School, university, and business leaders now have the flexibility to choose their experience and maximize learning and collaboration in classrooms, teaching spaces, meeting rooms, or on the go with the most adaptable, easy-to-use solution.SEATTLE, Nov. 4, 2024 /PRNewswire/ -- Promethean, a leading global tech company and brand owned by Mynd.ai, Inc. (NYSE American: MYND), has announced the most adaptable interactive flat panel display (IFPD) and software solution in Promethean's line-up—the all-new ActivPan ...

SEATTLE, Oct. 21, 2024 /PRNewswire/ -- Mynd.ai, Inc. ("Mynd" or the "Company") (NYSE American: MYND) today announced that the Company's Board of Directors has authorized the repurchase of up to $10 million of its American depositary shares ("ADSs") and/or ordinary shares as market conditions and the Company's liquidity warrant."We are committed to delivering long-term value to our shareholders and we believe that the potential to repurchase our shares and ADSs at these levels represents a compelling opportu ...

The company was recognized in the Primary category for its Explain Everything Advanced lesson creation and delivery software SEATTLE, Oct. 14, 2024 /PRNewswire/ -- Promethean, a leading global education technology company and brand owned by Mynd.ai, Inc. (NYSE American: MYND), won this year's Tech & Learning Awards of Excellence: Back to School 2024 in the Primary category from Tech & Learning magazine. Back for the 2024-25 school year, the Tech & Learning Awards of Excellence seek out the most outstanding ...

Core Insights - Mynd.ai, Inc. reported a revenue of $166.0 million for H1 2024, a decrease of $56.5 million from $222.5 million in the same period last year, primarily due to reduced spending by key customers amid budget uncertainties [2][4] - The company experienced a gross profit of $45.4 million, reflecting a 22.4% decline from $58.5 million year-over-year, although gross margins improved by 100 basis points to 27.3% due to operational efficiencies [2][3] - The net loss for H1 2024 was $47.8 million, compared to a loss of $15.7 million in the same period last year, largely due to a valuation allowance against deferred tax assets and lower sales volumes [4][5] Financial Performance - Revenue for H1 2024 was $166.0 million, down from $222.5 million in H1 2023, attributed to decreased customer spending and increased competition [2][4] - Gross profit decreased to $45.4 million from $58.5 million, with gross margins rising to 27.3% due to cost savings and operational improvements [3][4] - Adjusted EBITDA loss improved to $5.6 million from a loss of $6.1 million in the prior year, indicating some operational efficiency despite lower sales volumes [4][19] Operational Insights - The company has implemented cost-saving measures to address challenges in the education technology market, which has seen a softening demand trend [2][5] - Management remains confident in the business model and aims to maintain market leadership in interactive flat panel displays (IFPDs) within the global education sector [2][5] - Cash flow from operations improved by $5.0 million compared to the same period last year, with cash reserves totaling $69.4 million [2][5] Market Context - The education technology sector is experiencing headwinds due to uncertainty around future budget allocations, leading to reduced demand from local education authorities [2][5] - The company is focused on delivering innovative hardware and software solutions to adapt to changing market conditions and maintain its competitive edge [2][5]

Core Insights - The ActivPanel LX with Google EDLA-certified OPS-A computing module has been recognized as one of the best edtech solutions for classrooms by Tech & Learning awards for 2024, highlighting its transformative impact on education globally [1][5]. Company Overview - Promethean is a leading global education technology company with over 25 years of experience, serving 126 countries and headquartered in Seattle, Washington. The company focuses on designing innovative learning and collaboration tools [4][5]. Product Features - The ActivPanel LX is designed to integrate seamlessly with existing hardware, software, and apps used by educators, allowing for immediate engagement in interactive lessons without a learning curve [2][6]. - The Google EDLA-certified OPS-A computing module enhances the ActivPanel LX by enabling integration with Google Workspace tools and access to apps from the Google Play Store, while also providing advanced security features [6][7]. Awards and Recognition - The ActivPanel LX has received multiple accolades, including the Tech & Learning Awards of Excellence: Best of 2023, and was awarded the Tech & Learning Best of Show Award at ISTELive 24 in June 2024 [3][5].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023. OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1 ...

