSINESS ACQUISITIONS (Tables)
BUSINESS ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Shenzhen Ranlo | |
BUSINESS ACQUISITIONS | |
Schedule of purchase price allocation at date of acquisition | The management performed a purchase price allocation with the assistance from an independent appraiser, as of the acquisition date: Depreciation or amortization period Cash and cash equivalents 576 Other current assets 789 Property, plant and equipment, net 4,462 5-10 years Operating lease right-of-use assets 2,612 Intangible assets: Student base 145 4 years Other current liabilities (477) Deferred tax liabilities (36) Deferred revenue (245) Operating lease liabilities (2,612) Goodwill 771 Total 5,985 |
GEH | |
BUSINESS ACQUISITIONS | |
Schedule of purchase price allocation at date of acquisition | The management performed a purchase price allocation with the assistance from an independent appraiser, as of the acquisition date: Depreciation or amortization period Cash and cash equivalents 663 Other current assets 2,224 Property, plant and equipment, net 2,920 5-10 years Operating lease right-of-use assets 5,924 Intangible assets: Student base 3,650 5.67 years Trademark 7,766 Indefinite Initial franchise 1,626 3.75 years Other current liabilities (6,266) Deferred tax liabilities (2,217) Operating lease liabilities (6,062) Non-controlling interest (6,895) Goodwill 18,081 Total 21,414 |
Shanghai Geleli | |
BUSINESS ACQUISITIONS | |
Schedule of purchase price allocation at date of acquisition | The management performed a purchase price allocation with the assistance from an independent appraiser, as of the acquisition date: Depreciation or amortization period Cash and cash equivalents 1,190 Other current assets 611 Operating lease right-of-use assets 64 Intangible assets: Brand 1,129 5 years Non-compete agreement 347 5 years Customer relationship 87 9.5 years Other current liabilities (177) Deferred tax liabilities (391) Operating lease liabilities (64) Non-controlling interest (4,050) Goodwill 6,564 Total 5,310 |
Beijing Xingqiba | |
BUSINESS ACQUISITIONS | |
Schedule of purchase price allocation at date of acquisition | The management performed a purchase price allocation with the assistance from an independent appraiser, as of the acquisition date: Depreciation or amortization period Cash and cash equivalents 2 Other current assets 20 Intangible assets: Software and courses 208 5 years Non-compete agreement 297 6 years Exclusive agent agreement 30 0.67 year Other current liabilities (26) Deferred tax liabilities (134) Non-controlling interest (1,130) Goodwill 2,030 Total 1,297 |
Mulberry Alexandra | |
BUSINESS ACQUISITIONS | |
Schedule of purchase price allocation at date of acquisition | The management performed a purchase price allocation with the assistance from an independent appraiser, as of the acquisition date: Depreciation or amortization period Cash and cash equivalents 283 Other current assets 67 Property and equipment, net 91 5-10 years Operating lease right-of-use assets 557 Intangible assets: Student base 190 5.17 years Other current liabilities (431) Deferred tax liabilities (47) Operating lease liabilities (557) Goodwill 894 Total 1,047 |
Shanghai Jinfeng Kindergarten | |
BUSINESS ACQUISITIONS | |
Schedule of purchase price allocation at date of acquisition | The following table summarized the fair value of the acquired assets and liabilities which were determined with the assistance from an independent appraiser as of the acquisition date: Depreciation or amortization period Cash and cash equivalents 426 Other current assets 162 Operating lease right-of-use assets 4,326 Intangible assets: Student base 188 3.2 years Other current liabilities (456) Deferred tax liabilities (47) Operating lease liabilities (3,970) Non-controlling interest (480) Goodwill 391 Additional paid in capital (540) Total — |
CASH AND CASH EQUIVALENTS, AN_2
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH | |
Summary of reconciliation of cash and cash equivalents, and restricted cash | As of December 31, 2020 2021 Cash and cash equivalents 53,454 65,263 Restricted cash 1,127 993 Cash and cash equivalents, and restricted cash 54,581 66,256 |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
ACCOUNTS RECEIVABLE, NET | |
Schedule of accounts receivable, net | As of December 31, 2020 2021 Accounts receivable 2,311 1,773 Less: allowance for doubtful accounts (467) (473) Accounts receivable, net 1,844 1,300 |
Schedule of movement of allowance for doubtful accounts | As of December 31, 2020 2021 Balance at beginning of the year 92 467 Adoption of ASC326 343 — Addition 15 30 Foreign currency adjustment 17 (24) Balance at end of the year 467 473 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INVENTORIES | |
Schedule of inventories | As of December 31, 2020 2021 Educational merchandise 5,773 6,130 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
Schedule of prepaid expenses and other current assets | As of December 31, 2020 2021 Prepaid service fees 2,196 1,781 Prepaid rental expenses (1) 637 935 Staff advances 528 662 Prepayment for inventories and others 368 283 Government subsidy receivables 2,856 3,192 Receivables from the disposal of subsidiaries and investment (2) 2,589 2,636 Receivables from third party payment platform 306 331 Others 2,325 2,411 11,805 12,231 Less: allowance for doubtful accounts (2,878) (2,887) 8,927 9,344 (1) The Group adopted Topic 842 on January 1, 2019 using the modified retrospective transition approach allowed under ASU 2018-11 as described in Note 2. The balance as of December 31, 2020 and 2021 represented prepaid rental expenses for short-term leases which the Group elected not to record on balance sheets under Topic 842. The prepaid rental expenses for operating lease expenses over one year as of December 31, 2020 and 2021 were included in the Group’s operating lease right-of-use assets on its consolidated balance sheet. (2) The balance as of December 31, 2020 and 2021 included $1,909 receivable from the principal shareholder of the Company’s investee, Beijing Da Ai Pre-school Management Education Technology Co., Ltd. 100% valuation allowance for doubtful accounts was recorded for the total balance of the receivable as of December 31, 2020 and 2021, respectively (see Note 12). |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
PROPERTY, PLANT AND EQUIPMENT, NET | |
Summary of Property, plant and equipment | As of December 31, 2020 2021 Buildings 956 978 Furniture, fixture and equipment 14,913 15,397 Leasehold improvement 80,464 79,469 Motor vehicles 1,130 971 Total 97,463 96,815 Less: Accumulated depreciation (49,428) (57,248) Impairment (397) (188) 47,638 39,379 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
GOODWILL | |
Schedule of changes in carrying amount of goodwill | As of December 31, 2020 2021 Costs: Beginning balance 53,024 54,938 Addition 210 391 Disposal — (796) Foreign currency adjustment 1,704 1,440 Ending balance 54,938 55,973 Goodwill impairment (8,791) (13,871) Goodwill, net 46,147 42,102 |
Schedule of key assumptions were made in the discounted cash flow model to determine the fair value of each reporting unit | Reporting Units in PRC GEH Revenue growth 2%-14% 8%-12% WACC 18% 14% Income Tax Rate 25% 17% Terminal growth rate 2.3% 2% Forecasted inflation rate 2.3% 2% |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INTANGIBLE ASSETS, NET | |
Schedule of intangible assets, net | As of December 31, 2020 2021 Intangible assets not subject to amortization: Trademark 7,766 7,766 Intangible assets subject to amortization: Trademark 1,551 2,298 Student base 7,939 8,213 Initial franchise 1,626 1,626 Brand 1,195 1,224 Non-compete agreement 674 690 Customer relationship 92 94 Software and courses 545 669 Contracts 31 31 Total costs 21,419 22,611 Less: accumulated amortization (5,334) (7,923) impairment (1,906) (1,951) Intangible assets, net 14,179 12,737 |
Schedule of estimated amortization expenses for future period | Years ending December 31, 2022 2,259 2023 1,213 2024 937 2025 112 2026 82 2027 and thereafter 368 Total expected amortization expense 4,971 |
OTHER NON-CURRENT ASSETS (Table
OTHER NON-CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
OTHER NON-CURRENT ASSETS | |
Schedule of other non-current assets | As of December 31, 2020 2021 Rental deposits (1) 5,964 5,428 Prepayment for investments (2) 6,017 2,197 Prepayment for property, plant and equipment 1,943 927 Others 514 116 14,438 8,668 (1) Rental deposits represent office and kindergartens rental deposits for the Group’s operations, which will not be refunded within one year. (2) On June 21, 2019, the Group entered into an agreement to additionally acquire 10% equity interest, from the non-controlling interest holder, of Shandong Buladun. As of December 31, 2019, the group paid consideration for this acquisition of $1,362 in cash. The transaction has not yet been completed as of December 31, 2021. |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Components of accrued expenses and other current liabilities | As of December 31, 2020 2021 Salary and welfare payable 29,862 31,539 Accrued expenses 9,534 9,511 Payables for purchase of property, plant and equipment 2,416 1,372 Payables for purchase of educational merchandise 4,351 4,841 Other tax payable 294 684 Acquisition consideration payable 613 628 Others 7,336 7,067 54,406 55,642 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
LEASES | |
Summary of total operating lease expenses | For the year ended December 31, 2021: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases 17,896 Right-of-use assets obtained in exchange for new lease obligations: 4,964 As of December 31, 2021: Weighted average remaining lease term 7.82 year Weighted average discount rate 7.66 % |
Summary of maturity analysis of the annual undiscounted cash flows | Years ending December 31, 2022 16,901 2023 17,822 2024 12,869 2025 11,140 2026 8,853 2027 and thereafter 37,811 Less: imputed interest 25,817 Total operating lease liabilities 79,579 Less: current operating lease liabilities 13,890 Non-current operating lease liabilities 65,689 |
SHARE INCENTIVE PLAN (Tables)
SHARE INCENTIVE PLAN (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SHARE INCENTIVE PLAN | |
