On January 18, Ruisi Education (NASDAQ:REDU) announced that the NASDAQ Listing Qualification Department informed the company on January 11, 2022, that the company needed to apply for a hearing by the NASDAQ hearing team in a timely manner, otherwise the company's securities would be delisted.
At the same time, the NASDAQ Listing Qualification Department determined that Ruisi Education has become an "open shell" as defined in NASDAQ Listing Rule 5101. Previously, on December 30, 2021, Ruisi Education had sold most of its assets. Ruisi Education said it is actively pursuing strategic business opportunities, including business activities that will generate revenue.
Regarding the former, Rhys Education said it filed its interim balance sheet and income statement with the U.S. Securities and Exchange Commission on January 11, 2022, as of June 30, 2021, thus re-complying with NASDAQ Listing Rule 5250. In addition, Ruisi Education has applied to hold a hearing and will submit proof of compliance with the qualification requirements of the listed company.
According to Ritz Education, the Board of Directors of the Company received a non-binding business consolidation proposal (the "Proposed Transaction") on January 6, 2022. Under the proposal, the other party would contribute its business in the EV ecosystem in exchange for a newly issued stake in the company.
However, Ruisi Education did not disclose the counterparty information of the proposed transaction. However, according to the announcement, the two sides have agreed to conduct exclusivity negotiations for a period of 28 days from January 17, 2022, which can also be further extended by 14 days. Ritz Education added that there is no guarantee that the proposed transaction or any other similar transaction will be approved or completed.
According to Bedo Finance, Ruisi Education, formerly known as Ruisi English, is an online education company listed on the NASDAQ in the United States in November 2017 with an issue price of 14.5 US dollars per share. As of the close of U.S. stocks on January 218, 2022, Ruisi Education closed at $0.5333 per share, with a total market capitalization of $30.1223 million.
In 2016, 2017, 2018, 2019 and 2020, the total revenue of Ruisi English was 711 million yuan, 969 million yuan, 1.272 billion yuan, 1.529 billion yuan and 958 million yuan, respectively, and the corresponding net profit was 53.923 million yuan, -47.974 million yuan, 143 million yuan, 148 million yuan and -132 million yuan, respectively.
Recently, Ruisi Education also announced its unaudited financial results for the second quarter of 2021 ended June 30, 2021. In the second quarter of 2021, Ruisi Education achieved revenue of 257 million yuan, an increase of 55.6% year-on-year, and recorded a net loss of 52.662 million yuan, narrowing by 9.3% year-on-year.
From January to June 2021 (first half of the year), Ruisi Education achieved revenue of 518 million yuan, an increase of 89.1% year-on-year. In the second quarter of 2021, a total of 10,372 new students enrolled in the course. During the period, 40,728 students participated in regular courses, a decrease of 9,844 year-on-year.
It is worth mentioning that Ruisi English also announced a personnel change in early January 2022. According to the announcement of Ruisi Education, Sun Yiding resigned as vice chairman of the board of directors of the company for personal reasons. At the same time, Chen Yong decided to resign as an independent director of the company for personal reasons.
It is understood that Sun Yiding was formerly the CEO of Ruisi Education, and once led Ruisi Education to successfully go public in the United States. In January 2020, Ruisi Education appointed its chairman (chairman) Wang Lihong as the new CEO, and the former CEO Sun Yiding will remain as vice chairman of the board of directors after his retirement.
Prior to this, Ruisi Education announced the brand and business upgrade in May 2021, adding three major businesses of "Randian Science Museum", "Ruisi Haiya Growth Space" and "Ruisi Research", which together with its subsidiaries Ruisi English and Lingfeng Education constitute Ruisi quality education solutions.
Among them, Wang Lihong has released the development plan path of Ruisi Education in the next three years, namely: breakthrough and upgrading in 2021, completing OMO transformation, brand upgrading, and expanding waterways; integrating and expanding in 2022, realizing platform scale, and completing diversified and multi-dimensional and multi-format formats; and becoming a leader in the field of quality education in 2023, with comprehensive ecological development.
Now it seems that what Wang Lihong expected has not been realized.
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