PART I [Key Information](index=9&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section details Gravitas Education Holdings, Inc.'s (GEHI) structure as a Cayman Islands holding company operating in China through subsidiaries and a Variable Interest Entity (VIE), highlighting the 2022 Divestiture and presenting key financial data while addressing regulatory risks - GEHI is a Cayman Islands holding company, not a Chinese operating company. It conducts business in mainland China through subsidiaries and contractual arrangements with a Variable Interest Entity (VIE). Investors hold equity in the Cayman entity, not the Chinese operating entities[24](index=24&type=chunk) - In March and April 2022, the company executed the "2022 Divestiture," unwinding its historical VIE agreements to divest its directly operated kindergarten business in mainland China. This strategic shift was to address compliance requirements and transition to an educational services output platform. The divested kindergartens are now customers under new 15-year service agreements[26](index=26&type=chunk)[40](index=40&type=chunk) - Following the 2022 Divestiture, the company entered into new contractual arrangements with Zhudou Investment (the "new VIE") in April 2022 for licensing purposes. Revenues from the new VIE accounted for **0.9% of total revenues from continuing operations in 2022**[27](index=27&type=chunk) - The company's auditor, Marcum Asia CPAs LLP, is based in New York and is inspectable by the PCAOB. Therefore, the company does not expect to be identified as a Commission-Identified Issuer under the Holding Foreign Companies Accountable Act (HFCAA) for the fiscal year 2022[33](index=33&type=chunk) Selected Consolidated Financial Data (Continuing Operations) | Indicator | 2020 (USD thousands) | 2021 (USD thousands) | 2022 (USD thousands) | | :--- | :--- | :--- | :--- | | **Total net revenues** | 42,426 | 51,905 | 50,014 | | **Gross (loss)/profit** | (1,021) | 2,505 | 4,460 | | **Operating (loss)** | (29,725) | (17,425) | (80,090) | | **Net loss from continuing operations** | (26,829) | (19,577) | (79,196) | | **Net (loss) income** | (41,183) | 3,529 | (45,883) | | **Total Assets** | 302,491 | 283,076 | 80,673 | | **Total Liabilities** | 224,824 | 203,920 | 55,774 | | **Total Equity** | 67,679 | 74,214 | 24,788 | Condensed Consolidating Financial Data for Continuing Operations (2022) | (USD in thousands) | Parent (GEHI) | Subsidiaries | VIE | Eliminations | Consolidated Total | | :--- | :--- | :--- | :--- | :--- | :--- | | **Net revenues** | — | 49,582 | 6,441 | (6,009) | 50,014 | | **Net (loss)/income** | (41,371) | (55,652) | 5,402 | 45,738 | (45,883) | | **Total assets** | 25,928 | 15,876 | 4,417 | 34,452 | 80,673 | | **Total liabilities** | 50 | 74,114 | 7,254 | (25,644) | 55,774 | [Risk Factors](index=24&type=section&id=D.Risk%20Factors) The company faces significant business, structural, regulatory, and market risks, including uncertainties from its divestiture and reliance on VIE arrangements - Key business risks include uncertainties from the divestiture of directly operated kindergartens, reliance on a limited number of customers (the former VIEs), potential inability to maintain service fees, and challenges in executing growth strategies[53](index=53&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) - Significant corporate structure risks stem from the reliance on VIE contractual arrangements, which may not be as effective as direct ownership. There is a risk that the PRC government could find these arrangements non-compliant, leading to severe penalties. The interpretation of the Foreign Investment Law also adds substantial uncertainty[57](index=57&type=chunk)[162](index=162&type=chunk)[170](index=170&type=chunk) - Doing business in China entails risks from changes in economic and political policies, the need for CSRC approval for offshore offerings, significant government oversight, and potential delisting under the HFCAA if the PCAOB cannot inspect auditors in the future[59](index=59&type=chunk)[60](index=60&type=chunk) - Risks related to the company's ADSs include price volatility, potential delisting from the NYSE if the price remains below compliance standards, and a dual-class voting structure that limits the influence of Class A shareholders and ADS holders[62](index=62&type=chunk)[66](index=66&type=chunk) [Information on the Company](index=61&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) This section details the company's history, business model transformation, corporate structure, and physical assets following significant divestitures and a proposed merger [History and Development of the Company](index=61&type=section&id=A.History%20and%20Development%20of%20the%20Company) The company's history includes its founding, IPO, name change, and strategic divestitures, culminating in a proposed merger and further divestiture - The company was founded in 1998, established its VIE structure in 2007, and completed its IPO on the NYSE in September 2017. In May 2022, the company changed its name from RYB Education, Inc. to Gravitas Education Holdings, Inc. (GEHI)[268](index=268&type=chunk)[269](index=269&type=chunk)[272](index=272&type=chunk)[274](index=274&type=chunk) - In March 2022, the company initiated the "2022 Divestiture" by terminating its VIE agreements, effectively divesting its directly operated kindergarten business in China as of April 30, 2022. It transitioned to providing services like brand royalty, training, and IT systems to the former VIEs[273](index=273&type=chunk) - On April 18, 2023, the company entered into definitive agreements for a major strategic transaction. This includes merging with