Summary of stock option activity | Number Weighted Weighted average Weighted average Aggregate of options average grant-date remaining contractual intrinsic outstanding exercise price fair value per option term (years) value Options outstanding at January 1, 2021 4,556,458 6.16 3.43 5.36 2,175 Granted — — — — — Forfeited (26,300) 7.20 4.04 — — Options outstanding at December 31, 2021 4,530,158 6.15 3.43 4.29 2,846 Options expected to vest at December 31, 2021 4,530,158 6.15 3.43 4.29 2,846 Vested and exercisable at December 31, 2021 4,114,658 6.77 3.51 3.83 1,730 |
Schedule of fair value assumptions | As of December 31, Grant date 2020 Risk-free interest rate 0.86%-0.93 % Expected volatility 40 % Expected dividend yield — Exercise multiples 2.2 Fair value of underlying ordinary share 2.38~2.7 |
Summary of the nonvested shares activities | Number Weighted of nonvested shares average grant date Aggregate outstanding fair value intrinsic value Nonvested shares outstanding at January 1, 2021 582,876 6.21 1,381 Granted — — — Vested (223,180) 8.25 — Nonvested shares outstanding at December 31, 2021 359,696 4.94 712 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
Schedule of current and deferred components of the income tax expense | Years ended December 31, 2019 2020 2021 Current tax expense 6,010 3,438 4,726 Deferred tax benefit (2,469) (3,223) (1,286) 3,541 215 3,440 |
Schedule of principle components of deferred tax assets and deferred tax liabilities | Years ended December 31, 2020 2021 Deferred tax assets Accrued expenses 3,407 4,803 Net operating loss carry-forwards 24,223 22,788 Operating lease liabilities 22,397 19,209 Inventory write-down 50 42 Allowance for doubtful accounts receivables and other receivables 758 1,003 Allowance for loan receivables 366 360 Impairment of long-term investments 153 157 Impairment of long-lived assets other than intangible assets 113 61 Total deferred tax assets 51,467 48,423 Less: valuation allowance (9,646) (8,428) Total deferred tax assets, net 41,821 39,995 Deferred tax liabilities Acquired intangible assets, net 2,499 2,092 Operating lease right-of-use assets 20,044 16,848 Total deferred tax liabilities 22,543 18,940 Deferred income tax assets, net 21,168 22,803 Deferred tax liabilities, net 1,890 1,768 |
Summary of rollforward of valuation allowances of deferred tax assets | Years ended December 31 2020 2021 Balance as of beginning of year (2,859) (9,646) Additions of valuation allowance (6,234) 1,534 Foreign currency translation adjustments (553) (316) Balance as of end of year (9,646) (8,428) |
Schedule of reconciliation of the effective tax rate and statutory tax rate | Years ended December 31, 2019 2020 2021 Income (loss) before income taxes 2,015 (40,783) 6,984 Income tax expense computed at an applicable tax rate of 25% 504 (10,196) 1,746 Permanent differences 108 2,975 2,169 Effect of income tax rate difference in other jurisdictions 2,092 1,202 1,059 Change in valuation allowance 837 6,234 (1,534) 3,541 215 3,440 |
NET INCOME LOSS PER SHARE (Tabl
NET INCOME LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
NET INCOME/LOSS PER SHARE | |
Computation of basic and diluted net income (loss) per share | Years ended December 31, 2019 2020 2021 Numerator: Net (loss) income attributable to ordinary shareholders of RYB Education, Inc. for computing basic and diluted net (loss) income per ordinary share (2,434) (37,280) 6,790 Denominator: Weighted average ordinary shares outstanding used in computing basic net (loss) income per ordinary share 28,074,624 28,122,851 28,208,734 Effects of dilutive securities Options — — 700,715 Nonvested shares — — 53,031 Weighted average ordinary shares outstanding used in computing diluted net income per ordinary share 28,074,624 28,122,851 28,962,480 Net (loss) income per ordinary share-basic (0.09) (1.33) 0.24 Net (loss) income per ordinary share-diluted (0.09) (1.33) 0.23 |
Summary of shares outstanding excluded from the calculation of diluted net loss per ordinary share, as their inclusion would have been anti-dilutive for the periods presented | Years ended December 31, 2019 2020 2021 Share options 4,008,558 4,556,458 3,315,748 Nonvested shares 383,534 582,876 17,000 4,392,092 5,139,334 3,332,748 |
RELATED PARTY TRANSACTION (Tabl
RELATED PARTY TRANSACTION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
RELATED PARTY TRANSACTION | |
Schedule of transactions with related parties | (1) Related parties Name of related parties Relationship with the Group Ms. Zhiying Li Spouse of Mr. Chimin Cao, who is Chairman of the Board of Directors of the Company (2) The related party transactions are as follows: Years ended December 31, 2019 2020 2021 Rental expense recorded: Ms. Zhiying Li (i) 492 586 627 492 586 627 (i) The transactions with the related party shown above represent the office rental expenses recorded in each year. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of future minimum purchase obligations payments under non-cancelable purchase agreements | Years ending December 31, 2022 475 2023 340 2024 342 2025 122 2026 142 2027 and thereafter 2,562 3,983 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SEGMENT INFORMATION | |
Schedule of revenues, cost of revenues, and gross profits by segment | Years ended December 31, 2019 2020 2021 Net revenues: PRC kindergartens 131,427 68,319 128,402 PRC play-and-learn centers 24,901 12,215 13,254 Singapore kindergartens, student care centers and others 19,073 25,964 31,007 Others 6,882 3,217 7,650 Total net revenues 182,283 109,715 180,313 Cost of revenues: PRC kindergartens 113,315 78,901 106,566 PRC play-and-learn centers 14,269 8,610 8,634 Singapore kindergartens, student care centers and others 16,200 21,513 25,362 Others 11,750 7,877 8,580 Total cost of revenues 155,534 116,901 149,142 Gross profit (loss) PRC kindergartens 18,112 (10,582) 21,836 PRC play-and-learn centers 10,632 3,605 4,620 Singapore kindergartens, student care centers and others 2,873 4,451 5,645 Others (4,868) (4,660) (930) Total gross profit (loss) 26,749 (7,186) 31,171 |
Summary of Company's revenues and long lived assets by geographic areas | Years ended December 31, 2019 2020 2021 Net Revenues: PRC 163,210 83,751 149,306 Singapore 19,073 25,964 31,007 182,283 109,715 180,313 As of December 31, 2020 2021 Long-lived assets: PRC 128,206 102,769 Singapore 15,600 13,992 143,806 116,761 |
SUBSEQUENT EVENT (Tables)
SUBSEQUENT EVENT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SUBSEQUENT EVENT | |
Summarizes the consolidated financial position | As of December 31, 2021 Pro Forma Non Consolidated Divestiture Adjustment Divestiture ASSETS Current assets Cash and cash equivalents 65,263 31,892 — 33,371 Term deposits 215 215 — — Accounts receivable 1,300 27 — 1,273 Inventories 6,130 — — 6,130 Prepaid expenses and other current assets 9,344 6,409 — 2,935 Total current assets 82,252 38,543 — 43,709 Non-current assets Restricted cash 993 993 — — Property, plant and equipment, net 39,379 32,967 — 6,412 Goodwill 42,102 22,925 — 19,177 Intangible assets, net 12,737 1,638 — 11,099 Long-term investments 169 — — 169 Deferred tax assets 22,803 13,969 — 8,834 Other non-current assets 8,668 3,194 — 5,474 Operating lease right-of-use assets 73,973 49,581 — 24,392 Amounts due from related parties (for Divestiture) — — 22,576 22,576 Amounts due from related parties — — 44,664 44,664 TOTAL ASSETS 283,076 163,810 67,240 186,506 LIABILITIES Current liabilities Prepayments from customers, current portion 4,919 183 — 4,736 Accrued expenses and other current liabilities 55,642 32,337 — 23,305 Income tax payable 20,888 20,020 — 868 Operating lease liabilities, current portion 13,890 8,503 — 5,387 Deferred revenue, current portion 27,019 18,865 — 8,154 Long-term debt, current portion — — — — Amounts due to related parties — 44,664 44,664 — Total current liabilities 122,358 124,572 44,664 42,450 Non-current liabilities Prepayments from customers, non-current portion 1,461 540 — 921 Deferred revenue, non-current portion 999 — — 999 Other non-current liabilities 11,645 2,071 — 9,574 Deferred income tax liabilities 1,768 14 — 1,754 Operating lease liabilities, non-current portion 65,689 47,239 — 18,450 TOTAL LIABILITIES 203,920 174,436 44,664 74,148 NET ASSETS (LIABILITIES) 79,156 (10,626) 22,576 112,358 For the year ended December 31, 2021 Divestiture Non Consolidated Divestiture Adjustment Divestiture Net revenues 180,313 102,966 — 77,347 Cost of revenues 149,142 94,590 — 54,552 Gross profit 31,171 8,376 — 22,795 Selling expenses 2,491 1,291 — 1,200 General and administrative expenses 20,286 2,181 — 18,105 Impairment loss on goodwill 4,559 4,559 — — Total operating expenses 27,336 8,031 — 19,305 Operating income 3,835 345 — 3,490 Interest income 219 144 — 75 Government subsidy income 2,491 1,053 — 1,438 Gain (loss) on disposal of subsidiaries 439 459 — (20) Gain on divestiture — 34,068 34,068 Income before income taxes 6,984 2,001 34,068 39,051 Less: Income tax expenses 3,440 1,126 — 2,314 Income before loss from equity method investments 3,544 875 — 36,737 Loss from equity method investments (15) (8) — (7) Net income 3,529 867 34,068 36,730 |
ORGANIZATION AND BASIS OF PRE_3
ORGANIZATION AND BASIS OF PRESENTATION (Details) | Dec. 31, 2021 |
Beijing RYB Technology Development Co., Ltd ("RYB Technology") | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 100.00% |
QIYUAN Education Technology (Tianjin) Co., Ltd ("TJ Qiyuan") | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 100.00% |
Beijing Beilin International Education Co., Ltd. ("BJ Beilin") | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 90.00% |
Precious Companion Group Limited | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 100.00% |
Digital Knowledge World Co., Ltd. Islands | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 100.00% |
Digital Education Co., Ltd. | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 100.00% |
Beilin International Education Limited | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 100.00% |
Global Eduhub Pte Ltd | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 82.30% |
Global Edu (SG) Holding Pte Ltd | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 82.30% |
