Insolvent, the elite education of "Hermès" in the education and training industry must lead the transformation of 5,000 employees

Intern journalist | Chen Zhenfang

The long-dormant elite education (ONE.US) has spoken of transformation.

Elite Education announced on January 6 that it will lead about 5,000 employees to transform into new businesses such as going overseas, intelligent student ID cards and intelligent training systems.

After the promulgation of the "double reduction" policy, Elite Education has experienced a series of storms such as parents' lack of refunds, arrears of employee wages, and suspension of business.

On October 12, 2021, Elite Education shut down its domestic education programs and learning centers. Only early childhood education and online businesses remain that have not been completely shut down. On the same day, Elite Education suspended trading in the U.S. stock market, issued an internal letter announcing the closure of business, and set up a special reception team to deal with the arrears of parents and employees.

Founded in 2008, Elite Education was one of the leading enterprises in the K12 education and training industry. Engaged in high-end K12 after-school tutoring education business, there are elite VIP, elite children's education and elite online three major businesses, class hours are not cheap, known as education and training "Hermès", is currently owed hundreds of thousands of yuan, millions of yuan tuition parents are not in the minority.

For the fiscal year ended August 31, 2021, the estimated revenue and assets of the elite education online business were approximately $15.7 million and $10.99 million, respectively. Estimated revenue and assets in the children's education business are approximately $60 million and $109.8 million, respectively.

The company expects that the two segments will account for approximately 20 percent of total revenue and 15 percent of total assets, respectively.

Elite Education announced that it discussed with the Shanghai Municipal Education Commission to end the suspension of business and carry out a new business model. In the future, the company will carry out the following three non-disciplinary businesses:

First, provide online education and counseling services for overseas students teaching subjects such as Chinese and mathematics, and provide overseas education preparation and planning services for students in China. In addition, business opportunities related to vocational education and training and homeschooling will be explored.

Second, in terms of smart hardware, the Elite Education Program commercializes the Smart Student ID, which is capable of tracking students' attendance in real time and automatically notifying administrators when students exhibit dangerous or strange behavior.

Third, the company also plans to build an intelligent training system that incorporates VR, artificial intelligence, blockchain and other technologies to facilitate the teaching and training process.

Elite Education has unaudited cash and equivalents of about US$41 million and US$109.9 million in assets, deferred income according to the pre-mine financial report, and about 2.7 billion yuan of tuition debt that has not been paid off, which is seriously insolvent, and how to protect the rights and interests of creditors in the absence of bankruptcy reorganization?

Interface Education found that the current refund entrance of Elite Education can not be filled out, and the reason for the page display is: the questionnaire publisher has not purchased the enterprise version or has expired.

As of now, Elite Education has not released its annual financial report for the year ended 31 August 2021, and EY Huaming Co., Ltd. has resigned as an independent certified public accountant of the company. EY said that after a series of personnel changes, Eason Zhou, vice president of finance of Elite Education, became the de facto chief financial officer, and Mr. Zhou was in serious health in August, and his subordinates were unable to provide the requested information to EY in a timely manner.

On December 9, 2021, with the approval of the Audit Committee, Elite Education has engaged PAC as the Company's independent registered public accounting firm to audit the Company's consolidated financial statements for the financial year ended August 31, 2021.