eLMTree (NetDragon's non-PRC education business) and concurrently divesting all of its remaining education business in the PRC (the "2023 Divestiture"). Post-transaction, NetDragon is expected to become the controlling shareholder[115](index=115&type=chunk)[278](index=278&type=chunk)[279](index=279&type=chunk)[280](index=280&type=chunk) [Business Overview](index=64&type=section&id=B.Business%20Overview) The company transitioned to an education service platform model, focusing on play-and-learn centers and Singapore operations, facing intense market competition - Following the 2022 Divestiture, the company transitioned its business model from direct operation and franchising to an education service output platform, providing products and services to early childhood education institutions[288](index=288&type=chunk)[325](index=325&type=chunk) - As of December 31, 2022, the company's network included **5 directly-operated and 812 franchise play-and-learn centers**. It no longer has any directly operated or franchised kindergartens in mainland China[292](index=292&type=chunk)[302](index=302&type=chunk) - The Singapore operations are a key part of the business, with **17 directly operated and 12 franchised kindergartens**, and **38 directly operated and 5 franchised student care centers** as of December 31, 2022. Total student enrollment in Singapore was **6,170**[296](index=296&type=chunk) - The company's service offerings to divested and third-party kindergartens include brand royalty, training, management IT systems, recruitment, and curriculum design services[311](index=311&type=chunk)[327](index=327&type=chunk) - The company faces intense competition from other educational service providers in a highly fragmented market. Key competitive factors include brand recognition, curriculum development, and network control[110](index=110&type=chunk)[358](index=358&type=chunk)[359](index=359&type=chunk) [Organizational Structure](index=94&type=section&id=C.Organizational%20Structure) The company terminated former VIE agreements and established a new VIE structure with Zhudou Investment to maintain control and consolidate under U.S. GAAP - The company terminated its contractual arrangements with the former VIE (Beijing RYB) in March 2022, coinciding with the divestiture of its directly operated kindergarten business[478](index=478&type=chunk) - In April 2022, the company, through its subsidiary TJ Qiyuan, entered into a new set of contractual arrangements with a new VIE, Zhudou Investment, for licensing purposes. These agreements grant the company effective control and economic benefits from the new VIE[479](index=479&type=chunk) - The new VIE structure includes agreements such as an Exclusive Consultation and Service Agreement, Business Operation Agreement, Powers of Attorney, and Equity Pledge Agreements to ensure control and consolidation under U.S. GAAP[480](index=480&type=chunk)[481](index=481&type=chunk)[483](index=483&type=chunk)[485](index=485&type=chunk) [Property, Plant and Equipment](index=98&type=section&id=D.Property%2C%20Plant%20and%20Equipment) As of December 31, 2022, the company leased approximately 36,150 square meters of office and teaching facilities in China and Singapore - As of December 31, 2022, the company leased approximately **36,150 square meters** of office space and facilities for its directly operated teaching facilities in China and Singapore[489](index=489&type=chunk) [Operating and Financial Review and Prospects](index=98&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section analyzes the company's financial performance, highlighting the shift to service fees, increased losses due to impairment charges, and weakened liquidity [Operating Results](index=98&type=section&id=A.Operating%20Results) The company's 2022 operating results show a slight revenue decrease but a significant increase in losses, primarily due to substantial impairment charges Year-over-Year Financial Performance (Continuing Operations) | Financial Metric (USD thousands) | 2021 | 2022 | Change (%) | | :--- | :--- | :--- | :--- | | **Total Net Revenues** | 51,905 | 50,014 | -3.6% | | **Gross Profit** | 2,505 | 4,460 | +78.0% | | **Operating Loss** | (17,425) | (80,090) | +360% | | **Net Loss from Continuing Operations** | (19,577) | (79,196) | +305% | - The significant increase in operating loss in 2022 was primarily due to major impairment charges, including: - Impairment loss on goodwill: **$19.2 million** - Impairment loss on consideration receivables: **$22.1 million** - Impairment loss on loan receivables: **$23.3 million** - Impairment loss on long-lived assets: **$3.5 million**[532](index=532&type=chunk)[543](index=543&type=chunk)[544](index=544&type=chunk)[545](index=545&type=chunk) - The 2022 Divestiture shifted the company's cost structure from a high-cost, asset-heavy direct operation model to a lower-cost, asset-light service model, resulting in a higher gross profit margin despite a slight revenue decrease[515](index=515&type=chunk) - Net revenues from continuing operations increased by **22.3%** from **$42.4 million** in 2020 to **$51.9 million** in 2021, mainly due to the recovery of operations from the COVID-19 pandemic[550](index=550&type=chunk) [Liquidity and Capital Resources](index=117&type=section&id=B.Liquidity%20and%20Capital%20Resources) The company's cash and cash equivalents significantly decreased in 2022 due to business disposal, though current liquidity is deemed sufficient Cash and Cash Equivalents Position | As of December 31 | 2020 (USD thousands) | 2021 (USD thousands) | 2022 (USD thousands) | | :--- | :--- | :--- | :--- | | **Cash and cash equivalents and restricted cash** | 54,581 | 