GEH | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 82.30% |
NASCANS Pte. Ltd | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 82.30% |
Mulberry Learning Centre International Pte Ltd | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 82.30% |
Mulberry Learning Centre @ Tanjong Pagar Pte Ltd | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 82.30% |
Alphabet Playhouse Childcare and Learning Centre Pte Ltd | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 82.30% |
Alphabet Playhouse @ East Coast Pte Ltd | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 82.30% |
Mulberry Learning Centre Alexandra Pte Ltd | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 82.30% |
Little Greenhouse @ Bukit Batok Pte Ltd | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 82.30% |
Little Greenhouse @ Sengkang Pte Ltd | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 82.30% |
Little Greenhouse @ S540 Pte Ltd | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 82.30% |
Little Greenhouse Childcare & Development Pte Ltd | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 82.30% |
Allegiance (Edu) Ptd Ltd | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 82.30% |
Little Greenhouse @ S553 Pte Ltd | |
Investments in and advances to affiliates | |
Percentage of legal ownership by the Company | 82.30% |
ORGANIZATION AND BASIS OF PRE_4
ORGANIZATION AND BASIS OF PRESENTATION - VIE arrangements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Exclusive Consultation and Service Agreement | |||
VIE arrangements | |||
Fees for consultation and service | $ 4,310 | $ 4,129 | $ 9,877 |
Exclusive Consultation and Service Agreement | Beijing RYB Technology Development Co., Ltd ("RYB Technology") | |||
VIE arrangements | |||
Term of agreement (in years) | 10 years | ||
Business Operation Agreement | Beijing RYB Technology Development Co., Ltd ("RYB Technology") | |||
VIE arrangements | |||
Term of agreement (in years) | 10 years | ||
Equity Disposal Agreement | |||
VIE arrangements | |||
Term of agreement (in years) | 10 years |
ORGANIZATION AND BASIS OF PRE_5
ORGANIZATION AND BASIS OF PRESENTATION - Concentration risk (Details) - VIE - Business operation concentration risk | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Total assets | ||
RESTRICTED NET ASSETS | ||
Percentage in the Group's consolidated financial position | 61.00% | 62.00% |
Total liabilities | ||
RESTRICTED NET ASSETS | ||
Percentage in the Group's consolidated financial position | 81.00% | 84.00% |
ORGANIZATION AND BASIS OF PRE_6
ORGANIZATION AND BASIS OF PRESENTATION - Financial information of Company's VIE and VIES's subsidiaries and kindergartens (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Financial information of the Company's VIE and VIE's subsidiaries and kindergartens | |||
Cash and cash equivalents | $ 65,263 | $ 53,454 | |
Prepaid expenses and other current assets | 9,344 | 8,927 | |
Total current assets | 82,252 | 70,105 | |
Total assets | 283,076 | 302,491 | |
Total current liabilities | 122,358 | 128,357 | |
Total liabilities | 203,920 | 224,824 | |
Net revenues | 180,313 | 109,715 | $ 182,283 |
Net income(loss) | 3,529 | (41,183) | (2,190) |
Net cash provided by (used in) operating activities | 19,230 | (6,526) | 12,982 |
Net cash used in (provided by) investing activities | (6,429) | (2,585) | (34,378) |
Net cash (used in) provided by financing activities | (1,397) | 556 | (13,454) |
VIE | |||
Financial information of the Company's VIE and VIE's subsidiaries and kindergartens | |||
Cash and cash equivalents | 32,964 | 21,111 | |
Prepaid expenses and other current assets | 8,219 | 7,378 | |
Total current assets | 47,171 | 35,314 | |
Total assets | 171,872 | 186,948 | |
Total current liabilities | 98,706 | 106,357 | |
Total liabilities | 165,956 | 188,123 | |
Net revenues | 142,005 | 80,107 | 162,644 |
Net income(loss) | 9,339 | (34,938) | 13,743 |
Net cash provided by (used in) operating activities | 14,041 | (12,007) | 14,691 |
Net cash used in (provided by) investing activities | (3,135) | (2,368) | (16,360) |
Net cash (used in) provided by financing activities | (820) | 460 | (1,457) |
Effects of exchange rate changes | $ 1,632 | (1,395) | $ (495) |
Asset pledged as collateral | VIE | |||
Financial information of the Company's VIE and VIE's subsidiaries and kindergartens | |||
Total assets | $ 0 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Property, plant and equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2020 | |
Allowance for doubtful accounts | ||||
Accumulated deficit | $ (65,559) | $ (71,837) | ||
Loan receivables | ||||
Allowance for loan losses recorded | $ 1,441 | 1,464 | $ 0 | |
Lessee, Operating Lease, Description | ||||
Remaining lease term | 1 year | |||
Lessee, Operating Lease, Option to Extend | expense | |||
Impairment of long-lived assets with definite lives | ||||
Impairment loss on property, plant, and equipment and operating lease right-of-use assets | $ 0 | 428 | 0 | |
Impairment losses on intangible assets with definite lives | 0 | 1,720 | 79 | |
Impairment of goodwill and indefinite-lived intangible assets | ||||
Impairment loss on goodwill | 4,559 | 8,454 | 337 | |
Impairment loss for indefinite-lived intangible assets | 0 | |||
Long-term investments | ||||
Impairment losses on equity method investments | 0 | 1,819 | 0 | |
Impairment losses on its available-for-sale debt securities | $ 0 | $ 613 | 0 | |
Minimum | ||||
Long-term investments | ||||
Voting stock, percentage | 20.00% | |||
Maximum | ||||
Long-term investments | ||||
Voting stock, percentage | 50.00% | |||
Cumulative effect adjustment | ||||
Allowance for doubtful accounts | ||||
Accumulated deficit | $ (412) | |||
Cumulative effect adjustment | ASU 2016-13 | ||||
Allowance for doubtful accounts | ||||
Accumulated deficit | $ 412 | |||
Buildings | ||||
Property, plant and equipment, net | ||||
Estimated useful life | 35 years | |||
Furniture, fixture and equipment | ||||
Property, plant and equipment, net | ||||
Estimated useful life | 5 years | |||
Motor Vehicles | ||||
Property, plant and equipment, net | ||||
Estimated useful life | 5 years |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Revenue recognition (Details) - Franchise fees | 12 Months Ended |
Dec. 31, 2021item | |
Franchising fees | |
Number of performance obligations | 2 |
Minimum | |
Franchising fees | |
Estimate of time required to set up kindergartens and play-and-learn centers (in months) | 7 months |
Maximum | |
Franchising fees | |
Estimate of time required to set up kindergartens and play-and-learn centers (in months) | 8 months |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Net revenues & Contract liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net revenues | |||
Net revenues | $ 180,313 | $ 109,715 | $ 182,283 |
Contract liabilities | |||
Prepayments from customers, current portion | 4,919 | 4,145 | |
Prepayments from customers, non-current portion | 1,461 | 4,024 | |
Deferred revenue, current portion | 27,019 | 34,351 | |
Deferred revenue, non-current portion | 999 | 1,726 | |
Revenue recognized related to contract liabilities that existed in previous year | 0 | 28,000 | |
Contract asset recorded | 0 | 0 | |
Services | |||
Net revenues | |||
Net revenues | 172,404 | 103,073 | 166,183 |
Tuition fees from kindergartens, play-and-learn centers and student care centers | |||
Net revenues | |||
Net revenues | 157,988 | 92,123 | 147,417 |
Franchise fees | |||
Net revenues | |||
Net revenues | 10,140 | 9,065 | 12,269 |
Training and other services | |||
Net revenues | |||
Net revenues | 4,096 | 1,632 | 6,156 |
Royalty fees | |||
Net revenues | |||
Net revenues | 180 | 253 | 341 |
Products | |||
Net revenues | |||
Net revenues | 7,909 | 6,642 | 16,100 |
Sale of educational merchandise | |||
Net revenues | |||
Net revenues | 7,909 | 6,642 | 16,100 |
PRC | |||
Net revenues | |||
Net revenues | 149,306 | 83,751 | 163,210 |
Singapore | |||
Net revenues | |||
Net revenues | 31,007 | 25,964 | 19,073 |
Kindergartens | PRC | |||
Net revenues | |||
Net revenues | 128,402 | 68,319 | 131,427 |
Play-and-learn centers | PRC | |||
Net revenues | |||
Net revenues | 13,254 | 12,215 | 24,901 |
Singapore kindergartens, student care centers and others | Singapore | |||
Net revenues | |||
Net revenues | 31,007 | 25,964 | 19,073 |
Others | |||
Net revenues | |||
Net revenues | $ 7,650 | $ 3,217 | $ 6,882 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - Value added taxes (Details) - USD ($) $ in Millions | 1 Months Ended | 2 Months Ended | 4 Months Ended | 10 Months Ended | 12 Months Ended | 20 Months Ended |
Apr. 30, 2019 | Feb. 28, 2021 | Apr. 30, 2018 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2019 | |
SIGNIFICANT ACCOUNTING POLICIES | ||||||
Value added tax rate on gross sales (in percent) | 13.00% | 17.00% | 16.00% | |||
Value added tax rate for general VAT payer (in percent) | 6.00% | |||||
Value added tax rate for small scale VAT payer (in percent) | 3.00% | 1.00% | ||||
GST rate | 7.00% | |||||
Minimum taxable turnover for the past 12 months for gst rate of 7% | $ 1 | |||||
Minimum taxable turnover in the next 12 months for gst rate of 7% | $ 1 |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES - Government subsidies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
SIGNIFICANT ACCOUNTING POLICIES | |||
Government subsidy income | $ 2,491 | $ 4,591 | $ 499 |
Government subsidy recognized as deduction of cost of revenues | $ 0 | $ 12,703 | $ 6,022 |
SIGNIFICANT ACCOUNTING POLICI_9
SIGNIFICANT ACCOUNTING POLICIES - Significant risks and uncertainties - Foreign currency risk (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Significant risks and uncertainties | ||
Cash and cash equivalents | $ 65,263 | $ 53,454 |
Currency Concentration Risk | Cash and cash equivalents, term deposit and restricted cash | RMB | ||
Significant risks and uncertainties | ||
Cash and cash equivalents | $ 0 | $ 23,263 |
Concentration risk, Percentage | 0.00% | 43.00% |
BUSINESS ACQUISITIONS - Acquisi
BUSINESS ACQUISITIONS - Acquisition in Shenzhen Ranlo (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 |
Intangible asset: | ||||
Goodwill | $ 42,102 | $ 46,147 | ||