66,256 | 31,168 | - Net cash from operating activities was **$1.9 million** in 2022, a significant decrease from **$19.2 million** in 2021. Net cash used in investing activities increased substantially to **$34.6 million** in 2022, primarily due to cash out from the disposal of business[615](index=615&type=chunk)[620](index=620&type=chunk)[624](index=624&type=chunk) - The company believes its current cash and cash equivalents are sufficient to meet its needs for the next 12 months. However, as a holding company, its ability to use cash from its PRC subsidiaries is subject to PRC regulations on dividend distribution and currency exchange[618](index=618&type=chunk)[635](index=635&type=chunk) [Critical Accounting Estimates](index=120&type=section&id=E.Critical%20Accounting%20Estimates) Critical accounting estimates include goodwill impairment and the valuation of receivables from former VIEs, resulting in significant impairment losses - Goodwill impairment assessment is a critical estimate. The company uses a discounted cash flow (DCF) methodology. In 2022, this assessment led to a **$19.2 million** impairment charge for the Global Eduhub Holding Limited reporting unit[645](index=645&type=chunk)[1089](index=1089&type=chunk) - The valuation of consideration and loan receivables from the former VIEs is another critical estimate. Due to the former VIEs' operational challenges, the company recorded a full allowance, resulting in impairment losses of **$22.1 million** for consideration receivables and **$23.3 million** for loan receivables in 2022[651](index=651&type=chunk)[1000](index=1000&type=chunk) [Directors, Senior Management and Employees](index=123&type=section&id=ITEM%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section details the company's leadership, compensation, share incentive plans, and a significant reduction in employee numbers due to the 2022 Divestiture - The board of directors is chaired by Gang Chen. Co-founders Chimin Cao and Yanlai Shi serve as Director and Director/CEO, respectively. Siyuan Wang was appointed CFO in April 2023[654](index=654&type=chunk)[661](index=661&type=chunk) - For the fiscal year ended December 31, 2022, the aggregate cash compensation paid to directors and executive officers was approximately **RMB 10.9 million**[662](index=662&type=chunk) - The company maintains a 2009 Share Incentive Plan and a 2017 Share Incentive Plan to grant options and restricted shares to employees, directors, and consultants[668](index=668&type=chunk)[677](index=677&type=chunk) - The total number of employees decreased significantly from **6,341** as of December 31, 2021, to **1,143** as of December 31, 2022, mainly as a result of the 2022 Divestiture of the kindergarten business[702](index=702&type=chunk) [Major Shareholders and Related Party Transactions](index=133&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section details the company's concentrated ownership structure and outlines new related party transactions with former VIEs following the 2022 Divestiture Major Shareholders' Beneficial Ownership (as of Feb 28, 2023) | Shareholder | Percentage of Total Ordinary Shares | Percentage of Aggregate Voting Power | | :--- | :--- | :--- | | **Gang Chen (Ascendent Rainbow)** | 30.3% | 37.5% | | **Chimin Cao** | 24.4% | 27.7% | | **Yanlai Shi** | 15.3% | 24.7% | | **All Directors & Executive Officers as a Group** | 63.9% | 88.1% | - Following the 2022 Divestiture, the company entered into new related party transactions with the former VIEs, including 15-year service agreements for brand royalty, training, and IT systems, and a guaranteed loan agreement for **RMB 240.5 million**[724](index=724&type=chunk)[725](index=725&type=chunk) [Financial Information](index=134&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) This section addresses the dismissal of previous class action lawsuits and the company's intention to declare a cash dividend conditional on a proposed merger - Previous putative class action lawsuits filed against the company and its directors following its 2017 IPO have been voluntarily dismissed or discontinued[728](index=728&type=chunk)[729](index=729&type=chunk) - The company has not declared or paid any cash dividends to date. However, it expects to make a cash dividend distribution conditional upon the closing of the Merger, using the remaining proceeds from its initial public offering[733](index=733&type=chunk) [Additional Information](index=136&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section covers the company's dual-class share structure, potential PFIC status, and tax implications as a PRC resident enterprise - The company has a dual-class share structure. Class A ordinary shares have one vote per share, while Class B ordinary shares have ten votes per share. Class B shares are convertible to Class A shares, but not vice-versa[245](index=245&type=chunk)[745](index=745&type=chunk) - The company does not believe it was a Passive Foreign Investment Company (PFIC) for the 2022 taxable year, but acknowledges that its PFIC status is an annual determination and future classification is uncertain, particularly due to market price volatility[263](index=263&type=chunk)[823](index=823&type=chunk)[824](index=824&type=chunk) - If the company is classified as a PRC resident enterprise for tax purposes, it would be subject to a **25% tax** on its worldwide income, and dividends paid to non-PRC shareholders could be subject to a **10% withholding tax**[231](index=231&type=chunk)[776](index=776&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=151&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risk is foreign exchange fluctuations between RMB/SGD and USD, with a 10% RMB depreciation impacting cash by $0.7 million - The company's main market risk is foreign exchange risk, as its revenues are primarily in RMB and SGD, while its ADSs are traded in USD[849](index=849&type=chunk) - As of December 31, 2022, a hypothetical **10% depreciation** of the RMB against the USD would result in a decrease of **US$0.7 million** in the value of the company's RMB-denominated cash, term deposits, and restricted cash[852](index=852&type=chunk) PART II [Controls and Procedures](index=153&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls were ineffective as of December 31, 2022, due to a material weakness from insufficient accounting personnel - Management concluded that as of December 31, 2022, the company's disclosure controls and procedures were not effective[867](index=867&type=chunk) - A material weakness in internal control over financial reporting was identified. The weakness relates to a lack of sufficient financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP and SEC reporting requirements[873](index=873&type=chunk) - The material weakness is primarily attributed to significant personnel turnover associated with the 2022 Divestiture. The company is implementing measures to remediate the issue, including strengthening controls, enhancing policies, and providing professional training[874](index=874&type=chunk)[876](index=876&type=chunk) [Change in Registrant's Certifying Accountant](index=156&type=section&id=ITEM%2016F.%20CHANGE%20IN%20REGISTRANT%27S%20CERTIFYING%20ACCOUNTANT) This section details the company's changes in independent auditors, from KPMG to Friedman, and then to Marcum Asia, with no reported disagreements - On December 10, 2021, the company engaged Friedman LLP to replace KPMG Huazhen LLP as its independent registered public accounting firm[887](index=887&type=chunk) - On January 5, 2023, the company engaged Marcum Asia CPAs LLP to replace Friedman LLP as its independent registered public accounting firm[891](index=891&type=chunk) - The company reported no disagreements with either KPMG or Friedman on any matter of accounting principles, financial statement disclosure, or auditing scope during their respective tenures[888](index=888&type=chunk)[892](index=892&type=chunk) [Corporate Governance](index=157&type=section&id=ITEM%2016G.%20CORPORATE%20GOVERNANCE) As a foreign private issuer, the company follows Cayman Islands corporate governance practices differing from NYSE standards, potentially offering less shareholder protection - The company, as a foreign private issuer, follows home country (Cayman Islands) practices for corporate governance, which differ from NYSE listing standards[896](index=896&type=chunk) - Specific home country practices adopted include not having a majority of independent directors on the board and not holding an annual general meeting for shareholders in 2022[896](index=896&type=chunk) PART III [Financial Statements](index=158&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section presents the company's audited consolidated financial statements for 2020-2022, reflecting reclassification of divested operations and restatement of interim financials - The financial statements have been audited by Marcum Asia CPAs LLP for the year ended December 31, 2022. The firm also audited the retrospective adjustments for discontinued operations for 2020 and 2021[914](index=914&type=chunk)[915](index=915&type=chunk) - The 2022 Divestiture of the directly operated kindergarten business in China has been reclassified as a discontinued operation. The financial statements for all periods presented have been adjusted to reflect this change[978](index=978&type=chunk)[1059](index=1059&type=chunk) - A one-time gain of **$36.3 million** on the deconsolidation of discontinued operations was recorded for the year ended December 31, 2022[1063](index=1063&type=chunk) - The company restated its previously issued unaudited condensed financial statements for the six months ended June 30, 2022, due to an error in classifying revenue from enrichment courses, which should have been recorded in discontinued operations instead of continuing operations[1174](index=1174&type=chunk)[1175](index=1175&type=chunk) - Subsequent to year-end, on April 18, 2023, the company entered into a significant agreement for a merger with NetDragon's non-PRC education business and the concurrent divestiture of all its remaining China education business[1181](index=1181&type=chunk)[1184](index=1184&type=chunk)

[Introduction](index=6&type=section&id=INTRODUCTION) This section defines key terms and abbreviations while providing a standard safe harbor statement for forward-looking information, which is subject to risks and uncertainties - Key definitions clarify the corporate structure, including the distinction between the 'former VIE' associated with the divested kindergarten business and the 'new VIE' established for licensing purposes[14](index=14&type=chunk) - The forward-looking statements cover goals, business development, industry growth expectations, and the impact of government policies, but are qualified by cautionary statements regarding potential risks[17](index=17&type=chunk)[18](index=18&type=chunk)[20](index=20&type=chunk) Part I [Item 3. Key Information](index=8&type=section&id=Item%203.