Shenzhen Ranlo | ||||
BUSINESS ACQUISITIONS | ||||
Percentage of equity interest | 100.00% | |||
Consideration transferred | $ 5,985 | |||
Purchase price allocation of acquisitions | ||||
Cash and cash equivalents | 576 | |||
Other current assets | 789 | |||
Property, plant and equipment, net | 4,462 | |||
Operating lease right-of-use assets | 2,612 | |||
Intangible asset: | ||||
Other current liabilities | (477) | |||
Deferred tax liabilities | (36) | |||
Deferred revenue | (245) | |||
Operating lease liabilities | (2,612) | |||
Goodwill | 771 | |||
Total | 5,985 | |||
Net revenue | $ 1,716 | |||
Pre-tax net loss | $ 661 | |||
Shenzhen Ranlo | Student base | ||||
Purchase price allocation of acquisitions | ||||
Intangible assets: Student base | $ 145 | |||
Intangible asset: | ||||
Amortization period - intangible assets | 4 years | |||
Shenzhen Ranlo | Minimum | ||||
Purchase price allocation of acquisitions | ||||
Depreciation or amortization period | 5 years | |||
Shenzhen Ranlo | Maximum | ||||
Purchase price allocation of acquisitions | ||||
Depreciation or amortization period | 10 years |
BUSINESS ACQUISITIONS - Acqui_2
BUSINESS ACQUISITIONS - Acquisition in Global Eduhub Holding Limited (Details) - USD ($) $ in Thousands | Apr. 01, 2019 | Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 |
Purchase price allocation of acquisitions | ||||
Goodwill | $ 42,102 | $ 46,147 | ||
Redeemable non-controlling interests | $ 4,942 | $ 9,988 | ||
GEH | ||||
BUSINESS ACQUISITIONS | ||||
Percentage of equity interest | 77.00% | |||
Consideration transferred | $ 21,414 | |||
Purchase price allocation of acquisitions | ||||
Cash and cash equivalents | 663 | |||
Other current assets | 2,224 | |||
Property, plant and equipment, net | 2,920 | |||
Operating lease right-of-use assets | 5,924 | |||
Other current liabilities | (6,266) | |||
Deferred tax liabilities | (2,217) | |||
Operating lease liabilities | (6,062) | |||
Non-controlling interest | (6,895) | |||
Goodwill | 18,081 | |||
Total | 21,414 | |||
Net revenue | $ 19,193 | |||
Pre-tax net income | $ 1,310 | |||
Redeemable non-controlling interests | 6,895 | |||
GEH | Trademark | ||||
Purchase price allocation of acquisitions | ||||
Intangible assets | 7,766 | |||
GEH | Student base | ||||
Purchase price allocation of acquisitions | ||||
Intangible assets | $ 3,650 | |||
Amortization period - intangible assets | 5 years 8 months 1 day | |||
GEH | Initial franchise | ||||
Purchase price allocation of acquisitions | ||||
Intangible assets | $ 1,626 | |||
Amortization period - intangible assets | 3 years 9 months | |||
GEH | Minimum | ||||
Purchase price allocation of acquisitions | ||||
Depreciation or amortization period | 5 years | |||
GEH | Maximum | ||||
Purchase price allocation of acquisitions | ||||
Depreciation or amortization period | 10 years |
BUSINESS ACQUISITIONS - Acqui_3
BUSINESS ACQUISITIONS - Acquisition in Shanghai Geleli (Details) - USD ($) $ in Thousands | Jun. 04, 2019 | Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 |
Purchase price allocation of acquisitions | ||||
Goodwill | $ 42,102 | $ 46,147 | ||
Shanghai Geleli | ||||
BUSINESS ACQUISITIONS | ||||
Percentage of equity interest | 51.00% | |||
Consideration transferred | $ 5,310 | |||
Purchase price allocation of acquisitions | ||||
Cash and cash equivalents | 1,190 | |||
Other current assets | 611 | |||
Operating lease right-of-use assets | 64 | |||
Other current liabilities | (177) | |||
Deferred tax liabilities | (391) | |||
Operating lease liabilities | (64) | |||
Non-controlling interest | (4,050) | |||
Goodwill | 6,564 | |||
Total | 5,310 | |||
Net revenue | $ 1,088 | |||
Pre-tax net loss | $ 77 | |||
Shanghai Geleli | Brand | ||||
Purchase price allocation of acquisitions | ||||
Intangible assets | $ 1,129 | |||
Amortization period - intangible assets | 5 years | |||
Shanghai Geleli | Non-compete agreement | ||||
Purchase price allocation of acquisitions | ||||
Intangible assets | $ 347 | |||
Amortization period - intangible assets | 5 years | |||
Shanghai Geleli | Customer relationships | ||||
Purchase price allocation of acquisitions | ||||
Intangible assets | $ 87 | |||
Amortization period - intangible assets | 9 years 6 months |
BUSINESS ACQUISITIONS - Acqui_4
BUSINESS ACQUISITIONS - Acquisition in Beijing Xingqiba (Details) - USD ($) $ in Thousands | May 01, 2019 | Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 |
Purchase price allocation of acquisitions | ||||
Goodwill | $ 42,102 | $ 46,147 | ||
Beijing Xingqiba | ||||
BUSINESS ACQUISITIONS | ||||
Percentage of equity interest | 51.00% | |||
Consideration transferred | $ 1,297 | |||
Consideration payable | $ 0 | |||
Purchase price allocation of acquisitions | ||||
Cash and cash equivalents | 2 | |||
Other current assets | 20 | |||
Other current liabilities | (26) | |||
Deferred tax liabilities | (134) | |||
Non-controlling interest | (1,130) | |||
Goodwill | 2,030 | |||
Total | 1,297 | |||
Net revenue | $ 230 | |||
Pre-tax net loss | $ 343 | |||
Beijing Xingqiba | Software and courses | ||||
Purchase price allocation of acquisitions | ||||
Intangible assets | $ 208 | |||
Amortization period - intangible assets | 5 years | |||
Beijing Xingqiba | Non-compete agreement | ||||
Purchase price allocation of acquisitions | ||||
Intangible assets | $ 297 | |||
Amortization period - intangible assets | 6 years | |||
Beijing Xingqiba | Exclusive agent agreement | ||||
Purchase price allocation of acquisitions | ||||
Intangible assets | $ 30 | |||
Amortization period - intangible assets | 8 months 1 day |
BUSINESS ACQUISITIONS - Acqui_5
BUSINESS ACQUISITIONS - Acquisition in Mulberry Alexandra (Details) - USD ($) $ in Thousands | Nov. 01, 2019 | Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 |
Purchase price allocation of acquisitions | ||||
Goodwill | $ 42,102 | $ 46,147 | ||
Mulberry Alexandra | ||||
BUSINESS ACQUISITIONS | ||||
Percentage of equity interest | 100.00% | |||
Consideration transferred | $ 1,047 | |||
Purchase price allocation of acquisitions | ||||
Cash and cash equivalents | 283 | |||
Other current assets | 67 | |||
Property, plant and equipment, net | 91 | |||
Operating lease right-of-use assets | 557 | |||
Other current liabilities | (431) | |||
Deferred tax liabilities | (47) | |||
Operating lease liabilities | (557) | |||
Goodwill | 894 | |||
Total | 1,047 | |||
Net revenue | $ 236 | |||
Pre-tax net income | $ 70 | |||
Mulberry Alexandra | Student base | ||||
Purchase price allocation of acquisitions | ||||
Intangible assets: Student base | $ 190 | |||
Amortization period - intangible assets | 5 years 2 months 1 day | |||
Mulberry Alexandra | Minimum | ||||
Purchase price allocation of acquisitions | ||||
Depreciation or amortization period | 5 years | |||
Mulberry Alexandra | Maximum | ||||
Purchase price allocation of acquisitions | ||||
Depreciation or amortization period | 10 years |
BUSINESS ACQUISITIONS - Acqui_6
BUSINESS ACQUISITIONS - Acquisition in Shanghai Jinfeng Kindergarten (Details) - USD ($) | Nov. 01, 2021 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Purchase price allocation of acquisitions | ||||
Goodwill | $ 42,102,000 | $ 42,102,000 | $ 46,147,000 | |
Shanghai Jinfeng Kindergarten | ||||
Purchase price allocation of acquisitions | ||||
Non-controlling interest | $ 0 | |||
Fair value of the acquired net assets plus Percentage | 45.00% | |||
Shanghai Jinfeng Kindergarten | ||||
Business Acquisition [Line Items] | ||||
Percentage of equity interest | 55.00% | |||
Purchase price allocation of acquisitions | ||||
Cash and cash equivalents | $ 426,000 | |||
Other current assets | 162,000 | |||
Operating lease right-of-use assets | 4,326,000 | |||
Other current liabilities | 0 | |||
Deferred tax liabilities | 0 | |||
Operating lease liabilities | 0 | |||
Non-controlling interest | (480,000) | |||
Goodwill | 391,000 | |||
Additional paid in capital | (540,000) | |||
Total | $ 0 | |||
Depreciation or amortization period | 3 days 4 hours | |||
Net revenue | 0 | |||
Pre-tax net income | $ 225,000 | |||
Shanghai Jinfeng Kindergarten | Student base | ||||
Purchase price allocation of acquisitions | ||||
Intangible assets: Student base | $ 188,000 | |||
Shanghai Jinfeng Kindergarten | Minimum | ||||
Business Acquisition [Line Items] | ||||
Percentage of equity interest | 100.00% | |||
Shanghai Jinfeng Kindergarten | Maximum | ||||
Business Acquisition [Line Items] | ||||
Percentage of equity interest | 55.00% | |||
Shanghai Jinfeng Kindergarten | Shanghai Jinfeng Kindergarten | ||||
Purchase price allocation of acquisitions | ||||
Fair value of the acquired net assets plus Percentage | 45.00% |
CASH AND CASH EQUIVALENTS, AN_3
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH | ||||
Cash and cash equivalents | $ 65,263 | $ 53,454 | ||
Restricted cash | 993 | 1,127 | ||
Cash and cash equivalents, and restricted cash | $ 66,256 | $ 54,581 | $ 69,438 | $ 104,830 |
ACCOUNTS RECEIVABLE, NET (Detai
ACCOUNTS RECEIVABLE, NET (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
ACCOUNTS RECEIVABLE, NET | |||
Accounts receivable | $ 1,773 | $ 2,311 | |
Less: allowance for doubtful accounts | (473) | (467) | $ (92) |
Accounts receivable, net | $ 1,300 | $ 1,844 |
ACCOUNTS RECEIVABLE, NET - Move
ACCOUNTS RECEIVABLE, NET - Movement of allowance for doubtful accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Movement of allowance for doubtful accounts | ||
Balance at beginning of the year | $ 467 | $ 92 |
Addition | 30 | 15 |
Foreign currency adjustment | (24) | 17 |
Balance at end of the year | 473 | 467 |
Cumulative effect adjustment | ||
Movement of allowance for doubtful accounts | ||
Balance at beginning of the year | $ 343 | |
Balance at end of the year | $ 343 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
INVENTORIES | ||
Educational merchandise | $ 6,130 | $ 5,773 |
Inventory write-down | $ 166 | $ 199 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||
Prepaid service fees | $ 1,781 | $ 2,196 |
Prepaid rental expenses (1) | 935 | 637 |
Staff advances | 662 | 528 |
Prepayment for inventories and others | 283 | 368 |
Government subsidy receivables | 3,192 | 2,856 |
Receivables from the disposal of subsidiaries and investment (2) | 2,636 | 2,589 |
Receivables from third party payment platform | 331 | 306 |
Others | 2,411 | 2,325 |
Prepaid expenses and other current assets, gross | 12,231 | 11,805 |
Less: allowance for doubtful accounts | (2,887) | (2,878) |
Prepaid expenses and other current assets, Total | 9,344 | 8,927 |
Receivable from principle shareholder | $ 1,909 | $ 1,909 |
Percentage of valuation allowance for doubtful accounts | 100.00% | 100.00% |
LOAN RECEIVABLES (Details)
LOAN RECEIVABLES (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Sep. 30, 2021 | Aug. 31, 2018 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | May 21, 2018 | |
LOAN RECEIVABLES | ||||||
Loan receivables, net | $ 107 | |||||
Proceeds from repayments of receivables | $ 401 | 153 | ||||
Shanghai Peidi's minority shareholder | ||||||
LOAN RECEIVABLES | ||||||
Loan amount, non-current | $ 575 | |||||
Interest rate (as a percent) | 7.00% | |||||
Proceeds from repayments of receivables | $ 217 | 153 | ||||
Reversal of loan allowance | $ 109 | |||||
Equity interest put forth as repayment guarantee (as a percent) | 20.00% | |||||
Allowance for loan loss for loan receivables | 354 | |||||
Beijing Rui Le | ||||||
LOAN RECEIVABLES | ||||||
Loan receivables, net | $ 536 | |||||
Allowance for loan loss for loan receivables | 168 | |||||
Maturity term from the loan origination | 6 months | |||||
Loan agreement | Supplier | ||||||
LOAN RECEIVABLES | ||||||
Credit loss, current | $ 574 | $ 0 | ||||
Loan receivables, net | $ 574 | |||||
Proceeds from repayments of receivables | $ 155 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
PROPERTY, PLANT AND EQUIPMENT, NET | |||
Property plant and equipment, gross | $ 96,815 | $ 97,463 | |
Less: Accumulated depreciation | (57,248) | (49,428) | |
Impairment | (188) | (397) | |
Property, plant and equipment, net | 39,379 | 47,638 | |
Depreciation expenses | 10,555 | 9,239 | $ 9,296 |
Impairment loss on long-lived assets | 2,148 | ||
Impairment loss for property, plant and equipment | 0 | 374 | $ 0 |
Buildings | |||
PROPERTY, PLANT AND EQUIPMENT, NET | |||
Property plant and equipment, gross | 978 | 956 | |
Furniture, fixture and equipment | |||
PROPERTY, PLANT AND EQUIPMENT, NET | |||
Property plant and equipment, gross | 15,397 | 14,913 | |
Leasehold improvement | |||
PROPERTY, PLANT AND EQUIPMENT, NET | |||
Property plant and equipment, gross | 79,469 | 80,464 | |
Motor vehicles | |||
PROPERTY, PLANT AND EQUIPMENT, NET | |||
Property plant and equipment, gross | $ 971 | $ 1,130 |
GOODWILL (Details)
GOODWILL (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
GOODWILL | |||
Reporting unit | segment | 10 | ||
Costs: | |||
Beginning balance | $ 54,938 | $ 53,024 | |
Addition | 391 | 210 | |
Disposal | (796) | ||
Foreign currency adjustment | 1,440 | 1,704 | |
Ending balance | 55,973 | 54,938 | $ 53,024 |
Goodwill impairment loss | (13,871) | (8,791) | |
Goodwill, net | 42,102 | 46,147 | |
Impairment of goodwill | 4,559 | 8,454 | 337 |
Impairment loss for intangible assets | $ 0 | $ 1,720 | $ 79 |
GOODWILL - Key assumptions were
GOODWILL - Key assumptions were made in the discounted cash flow model to determine the fair value of each reporting unit (Details) | 3 Months Ended |
Dec. 31, 2021 | |
Reporting Units in PRC | |
Goodwill [Line Items] | |
WACC | 18.00% |
Income Tax Rate | 25.00% |
Terminal growth rate | 2.30% |
Forecasted inflation rate | 2.30% |
Reporting Units in PRC | Minimum | |
Goodwill [Line Items] | |
Revenue growth | 2.00% |
Reporting Units in PRC | Maximum | |
Goodwill [Line Items] | |
Revenue growth | 14.00% |
GEH | |
Goodwill [Line Items] | |
WACC | 14.00% |
Income Tax Rate | 17.00% |
Terminal growth rate | 2.00% |
Forecasted inflation rate | 2.00% |
GEH | Minimum | |
Goodwill [Line Items] | |
Revenue growth | 8.00% |
GEH | Maximum | |
Goodwill [Line Items] | |
Revenue growth | 12.00% |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
INTANGIBLE ASSETS, NET | |||
Intangible assets subject to amortization | $ 22,611 | $ 21,419 | |
Less: accumulated amortization | (7,923) | (5,334) | |
impairment | (1,951) | (1,906) | |
Total expected amortization expense | 4,971 | ||
Intangible assets, net | 12,737 | 14,179 | |
Amortization expenses | 2,493 | 2,431 | $ 2,224 |
Impairment loss for intangible assets | 0 | 1,720 | $ 79 |
Estimated amortization expenses | |||
2022 | 2,259 | ||
2023 | 1,213 | ||
2024 | 937 | ||
2025 | 112 | ||
2026 | 82 | ||
2027 and thereafter | 368 | ||
Total expected amortization expense | 4,971 | ||
Trademark | |||
INTANGIBLE ASSETS, NET | |||
Intangible assets subject to amortization | 2,298 | 1,551 | |
Student base | |||
INTANGIBLE ASSETS, NET | |||
Intangible assets subject to amortization | 8,213 | 7,939 | |
Initial franchise | |||
INTANGIBLE ASSETS, NET | |||
Intangible assets subject to amortization | 1,626 | 1,626 | |
Brand | |||
INTANGIBLE ASSETS, NET | |||
Intangible assets subject to amortization | 1,224 | 1,195 | |
Non-compete agreement | |||
INTANGIBLE ASSETS, NET | |||
Intangible assets subject to amortization | 690 | 674 | |
Customer relationships | |||
INTANGIBLE ASSETS, NET | |||
Intangible assets subject to amortization | 94 | 92 | |
Software and courses | |||
INTANGIBLE ASSETS, NET | |||
Intangible assets subject to amortization | 669 | 545 | |
Contracts | |||
INTANGIBLE ASSETS, NET | |||
Intangible assets subject to amortization | 31 | 31 | |
Trademark | |||
INTANGIBLE ASSETS, NET | |||
Intangible assets not subject to amortization | $ 7,766 | $ 7,766 |
LONG-TERM INVESTMENTS - Equity
LONG-TERM INVESTMENTS - Equity method investments (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2020USD ($) | Nov. 30, 2018USD ($)director | Sep. 30, 2016USD ($)director | Apr. 30, 2016USD ($)director | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | May 19, 2021 | Aug. 31, 2020USD ($) | |
Equity method investments | |||||||||
Impairment loss on long-term investments | $ 1,819 | $ 2,432 | |||||||
Receivables from principle shareholder | $ 1,909 | ||||||||
Recognized share of loss | $ 15 | 185 | $ 664 | ||||||
Hainan RYB | |||||||||
Equity method investments | |||||||||
Equity method investments, cash consideration invested | $ 231 | ||||||||
Equity interest acquired | 51.00% | ||||||||
Number of seats held on the board of directors | director | 3 | ||||||||
Total board of director seats | director | 5 | ||||||||
Seven Children | |||||||||
Equity method investments | |||||||||
Equity method investments, cash consideration invested | $ 301 | ||||||||
Equity interest acquired | 16.00% | ||||||||
Number of seats held on the board of directors | director | 1 | ||||||||
Total board of director seats | director | 3 | ||||||||
Beijing Da Ai | |||||||||
Equity method investments | |||||||||
Equity method investments, cash consideration invested | $ 4,400 | ||||||||
Equity interest acquired | 19.00% | ||||||||
Number of seats held on the board of directors | director | 1 | ||||||||
Total board of director seats | director | 3 | ||||||||
Recognized share of loss | $ 15 | $ 185 | $ 664 | ||||||
Shanghai Golden Apple International Jesisland Kindergarten | |||||||||
Equity method investments | |||||||||
Equity interest acquired | 49.00% | ||||||||
Shanghai Golden Apple International Jesisland Kindergarten | Golden Apple | |||||||||
Equity method investments | |||||||||
Equity interest acquired | 51.00% |
LONG-TERM INVESTMENTS - Availab
LONG-TERM INVESTMENTS - Available-for-sale securities (Details) - USD ($) $ in Thousands | Jul. 02, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
AVAILABLE-FOR-SALE SECURITY | ||||
Impairment loss | $ 0 | $ 613 | $ 0 | |
Beijing Borderless | ||||
AVAILABLE-FOR-SALE SECURITY | ||||
Equity interest acquired | 16.00% | |||
Beijing Rui Le | ||||
AVAILABLE-FOR-SALE SECURITY | ||||
Equity method investments, cash consideration | $ 575 | |||
Impairment loss | $ 613 |
OTHER NON-CURRENT ASSETS (Detai
OTHER NON-CURRENT ASSETS (Details) - USD ($) $ in Thousands | Sep. 06, 2019 | Jun. 21, 2019 | Dec. 31, 2021 | Dec. 31, 2020 |
OTHER NON-CURRENT ASSETS | ||||
Rental deposits | $ 5,428 | $ 5,964 | ||
Prepayment for investments | 2,197 | 6,017 | ||
Prepayment for property, plant and equipment | 927 | 1,943 | ||
Others | 116 | 514 | ||
Other non-current assets | $ 8,668 | 14,438 | ||
Loan receivables, net | $ 107 | |||
Shandong Buladun | ||||
OTHER NON-CURRENT ASSETS | ||||
Ownership percentage | 10.00% | |||
Equity method investments, cash consideration invested | $ 1,362 | |||
Digital Knowledge World Co., Ltd. Islands | ||||
OTHER NON-CURRENT ASSETS | ||||
Ownership percentage | 10.00% | |||
Equity method investments, cash consideration invested | $ 4,636 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Salary and welfare payable | $ 31,539 | $ 29,862 |
Accrued expenses | 9,511 | 9,534 |
Payables for purchase of property, plant and equipment | 1,372 | 2,416 |
Payables for purchase of educational merchandise | 4,841 | 4,351 |
Other tax payable | 684 | 294 |
Acquisition consideration payable | 628 | 613 |
Others | 7,067 | 7,336 |
Total accrued expenses and other current liabilities | $ 55,642 | $ 54,406 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
LEASES | ||
Total operating lease expenses | $ 0 | $ 15,634 |
Short term lease expenses | 1,234 | 1,219 |
Impairment loss for operating lease right-of-use assets | 0 | $ 54 |
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases | 17,896 | |
Right-of-use assets obtained in exchange for new lease obligations: | $ 4,964 | |
Weighted average remaining lease term | 7 years 9 months 25 days | |
Weighted average discount rate | 7.66% |
LEASES - Maturity analysis of t
LEASES - Maturity analysis of the annual undiscounted cash flows (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Maturity analysis of the annual undiscounted cash flows | ||
2022 | $ 16,901 | |
2023 | 17,822 | |
2024 | 12,869 | |
2025 | 11,140 | |
2026 | 8,853 | |
2027 and thereafter | 37,811 | |
Less imputed interest | 25,817 | |
Total operating lease liabilities | 79,579 | |
Less: current operating lease liabilities | 13,890 | $ 16,856 |
Non-current operating lease liabilities | $ 65,689 | $ 76,308 |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
FAIR VALUE MEASUREMENT | |||
Impairment loss on intangible assets | $ 0 | $ 1,720 | $ 79 |