%20KEY%20INFORMATION) This section outlines the company's Cayman Islands holding structure, its reliance on VIEs for Chinese operations, associated risks, and presents selected historical financial data - RYB is a Cayman Islands holding company, not a Chinese operating company. It controls its Chinese operations through contractual arrangements with a VIE, meaning ADS holders own shares in the holding company, not the Chinese operating entity[24](index=24&type=chunk) - In March 2022, the company terminated its contractual arrangements with the 'former VIE' and divested its directly operated kindergarten business, effective April 30, 2022. A new VIE structure was established in April 2022 for licensing purposes[24](index=24&type=chunk) - Revenues from the VIE constituted **89.2%**, **73.0%**, and **78.8%** of total revenues in 2019, 2020, and 2021, respectively, highlighting the company's heavy reliance on the VIE structure[25](index=25&type=chunk) - The company states that as of the report date, it is not required to obtain permissions from the CSRC or go through a cybersecurity review by the CAC for its offshore offerings[28](index=28&type=chunk) Selected Financial Data (2019-2021) | Financial Metric | 2019 (USD thousands) | 2020 (USD thousands) | 2021 (USD thousands) | | :--- | :--- | :--- | :--- | | **Total Net Revenues** | 182,283 | 109,715 | 180,313 | | **Gross Profit (Loss)** | 26,749 | (7,186) | 31,171 | | **Operating Income (Loss)** | 166 | (43,386) | 3,835 | | **Net Income (Loss)** | (2,190) | (41,183) | 3,529 | | **Net cash from operating activities** | 12,982 | (6,526) | 19,230 | [Risk Factors](index=18&type=section&id=D.Risk%20Factors) This section details significant risks related to business operations, corporate structure, operating in China, and American Depositary Shares, including regulatory changes and potential delisting - **Business Risks:** The company faces uncertainty from its new strategy of divesting directly operated kindergartens and now relies significantly on service agreements with the former VIE, creating customer concentration risk[54](index=54&type=chunk)[57](index=57&type=chunk) - **Corporate Structure Risks:** The VIE structure is a primary risk. If the PRC government finds these arrangements non-compliant, the company could face severe penalties, including being forced to relinquish its interests in the VIE operations[142](index=142&type=chunk)[147](index=147&type=chunk) - **China-Specific Risks:** The company is subject to significant PRC government oversight, which could change at any time. Furthermore, under the Holding Foreign Companies Accountable Act (HFCAA), its ADSs may be prohibited from trading in the U.S. if the PCAOB cannot inspect its auditor for three (or potentially two) consecutive years[174](index=174&type=chunk)[175](index=175&type=chunk)[179](index=179&type=chunk) - **ADS Risks:** The company's ADSs face delisting risk from the NYSE if the price remains below **$1.00** for an extended period. The dual-class share structure gives co-founders and a major shareholder significant voting control, limiting the influence of public ADS holders[217](index=217&type=chunk)[221](index=221&type=chunk)[223](index=223&type=chunk) [Item 4. Information on the Company](index=86&type=section&id=Item%204.%20INFORMATION%20ON%20THE%20COMPANY) This section provides an overview of RYB Education's history, business operations, organizational structure, and the regulatory landscape, including its recent strategic shift to an asset-light model [History and Development of the Company](index=86&type=section&id=A.History%20and%20Development%20of%20the%20Company) This section outlines the company's history, including its 2017 NYSE listing, the 2022 divestiture of its kindergarten business, establishment of a new VIE, and proposed name change - The company divested its directly operated kindergarten business in China, effective **April 30, 2022**, by terminating its 'former VIE' agreements. It will now provide services to these divested kindergartens[250](index=250&type=chunk) - In conjunction with the divestiture, the company established a new VIE structure with Zhudou Investment in **April 2022** for licensing purposes[251](index=251&type=chunk) - The company is proposing a name change from RYB Education Inc. to Gravitas Education Holdings Inc., signaling a potential rebranding following its strategic shift[252](index=252&type=chunk) [Business Overview](index=88&type=section&id=B.Business%20Overview) This section describes the company's early childhood education services, network size in China and Singapore, and its strategic shift to an asset-light service model post-divestiture Network Size as of Dec 31, 2021 | Facility Type | Location | Directly Operated | Franchised | | :--- | :--- | :--- | :--- | | Kindergartens | China | 90 | 238 | | Play-and-learn centers | China | 5 | 1,012 | | Kindergartens | Singapore | 18 | 9 | | Student care centers | Singapore | 36 | 4 | - Post-divestiture, the business model in China has transformed into an educational service platform, aiming for an **asset-light structure** with greater scalability and lower operational risk[290](index=290&type=chunk)[292](index=292&type=chunk) - The company emphasizes stringent network control over its franchisees, including standardized operations, mandatory training, centralized curriculum delivery via a whiteboard system, and exclusive procurement of certain goods[270](index=270&type=chunk)[273](index=273&type=chunk)[275](index=275&type=chunk) [Organizational Structure](index=136&type=section&id=C.Organizational%20Structure) This section details the company's complex holding structure, its historical and new VIE arrangements, and the termination of former VIE agreements as part of the 2022 divestiture - The company terminated its long-standing contractual arrangements with its 'former VIE' in **March 2022**, divesting control over the directly operated kindergarten business effective **April 30, 2022**[448](index=448&type=chunk) - As part of the divestiture, the company's subsidiaries entered into new **15-year service agreements** with the former VIE to provide brand, training, IT, and curriculum services[449](index=449&type=chunk) - A new VIE structure was established in **April 2022** with Zhudou Investment to manage licensing concerns, utilizing a standard set of control agreements (e.g., exclusive service, equity pledge, power of attorney)[450](index=450&type=chunk)[451](index=451&type=chunk)[455](index=455&type=chunk) [Item 5. Operating and Financial Review and Prospects](index=141&type=section&id=Item%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section analyzes the company's financial performance, including revenue recovery in 2021, liquidity, and the expected financial impact of the 2022 divestiture and critical accounting estimates [Operating Results](index=143&type=section&id=A.Operating%20Results) This section details the company's strong financial rebound in 2021, with significant increases in net revenues, gross profit, and net income, and outlines the expected impact of the 2022 divestiture Comparison of Operating Results (2020 vs. 2021) | Metric (USD thousands) | 2020 | 2021 | % Change | | :--- | :--- | :--- | :--- | | **Total Net Revenues** | 109,715 | 180,313 | 64.3% | | **Gross Profit (Loss)** | (7,186) | 31,171 | N/A | | **Operating Income (Loss)** | (43,386) | 3,835 | N/A | | **Net Income (Loss)** | (41,183) | 3,529 | N/A | - The significant increase in **2021 revenue and profitability** was primarily due to directly operated kindergartens in China being in normal operation for most of the year, whereas they were temporarily closed for much of 2020 due to COVID-19[505](index=505&type=chunk) - The company recorded a goodwill impairment loss of **$4.6 million** in 2021 and **$8.5 million** in 2020, citing changes in the regulatory environment and the impact of COVID-19[512](index=512&type=chunk)[527](index=527&type=chunk) - Post-divestiture, the company's cost structure will change significantly. It will cease to incur direct operating costs like rent and staff compensation for the divested kindergartens, leading to an expected increase in profit margins from the new service-based model[542](index=542&type=chunk) [Liquidity and Capital Resources](index=169&type=section&id=B.Liquidity%20and%20Capital%20Resources) This section details the company's liquidity, primarily from operations, highlighting cash balances, cash flow improvements in 2021, and the expected positive impact of the 2022 divestiture Cash Flow Summary (USD thousands) | Cash Flow | 2019 | 2020 | 2021 | | :--- | :--- | :--- | :--- | | Net cash from operating activities | 12,982 | (6,526) | 19,230 | | Net cash used in investing activities | (34,378) | (2,585) | (6,429) | | Net cash (used in)/from financing activities | (13,454) | 556 | (1,397) | | **Cash at end of year** | **69,438** | **54,581** | **66,256** | - Capital expenditures were **$7.0 million** in 2021, primarily for facility renovations that were postponed from 2020 due to the pandemic[602](index=602&type=chunk) - The divestiture is expected to improve liquidity, as the company will receive **RMB 158.5 million** (approx. **$24.0 million**) in compensation payments and will shift to a less capital-intensive business model[589](index=589&type=chunk) [Critical Accounting Estimates](index=175&type=section&id=E.Critical%20Accounting%20Estimates) This section outlines critical accounting estimates, focusing on the valuation allowance for deferred tax assets and goodwill impairment testing, which relies on significant management judgment and assumptions - Goodwill impairment testing is a critical estimate. The company uses a discounted cash flow model, with key assumptions including revenue growth (**2%-14%**), WACC (**14%-18%**), and terminal growth rates (**2%-2.3%**) for its 2021 assessment[619](index=619&type=chunk)[620](index=620&type=chunk)[992](index=992&type=chunk) - The 2021 impairment test resulted in a full impairment of goodwill amounting to **$4.6 million** for the Shanghai Peidi reporting unit[993](index=993&type=chunk) - Determining the valuation allowance for deferred tax assets requires significant judgment regarding future taxable income and the feasibility of tax planning strategies[616](index=616&type=chunk) [Item 6. Directors, Senior Management and Employees](index=179&type=section&id=Item%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section details the company's leadership, compensation, board structure, employee base, and concentrated share ownership with significant voting control by co-founders and a major shareholder - For the fiscal year ended December 31, 2021, the aggregate cash compensation paid to directors and executive officers was approximately **RMB 13.1 million**[632](index=632&type=chunk) - As of December 31, 2021, the company employed **6,341** people, with **4,033** being teaching staff in directly operated facilities[669](index=669&type=chunk) - As of February 28, 2022, co-founders Mr. Cao and Ms. Shi, along with Ascendent Rainbow (Cayman) Limited, collectively held approximately **90.0%** of the company's total voting power due to the dual-class share structure[222](index=222&type=chunk) [Item 7. Major Shareholders and Related Party Transactions](index=194&type=section&id=Item%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section details major shareholders and related party transactions, including new 15-year service agreements and a 10-year guaranteed loan agreement with the former VIE following the 2022 divestiture - Following the divestiture, the company entered into new **15-year service agreements** with the former VIE, which is now a related party customer[687](index=687&type=chunk) - A guaranteed loan agreement for **RMB 240.5 million** was established with the former VIE, formalizing historical loans. The loan has a **10-year term** with a **4% annual interest rate**, with repayments starting **May 1, 2023**[688](index=688&type=chunk) [Item 8. Financial Information](index=196&type=section&id=Item%208.