Impairment loss on intangible assets and goodwill | 4,559 | 8,454 | 337 |
Impairment loss on property, plant, and equipment and operating lease right-of-use assets | 0 | 428 | 0 |
Impairment loss on long-term equity method investment | 0 | 1,819 | 0 |
Impairment losses on its available-for-sale debt securities | $ 0 | $ 613 | $ 0 |
ORDINARY SHARES (Details)
ORDINARY SHARES (Details) $ / shares in Units, $ in Thousands | Aug. 30, 2017Vote | Nov. 05, 2015USD ($)shares | Sep. 30, 2017USD ($)$ / sharesshares | Dec. 31, 2021$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2017USD ($) | Dec. 18, 2018USD ($) | Nov. 24, 2017USD ($) |
ORDINARY SHARES | ||||||||
Ordinary shares, shares authorized (in shares) | 990,000,000 | 990,000,000 | ||||||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||||||
Issuance cost, net | $ | $ 4,492 | |||||||
Payment of initial public offering costs | $ | $ 3,073 | |||||||
Ordinary shares, shares issued (in shares) | 29,213,801 | 29,213,801 | ||||||
Ordinary shares, shares outstanding (in shares) | 28,035,934 | 27,812,754 | ||||||
Number of share repurchased | 1,627,455 | |||||||
Total consideration | $ | $ 12,000 | |||||||
Re-issuance of repurchased shares for settlement of restricted shares vested | 449,588 | 226,408 | ||||||
Minimum | ||||||||
ORDINARY SHARES | ||||||||
Price per share | $ / shares | $ 6.50 | |||||||
Maximum | ||||||||
ORDINARY SHARES | ||||||||
Price per share | $ / shares | $ 8 | |||||||
Class A Ordinary Shares | ||||||||
ORDINARY SHARES | ||||||||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.001 | |||||||
Conversion of ordinary shares | 10,115,854 | 3,253,870 | ||||||
Ordinary shares issued (in shares) | 5,500,000 | |||||||
Number of votes each share is entitled | Vote | 1 | |||||||
Proceeds from initial public offering | $ | $ 94,627 | |||||||
Conversion ratio of ordinary shares | 1 | 1 | ||||||
Ordinary shares, shares issued (in shares) | 22,264,660 | |||||||
Ordinary shares, shares outstanding (in shares) | 21,086,793 | |||||||
Class B Ordinary Shares | ||||||||
ORDINARY SHARES | ||||||||
Conversion of ordinary shares | 9,352,676 | |||||||
Number of votes each share is entitled | Vote | 10 | |||||||
Conversion ratio of ordinary shares | 1 | |||||||
Ordinary shares, shares issued (in shares) | 6,949,141 | |||||||
Ordinary shares, shares outstanding (in shares) | 6,949,141 | |||||||
Class B Ordinary Shares | RYB Education Limited | ||||||||
ORDINARY SHARES | ||||||||
Ordinary shares issued (in shares) | 13,047,947 | |||||||
Total proceeds from issuance of ordinary shares | $ | $ 50,224 | |||||||
ADR | ||||||||
ORDINARY SHARES | ||||||||
Share repurchase program, authorized amount | $ | $ 12,000 | $ 50,000 |
SHARE INCENTIVE PLAN (Details)
SHARE INCENTIVE PLAN (Details) $ / shares in Units, $ in Thousands | Apr. 02, 2018item$ / sharesshares | Jul. 01, 2017$ / sharesshares | Jun. 22, 2017item$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / shares | Dec. 31, 2019USD ($) |
SHARE INCENTIVE PLAN | ||||||
Ordinary shares, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||||
Weighted average grant date fair value of options granted | $ 2.69 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ | $ 1,910 | $ 2,990 | $ 3,320 | |||
Total intrinsic value of options exercised | $ | 0 | 0 | 0 | |||
Total fair value of nonvested shares vested | $ | $ 656 | $ 403 | $ 669 | |||
Vested and exercisable upon 1st anniversary year | ||||||
SHARE INCENTIVE PLAN | ||||||
Vesting of share-based compensation (as a percent) | 25.00% | |||||
Vested quarterly in twelve quarters with equal quarterly installments | ||||||
SHARE INCENTIVE PLAN | ||||||
Vesting of share-based compensation (as a percent) | 75.00% | |||||
Board of Directors | ||||||
SHARE INCENTIVE PLAN | ||||||
Share options granted (in shares) | shares | 1,286,878 | |||||
Exercise price per share of the options granted | $ 11.66 | |||||
Employees | ||||||
SHARE INCENTIVE PLAN | ||||||
Share options granted (in shares) | shares | 20,000 | 554,000 | ||||
Exercise price per share of the options granted | $ 0.01 | $ 0.001 | ||||
Vesting of share-based compensation (as a percent) | 25.00% | |||||
Shares vesting quarterly in twelve quarters (as a percent) | 75.00% | |||||
Number of quarters of vesting | item | 12 | |||||
Contract term | 10 years | |||||
Director and consultant | ||||||
SHARE INCENTIVE PLAN | ||||||
Share options granted (in shares) | shares | 50,300 | |||||
Exercise price per share of the options granted | $ 1.48 | |||||
Completion of IPO before June 22, 2018 | Board of Directors | ||||||
SHARE INCENTIVE PLAN | ||||||
Vesting of share-based compensation (as a percent) | 25.00% | |||||
Shares vesting quarterly in twelve quarters (as a percent) | 75.00% | |||||
Number of quarters of vesting | item | 12 | |||||
Non completion of IPO before June 22, 2018 | Board of Directors | ||||||
SHARE INCENTIVE PLAN | ||||||
Vesting of share-based compensation (as a percent) | 25.00% | |||||
Shares vesting quarterly in twelve quarters (as a percent) | 75.00% | |||||
Number of quarters of vesting | item | 12 | |||||
Completion of IPO on September 27, 2018 | Employees | ||||||
SHARE INCENTIVE PLAN | ||||||
Share options granted (in shares) | shares | 772,127 | |||||
Exercise price per share of the options granted | $ 11.66 | |||||
Vesting of share-based compensation (as a percent) | 25.00% | |||||
Shares vesting quarterly in twelve quarters (as a percent) | 75.00% | |||||
Number of quarters of vesting | item | 12 | |||||
2009 Share Incentive Plan | ||||||
SHARE INCENTIVE PLAN | ||||||
Total number shares authorized | shares | 2,573,756 | |||||
Ordinary shares, par value (in dollars per share) | $ 0.001 | |||||
2017 Share Incentive Plan | ||||||
SHARE INCENTIVE PLAN | ||||||
Total number shares authorized | shares | 2,059,005 | |||||
Additional annual increase in number of shares (as a percent) | 2.00% |
SHARE INCENTIVE PLAN - Share op
SHARE INCENTIVE PLAN - Share option activities (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Number of options outstanding | ||
Outstanding at beginning of year | 4,556,458 | |
Forfeited | (26,300) | |
Outstanding at end of year | 4,530,158 | 4,556,458 |
Vested and expected to vest | 4,530,158 | |
Exercisable at end of year | 4,114,658 | |
Weighted average exercise price | ||
Outstanding at beginning of year | $ 6.16 | |
Forfeited | 7.20 | |
Outstanding at end of year | 6.15 | $ 6.16 |
Vested and expected to vest | 6.15 | |
Exercisable at end of the year | 6.77 | |
Weighted average grant-date fair value per option | ||
Outstanding at beginning of year | 3.43 | |
Forfeited | 4.04 | |
Outstanding at end of year | 3.43 | $ 3.43 |
Vested and expected to vest | 3.43 | |
Exercisable at end of the year | $ 3.51 | |
Weighted-average remaining contractual term (years) | ||
Weighted-average remaining contractual term (in years) | 4 years 3 months 14 days | 5 years 4 months 9 days |
Vested and expected to vest | 4 years 3 months 14 days | |
Weighted-average remaining contractual term, exercisable at end of the year (in years) | 3 years 9 months 29 days | |
Aggregate intrinsic value | ||
Aggregate intrinsic value | $ 2,846 | $ 2,175 |
Vested and expected to vest | 2,846 | |
Aggregate intrinsic value, exercisable at end of the year | $ 1,730 |
SHARE INCENTIVE PLAN - Share-ba
SHARE INCENTIVE PLAN - Share-based compensation expenses (Details) - Share options - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
SHARE INCENTIVE PLAN | |||
Share-based compensation recognized | $ 924 | $ 1,198 | $ 2,069 |
Total unrecognized compensation expenses relating to unvested share options | $ 544 | ||
Weighted average period | 1 year 9 months 7 days |
SHARE INCENTIVE PLAN - Fair val
SHARE INCENTIVE PLAN - Fair value of the options granted, assumptions used (Details) | 12 Months Ended |
Dec. 31, 2020multiple$ / shares | |
Assumptions used | |
Expected volatility | 40.00% |
Exercise multiples | multiple | 2.2 |
Minimum | |
Assumptions used | |
Risk-free interest rate | 0.86% |
Fair value of underlying ordinary share | $ 2.38 |
Maximum | |
Assumptions used | |
Risk-free interest rate | 0.93% |
Fair value of underlying ordinary share | $ 2.7 |
SHARE INCENTIVE PLAN - Nonveste
SHARE INCENTIVE PLAN - Nonvested Shares (Details) - Nonvested shares $ / shares in Units, $ in Thousands | Aug. 27, 2020USD ($)itemdirector$ / sharesshares | Dec. 04, 2019USD ($)item$ / sharesshares | Aug. 20, 2019USD ($)directoritem$ / sharesshares | Jul. 29, 2019USD ($)item$ / sharesshares | Oct. 24, 2018USD ($)item$ / sharesshares | Mar. 14, 2018USD ($)directoritem$ / sharesshares | Mar. 04, 2018 | Dec. 31, 2021USD ($)$ / shares | Dec. 31, 2020USD ($)$ / shares | Dec. 31, 2019USD ($) |
SHARE INCENTIVE PLAN | ||||||||||
Grant date fair value | $ / shares | $ 4.94 | $ 6.21 | ||||||||
Share-based compensation recognized | $ | $ 1,097 | $ 1,732 | $ 1,893 | |||||||
Total unrecognized compensation expenses relating to unvested nonvested shares expected to be recognized over weighted average period | 1 year 5 months 12 days | |||||||||
Employee one | ||||||||||
SHARE INCENTIVE PLAN | ||||||||||
Shares granted | shares | 8,388 | |||||||||
Vesting of share-based compensation (as a percent) | 25.00% | |||||||||
Shares vesting quarterly in twelve quarters (as a percent) | 75.00% | |||||||||
Number of quarters of vesting | item | 12 | |||||||||
Grant date fair value | $ / shares | $ 6.06 | |||||||||
Share-based compensation recognized | $ | $ 51 | |||||||||
Requisite service period | 4 years | |||||||||
Two directors and executive officers | ||||||||||
SHARE INCENTIVE PLAN | ||||||||||
Shares granted | shares | 333,750 | |||||||||
Number of directors and executive officers | director | 3 | |||||||||
Vesting of share-based compensation (as a percent) | 25.00% | |||||||||
Shares vesting quarterly in twelve quarters (as a percent) | 75.00% | |||||||||
Number of quarters of vesting | item | 12 | |||||||||
Grant date fair value | $ / shares | $ 3.03 | |||||||||
Share-based compensation recognized | $ | $ 1,011 | |||||||||
Requisite service period | 4 years | |||||||||
Employee two | ||||||||||
SHARE INCENTIVE PLAN | ||||||||||
Shares granted | shares | 9,146 | 240,000 | ||||||||
Number of directors and executive officers | director | 2 | |||||||||
Vesting of share-based compensation (as a percent) | 25.00% | 25.00% | ||||||||
Shares vesting quarterly in twelve quarters (as a percent) | 75.00% | 75.00% | ||||||||
Number of quarters of vesting | item | 12 | 12 | ||||||||
Grant date fair value | $ / shares | $ 5.55 | $ 6.69 | ||||||||
Share-based compensation recognized | $ | $ 51 | $ 1,606 | ||||||||
Requisite service period | 4 years | 4 years | ||||||||
Directors and executive officers | ||||||||||
SHARE INCENTIVE PLAN | ||||||||||
Shares granted | shares | 200,000 | |||||||||
Number of directors and executive officers | director | 3 | |||||||||
Vesting of share-based compensation (as a percent) | 25.00% | |||||||||
Shares vesting quarterly in twelve quarters (as a percent) | 75.00% | |||||||||
Number of quarters of vesting | item | 12 | |||||||||
Grant date fair value | $ / shares | $ 20.43 | |||||||||
Share-based compensation recognized | $ | $ 4,086 | |||||||||
Requisite service period | 4 years | |||||||||
Non-employees | ||||||||||
SHARE INCENTIVE PLAN | ||||||||||
Shares granted | shares | 18,000 | |||||||||
Vesting of share-based compensation (as a percent) | 25.00% | |||||||||
Shares vesting quarterly in twelve quarters (as a percent) | 75.00% | |||||||||
Number of quarters of vesting | item | 12 | |||||||||
Grant date fair value | $ / shares | $ 17.11 | |||||||||
Share-based compensation recognized | $ | $ 308 | |||||||||
Requisite service period | 4 years |
SHARE INCENTIVE PLAN - Summary
SHARE INCENTIVE PLAN - Summary of nonvested shares (Details) - Nonvested shares - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of nonvested shares outstanding | |||
Nonvested shares outstanding at the beginning | 582,876 | ||
Vested | (223,180) | ||
Nonvested shares outstanding at the end | 359,696 | 582,876 | |
Weighted average grant date fair value | |||
Outstanding at beginning of year | $ 6.21 | ||
Granted | $ 3.03 | $ 6.63 | |
Vested | 8.25 | ||
Outstanding at end of year | $ 4.94 | $ 6.21 | |
Aggregate intrinsic value | $ 712 | $ 1,381 | |
Share-based compensation expenses relating to nonvested shares | 1,097 | $ 1,732 | $ 1,893 |
Total unrecognized compensation expenses relating to unvested nonvested shares | $ 513 | ||
Total unrecognized compensation expenses relating to unvested nonvested shares expected to be recognized over weighted average period | 1 year 5 months 12 days |
INCOME TAXES (Details)
INCOME TAXES (Details) $ in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2021USD ($) | Dec. 31, 2021SGD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Income taxes | |||||
Unified income tax rate | 25.00% | 25.00% | |||
Current and deferred components of the income tax expense | |||||
Current tax expense | $ 4,726 | $ 3,438 | $ 6,010 | ||
Deferred tax benefit | (1,286) | (3,223) | (2,469) | ||
Income tax expense net | 3,440 | 215 | 3,541 | ||
Deferred tax assets | |||||
Accrued expenses | 4,803 | 3,407 | |||
Net operating loss carry-forwards | 22,788 | 24,223 | |||
Operating lease liabilities | 19,209 | 22,397 | |||
Inventory write-down | 42 | 50 | |||
Allowance for doubtful accounts receivables and other receivables | 1,003 | 758 | |||
Allowance for loan receivables | 360 | 366 | |||
Impairment of long-term investments | 157 | 153 | |||
Impairment of long-lived assets other than intangible assets | 61 | 113 | |||
Total deferred tax assets | 48,423 | 51,467 | |||
Less: valuation allowance | (8,428) | (9,646) | (2,859) | ||
Deferred tax assets, net | 39,995 | 41,821 | |||
Deferred tax liabilities | |||||
Acquired intangible assets, net | 2,092 | 2,499 | |||
Operating lease right-of-use assets | 16,848 | 20,044 | |||
Total deferred tax liabilities | 18,940 | 22,543 | |||
Deferred income tax assets, net | 22,803 | 21,168 | |||
Deferred income tax liabilities | 1,768 | 1,890 | |||
Balance as of beginning of year | (9,646) | (2,859) | |||
Additions of valuation allowance | 1,534 | (6,234) | |||
Foreign currency translation adjustments | (316) | (553) | |||
Balance as of end of year | (8,428) | (9,646) | (2,859) | ||
Net operating loss carried forward | 90,123 | ||||
Reconciliation of the effective tax rate and the statutory income tax rate | |||||
Income (loss) before income taxes | 6,984 | (40,783) | 2,015 | ||
Income tax expense computed at an applicable tax rate of 25% | 1,746 | (10,196) | 504 | ||
Permanent differences | 2,169 | 2,975 | 108 | ||
Effect of income tax rate difference in other jurisdictions | 1,059 | 1,202 | 2,092 | ||
Change in valuation allowance | (1,534) | 6,234 | 837 | ||
Income tax expense net | $ 3,440 | $ 215 | $ 3,541 | ||
Withholding tax (as a percent) | 10.00% | 10.00% | |||
Deferred tax liabilities accrued for the Chinese dividend withholding taxes | $ 0 | ||||
2022 | |||||
Deferred tax liabilities | |||||
Net operating loss carried forward | 9,829 | ||||
2023 | |||||
Deferred tax liabilities | |||||
Net operating loss carried forward | 15,654 | ||||
2024 | |||||
Deferred tax liabilities | |||||
Net operating loss carried forward | 11,650 | ||||
2025 | |||||
Deferred tax liabilities | |||||
Net operating loss carried forward | 37,883 | ||||
2026 | |||||
Deferred tax liabilities | |||||
Net operating loss carried forward | $ 15,107 | ||||
Hong Kong | Assessable profits of HK$2 million | |||||
Income taxes | |||||
Profits tax rate (as a percent) | 8.25% | 8.25% | 8.25% | 8.25% | 8.25% |
Hong Kong | Assessable profits in excess of HK$2 Million | |||||
Income taxes | |||||
Profits tax rate (as a percent) | 16.50% | 16.50% | 16.50% | 16.50% | 16.50% |
Singapore | |||||
Income taxes | |||||
Unified income tax rate | 17.00% | 17.00% | |||
Singapore | Tax Exempted for First SGD$10K | |||||
Income taxes | |||||
Exempted tax amount | $ 10 | ||||
Exempted tax percentage | 75.00% | 75.00% | |||
Singapore | Tax Exempted for Next SGD$190K | |||||
Income taxes | |||||
Exempted tax amount | $ 190 | ||||
Exempted tax percentage | 50.00% | 50.00% |
EMPLOYEE DEFINED CONTRIBUTION_2
EMPLOYEE DEFINED CONTRIBUTION PLAN (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
EMPLOYEE DEFINED CONTRIBUTION PLAN | |||
Amounts of employee benefits expensed as incurred | $ 11,698 | $ 9,136 | $ 13,041 |
Exempted contributions to basic pension insurance, unemployment insurance, and work injury insurance | $ 3,491 |
NET INCOME LOSS PER SHARE - Bas
NET INCOME LOSS PER SHARE - Basic and diluted net loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | |||
Net (loss) income attributable to ordinary shareholders of RYB Education, Inc. for computing basic and diluted net (loss) income per ordinary share | $ 6,790 | $ (37,280) | $ (2,434) |
Net loss attributable to ordinary shareholders of RYB Education, Inc. for computing diluted net loss per ordinary share | $ 0 | $ (37,280) | $ (2,434) |
Denominator: | |||
Weighted average ordinary shares outstanding used in computing basic net (loss) per ordinary share | 28,208,734 | 28,122,851 | 28,074,624 |
Weighted average ordinary shares outstanding used in computing diluted net income per ordinary share | 28,962,480 | 28,122,851 | 28,074,624 |
Net (loss) income per ordinary share-basic | $ 0.24 | $ (1.33) | $ (0.09) |
Net (loss) income per ordinary share-diluted | $ 0.23 | $ (1.33) | $ (0.09) |
Share options | |||
Effect of dilutive securities | |||
Weighted average ordinary shares from assumed conversions of options and nonvested shares using the treasury stock method | 700,715 | ||
Nonvested shares | |||
Effect of dilutive securities | |||
Weighted average ordinary shares from assumed conversions of options and nonvested shares using the treasury stock method | 53,031 |
NET LOSS PER SHARE - Shares out
NET LOSS PER SHARE - Shares outstanding were excluded from the calculation of diluted net loss per ordinary share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive securities excluded from computation of earnings per share | |||
Shares outstanding excluded from calculation of diluted net loss per ordinary share | 3,332,748 | 5,139,334 | 4,392,092 |
Share options | |||
Antidilutive securities excluded from computation of earnings per share | |||
Shares outstanding excluded from calculation of diluted net loss per ordinary share | 3,315,748 | 4,556,458 | 4,008,558 |
Nonvested shares | |||
Antidilutive securities excluded from computation of earnings per share | |||
Shares outstanding excluded from calculation of diluted net loss per ordinary share | 17,000 | 582,876 | 383,534 |
RELATED PARTY TRANSACTION (Deta
RELATED PARTY TRANSACTION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
RELATED PARTY TRANSACTION | |||
Rental expense recorded: | $ 627 | $ 586 | $ 492 |
Ms. Zhiying Li | |||
RELATED PARTY TRANSACTION | |||
Rental expense recorded: | $ 627 | $ 586 | $ 492 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Purchase commitments (Details) $ in Thousands | Dec. 31, 2021USD ($) |
COMMITMENTS AND CONTINGENCIES | |
2022 | $ 475 |
2023 | 340 |
2024 | 342 |
2025 | 122 |
2026 | 142 |
2027 and thereafter | 2,562 |
Total | $ 3,983 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES | |||
Revenue | $ 180,313 | $ 109,715 | $ 182,283 |
VIE's Kindergartens | |||
COMMITMENTS AND CONTINGENCIES | |||
Revenue | $ 0 | $ 6,110 | $ 9,559 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($)segment | Dec. 31, 2019USD ($)segment | |
Segment Reporting Information | |||
Number of operating segments | segment | 4 | 4 | 4 |
Net revenues: | |||
Net revenues | $ 180,313 | $ 109,715 | $ 182,283 |
Cost of revenues: | |||
Total cost of revenues | 149,142 | 116,901 | 155,534 |
Gross profit (loss) | |||
Total gross profit (loss) | 31,171 | (7,186) | 26,749 |
Others | |||
Net revenues: | |||
Net revenues | 7,650 | 3,217 | 6,882 |
PRC | |||
Net revenues: | |||
Net revenues | 149,306 | 83,751 | 163,210 |
PRC | Kindergartens | |||
Net revenues: | |||
Net revenues | 128,402 | 68,319 | 131,427 |
PRC | Play-and-learn centers | |||
Net revenues: | |||
Net revenues | 13,254 | 12,215 | 24,901 |
Singapore | |||
Net revenues: | |||
Net revenues | 31,007 | 25,964 | 19,073 |
Singapore | Singapore kindergartens, student care centers and others | |||
Net revenues: | |||
Net revenues | 31,007 | 25,964 | 19,073 |
Operating segments | |||
Net revenues: | |||