%20FINANCIAL%20INFORMATION) This section presents the company's consolidated financial statements, discusses the voluntary dismissal of prior class action lawsuits, and outlines its policy of retaining earnings for business expansion - Two separate class action lawsuits related to the company's 2017 IPO were voluntarily dismissed or discontinued by the plaintiffs in late 2020[691](index=691&type=chunk)[692](index=692&type=chunk) - The company does not expect to pay any cash dividends in the foreseeable future, intending to retain earnings for business operations and growth[696](index=696&type=chunk) [Item 10. Additional Information](index=198&type=section&id=Item%2010.%20ADDITIONAL%20INFORMATION) This section details the company's corporate governance, including its dual-class share structure, and discusses PRC and U.S. tax considerations, notably the risk of PFIC classification - The company has a dual-class share structure: each Class A share has one vote, while each Class B share has **ten votes**. Class B shares are convertible to Class A, but not vice-versa[221](index=221&type=chunk)[706](index=706&type=chunk) - There is a risk that PRC tax authorities could classify the Cayman Islands holding company as a PRC resident enterprise, which would subject it to a **25% tax** on its global income[736](index=736&type=chunk)[737](index=737&type=chunk) - There is a material risk that the company may be classified as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes, particularly due to recent market capitalization fluctuations and changes in its asset composition following the divestiture. PFIC status could result in adverse tax consequences for U.S. Holders[242](index=242&type=chunk)[749](index=749&type=chunk) [Item 11. Quantitative and Qualitative Disclosures About Market Risk](index=216&type=section&id=Item%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section discusses the company's market risks, primarily foreign exchange volatility between RMB and USD, and notes minimal interest rate risk - The company's primary market risk is foreign exchange volatility between the RMB and the U.S. dollar, as most of its business is denominated in RMB while its ADSs are traded in USD[772](index=772&type=chunk) - As of December 31, 2021, a hypothetical **10% depreciation** of the RMB against the USD would result in a **$3.5 million** decrease in the value of its RMB-denominated cash and cash equivalents[775](index=775&type=chunk) [Item 15. Controls and Procedures](index=220&type=section&id=Item%2015.%20CONTROLS%20AND%20PROCEDURES) This section reports management's conclusion that disclosure controls and internal control over financial reporting were effective as of December 31, 2021 - Management concluded that as of **December 31, 2021**, the company's disclosure controls and procedures were effective[788](index=788&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of **December 31, 2021**, based on the COSO 2013 framework[789](index=789&type=chunk) [Item 16. Various Governance and Accountant Items](index=222&type=section&id=Item%2016.%20Various%20Governance%20and%20Accountant%20Items) This section covers governance, including the audit committee financial expert, code of conduct, changes in independent auditors, a 2019 share repurchase program, and reliance on foreign private issuer exemptions - The company changed its independent auditor to **Friedman LLP** on **December 10, 2021**, after having replaced Deloitte with KPMG on **November 18, 2020**[802](index=802&type=chunk)[807](index=807&type=chunk) - In 2019, the company completed a **$12 million** share repurchase program, buying back **1,627,455 ADSs**[799](index=799&type=chunk)[801](index=801&type=chunk) - The company utilizes the foreign private issuer exemption to follow home country governance practices, and its board does not have a majority of independent directors[811](index=811&type=chunk) [Item 18. Financial Statements](index=227&type=section&id=Item%2018.%20FINANCIAL%20STATEMENTS) This section presents the company's consolidated financial statements for 2019-2021, prepared under U.S. GAAP, including audit reports from multiple firms and notes on the 2022 kindergarten business divestiture - The financial statements include audit opinions from three different firms for the three years presented: **Friedman LLP (2021)**, **KPMG Huazhen LLP (2020)**, and **Deloitte Touche Tohmatsu (2019)**[825](index=825&type=chunk)[831](index=831&type=chunk)[836](index=836&type=chunk) - Note 26 to the financial statements details the significant subsequent event of the divestiture of the directly operated kindergarten business in China, which became effective on **April 30, 2022**. This event fundamentally changes the company's operational and financial structure going forward[1079](index=1079&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ⌧ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020. OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ...

RYB Education, Inc. (RYB) Q3 2020 Earnings Conference Call December 8, 2020 8:00 AM ET Company Participants Serena Xue - IR, Manager Yanlai Shi - Co-Founder, Director and CEO Hao Gu - CFO Conference Call Participants Elsie Sheng - Morgan Stanley Operator Hello, ladies and gentlemen, thank you for standing by for the RYB Education, Inc.'s Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question-and-ans ...