Net revenues | 180,313 | 109,715 | 182,283 |
Cost of revenues: | |||
Total cost of revenues | 149,142 | 116,901 | 155,534 |
Gross profit (loss) | |||
Total gross profit (loss) | 31,171 | (7,186) | 26,749 |
Operating segments | Others | |||
Net revenues: | |||
Net revenues | 7,650 | 3,217 | 6,882 |
Cost of revenues: | |||
Total cost of revenues | 8,580 | 7,877 | 11,750 |
Gross profit (loss) | |||
Total gross profit (loss) | (930) | (4,660) | (4,868) |
Operating segments | PRC | Kindergartens | |||
Net revenues: | |||
Net revenues | 128,402 | 68,319 | 131,427 |
Cost of revenues: | |||
Total cost of revenues | 106,566 | 78,901 | 113,315 |
Gross profit (loss) | |||
Total gross profit (loss) | 21,836 | (10,582) | 18,112 |
Operating segments | PRC | Play-and-learn centers | |||
Net revenues: | |||
Net revenues | 13,254 | 12,215 | 24,901 |
Cost of revenues: | |||
Total cost of revenues | 8,634 | 8,610 | 14,269 |
Gross profit (loss) | |||
Total gross profit (loss) | 4,620 | 3,605 | 10,632 |
Operating segments | Singapore | Singapore kindergartens, student care centers and others | |||
Net revenues: | |||
Net revenues | 31,007 | 25,964 | 19,073 |
Cost of revenues: | |||
Total cost of revenues | 25,362 | 21,513 | 16,200 |
Gross profit (loss) | |||
Total gross profit (loss) | $ 5,645 | $ 4,451 | $ 2,873 |
SEGMENT INFORMATION - Schedule
SEGMENT INFORMATION - Schedule of geographic areas (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Geographical information | |||
Net revenues | $ 180,313 | $ 109,715 | $ 182,283 |
Long-lived assets | 116,761 | 143,806 | |
PRC | |||
Geographical information | |||
Net revenues | 149,306 | 83,751 | 163,210 |
Long-lived assets | 102,769 | 128,206 | |
Singapore | |||
Geographical information | |||
Net revenues | 31,007 | 25,964 | $ 19,073 |
Long-lived assets | $ 13,992 | $ 15,600 |
RESTRICTED NET ASSETS (Details)
RESTRICTED NET ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
RESTRICTED NET ASSETS | ||
Percentage of after tax profits to be allocated to general reserve fund | 10.00% | |
Maximum threshold, expressed as a percentage of an entity's general reserve fund to its registered capital, for which allocations of after-tax profits to the general reserve fund are required | 50.00% | |
Amount appropriated to the general reserve | $ 0 | $ 0 |
Restricted net assets of the Company's PRC subsidiaries and VIEs | $ 0 | |
VIE's Kindergartens | ||
RESTRICTED NET ASSETS | ||
Percentage of after tax profits to be allocated to development fund | 25.00% | |
Percentage of annual increase in net assets to be allocated to development fund | 25.00% | |
Amount appropriated to the development fund | $ 512 | $ 592 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) ¥ in Millions | Mar. 01, 2022CNY (¥) |
Subsequent event | Beijing RYB Technology Development Co., Ltd ("RYB Technology") | |
SUBSEQUENT EVENTS | |
Compensation paid in installments, for terminating the agreement | ¥ 158.5 |
SUBSEQUENT EVENT - BALANCE SHEE
SUBSEQUENT EVENT - BALANCE SHEETS (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 65,263 | $ 53,454 |
Term deposits | 215 | 0 |
Accounts receivable | 1,300 | 1,844 |
Inventories | 6,130 | 5,773 |
Prepaid expenses and other current assets | 9,344 | 8,927 |
Loan receivables | 107 | |
Total current assets | 82,252 | 70,105 |
Non-current assets | ||
Restricted cash | 993 | 1,127 |
Property, plant and equipment, net | 39,379 | 47,638 |
Goodwill | 42,102 | 46,147 |
Intangible assets, net | 12,737 | 14,179 |
Long-term investments | 169 | 217 |
Deferred tax assets | 22,803 | 21,168 |
Other non-current assets | 8,668 | 14,438 |
Operating lease right-of-use assets | 73,973 | 87,472 |
TOTAL ASSETS | 283,076 | 302,491 |
Current liabilities | ||
Prepayments from customers, current portion | 4,919 | 4,145 |
Accrued expenses and other current liabilities | 55,642 | 54,406 |
Income tax payable | 20,888 | 18,592 |
Operating lease liabilities, current portion | 13,890 | 16,856 |
Deferred revenue, current portion | 27,019 | 34,351 |
Long-term debt, current portion | 7 | |
Total current liabilities | 122,358 | 128,357 |
Non-current liabilities | ||
Prepayments from customers, non-current portion | 1,461 | 4,024 |
Deferred revenue, non-current portion | 999 | 1,726 |
Other non-current liabilities | 11,645 | 12,519 |
Deferred income tax liabilities | 1,768 | 1,890 |
Operating lease liabilities, non-current portion | 65,689 | 76,308 |
TOTAL LIABILITIES | 203,920 | $ 224,824 |
NET ASSETS (LIABILITIES) | 79,156 | |
Pro Forma [Member] | ||
Current assets | ||
Amounts due from related parties | 44,664 | |
Non-current assets | ||
Amounts due from related parties (for Divestiture) | 22,576 | |
TOTAL ASSETS | 67,240 | |
Current liabilities | ||
Amounts due to related parties | 44,664 | |
Total current liabilities | 44,664 | |
Non-current liabilities | ||
TOTAL LIABILITIES | 44,664 | |
NET ASSETS (LIABILITIES) | 22,576 | |
Divestiture | ||
Current assets | ||
Cash and cash equivalents | 31,892 | |
Term deposits | 215 | |
Accounts receivable | 27 | |
Prepaid expenses and other current assets | 6,409 | |
Total current assets | 38,543 | |
Non-current assets | ||
Restricted cash | 993 | |
Property, plant and equipment, net | 32,967 | |
Goodwill | 22,925 | |
Intangible assets, net | 1,638 | |
Deferred tax assets | 13,969 | |
Other non-current assets | 3,194 | |
Operating lease right-of-use assets | 49,581 | |
TOTAL ASSETS | 163,810 | |
Current liabilities | ||
Prepayments from customers, current portion | 183 | |
Accrued expenses and other current liabilities | 32,337 | |
Income tax payable | 20,020 | |
Operating lease liabilities, current portion | 8,503 | |
Deferred revenue, current portion | 18,865 | |
Amounts due to related parties | 44,664 | |
Total current liabilities | 124,572 | |
Non-current liabilities | ||
Prepayments from customers, non-current portion | 540 | |
Other non-current liabilities | 2,071 | |
Deferred income tax liabilities | 14 | |
Operating lease liabilities, non-current portion | 47,239 | |
TOTAL LIABILITIES | 174,436 | |
NET ASSETS (LIABILITIES) | (10,626) | |
Non Divestiture | ||
Current assets | ||
Cash and cash equivalents | 33,371 | |
Accounts receivable | 1,273 | |
Inventories | 6,130 | |
Prepaid expenses and other current assets | 2,935 | |
Amounts due from related parties | 44,664 | |
Total current assets | 43,709 | |
Non-current assets | ||
Property, plant and equipment, net | 6,412 | |
Goodwill | 19,177 | |
Intangible assets, net | 11,099 | |
Long-term investments | 169 | |
Deferred tax assets | 8,834 | |
Other non-current assets | 5,474 | |
Operating lease right-of-use assets | 24,392 | |
Amounts due from related parties (for Divestiture) | 22,576 | |
TOTAL ASSETS | 186,506 | |
Current liabilities | ||
Prepayments from customers, current portion | 4,736 | |
Accrued expenses and other current liabilities | 23,305 | |
Income tax payable | 868 | |
Operating lease liabilities, current portion | 5,387 | |
Deferred revenue, current portion | 8,154 | |
Total current liabilities | 42,450 | |
Non-current liabilities | ||
Prepayments from customers, non-current portion | 921 | |
Deferred revenue, non-current portion | 999 | |
Other non-current liabilities | 9,574 | |
Deferred income tax liabilities | 1,754 | |
Operating lease liabilities, non-current portion | 18,450 | |
TOTAL LIABILITIES | 74,148 | |
NET ASSETS (LIABILITIES) | $ 112,358 |
SUBSEQUENT EVENT - STATEMENTS O
SUBSEQUENT EVENT - STATEMENTS OF OPERATIONS (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net revenues: | ||||
Net revenues | $ 180,313 | $ 109,715 | $ 182,283 | |
Cost of revenues: | ||||
Total cost of revenues | 149,142 | 116,901 | 155,534 | |
Gross profit (loss) | 31,171 | (7,186) | 26,749 | |
Operating expenses: | ||||
Selling expenses | 2,491 | 1,285 | 2,808 | |
General and administrative expenses | 20,286 | 24,313 | 23,775 | |
Impairment loss on goodwill | 4,559 | 8,454 | 337 | |
Impairment loss on long-lived assets | 2,148 | |||
Total operating expenses | 27,336 | 36,200 | 26,583 | |
Operating income | 3,835 | (43,386) | 166 | |
Interest income | 219 | 348 | 858 | |
Government subsidy income | 2,491 | 4,591 | 499 | |
Gain (loss) on disposal of subsidiaries | 439 | 96 | 492 | |
Impairment loss on long-term investments | $ (1,819) | (2,432) | ||
Income (loss) before income taxes | 6,984 | (40,783) | 2,015 | |
Less: Income tax expenses | 3,440 | 215 | 3,541 | |
Income before loss from equity method investments | 3,544 | (40,998) | (1,526) | |
Loss from equity method investments | (15) | (185) | (664) | |
Net (loss ) income | 3,529 | $ (41,183) | $ (2,190) | |
Divestiture | ||||
Net revenues: | ||||
Net revenues | 102,966 | |||
Cost of revenues: | ||||
Total cost of revenues | 94,590 | |||
Gross profit (loss) | 8,376 | |||
Operating expenses: | ||||
Selling expenses | 1,291 | |||
General and administrative expenses | 2,181 | |||
Impairment loss on goodwill | 4,559 | |||
Total operating expenses | 8,031 | |||
Operating income | 345 | |||
Interest income | 144 | |||
Government subsidy income | 1,053 | |||
Gain (loss) on disposal of subsidiaries | 459 | |||
Income (loss) before income taxes | 2,001 | |||
Less: Income tax expenses | 1,126 | |||
Income before loss from equity method investments | 875 | |||
Loss from equity method investments | (8) | |||
Net (loss ) income | 867 | |||
DivestitureAdjustment [Member] | ||||
Operating expenses: | ||||
Gain on divestiture | 34,068 | |||
Income (loss) before income taxes | 34,068 | |||
Net (loss ) income | 34,068 | |||
Non Divestiture | ||||
Net revenues: | ||||
Net revenues | 77,347 | |||
Cost of revenues: | ||||
Total cost of revenues | 54,552 | |||
Gross profit (loss) | 22,795 | |||
Operating expenses: | ||||
Selling expenses | 1,200 | |||
General and administrative expenses | 18,105 | |||
Total operating expenses | 19,305 | |||
Operating income | 3,490 | |||
Interest income | 75 | |||
Government subsidy income | 1,438 | |||
Gain (loss) on disposal of subsidiaries | (20) | |||
Gain on divestiture | 34,068 | |||
Income (loss) before income taxes | 39,051 | |||
Less: Income tax expenses | 2,314 | |||
Income before loss from equity method investments | 36,737 | |||
Loss from equity method investments | (7) | |||
Net (loss ) income | $ 36,730 |