• Key Excerpts
  • VIE Structure
  • VIE Risks
  • VIE Revenue
  1. Represents the 10,862,689 ordinary shares Ascendent has the right to acquire from RYB Education Limited, and is subject to adjustment. Please refer to the beneficial ownership table in the section captioned "Principal and Selling Shareholders" for more information on beneficial ownership of Ascendent in our company prior to and immediately after this offering.
  2. Represents the 6,759,859 ordinary shares Mr. Chimin Cao beneficially owns as of the date of this prospectus. Please refer to the beneficial ownership table in the section captioned "Principal and Selling Shareholders" for more information on Mr. Cao's beneficial ownership in our company prior to and immediately after this offering.
  3. Represents the 16,005,618 ordinary shares Ms. Yanlai Shi beneficially owns as of the date of this prospectus. Please refer to the beneficial ownership table in the section captioned "Principal and Selling Shareholders" for more information on Ms. Shi's beneficial ownership in our company prior to and immediately after this offering.
  4. Ms. Yanlai Shi is the legal representative of our VIE and oversees its daily operations. Our VIE, through its subsidiaries and sponsored kindergartens, owns and controls the operations of our kindergartens, play-and-learn centers, franchise business and other business in China.
  5. We expect our VIE to have the same shareholding structure immediately after the completion of this offering.
  6. Beijing RYB, directly or through its subsidiaries, is the sole sponsor of Beijing Fengtai District RYB Education Training School and 63 out of 81 of our directly operated kindergartens, and it holds a majority of sponsored interest in the remaining 18 of our directly operated kindergartens. Under the PRC laws and regulations, the economic substance of "sponsorship" in respect of private schools is substantially similar to that of ownership with respect to legal, regulatory and tax matters.
  7. The remaining 40% equity interest in this company is owned by an unrelated third party.

Key excerpts from filing(s) - related to VIEs

...foreign investments in preschool education is restricted to cooperation with PRC domestic parties who are required to play a dominant role in the cooperation.
We are a Cayman Islands company and our PRC subsidiary is currently considered a foreign-invested enterprise. Accordingly, our PRC subsidiary is not eligible to control the operation of kindergarten business. To ensure strict compliance with the PRC laws and regulations, we conduct such business activities through Beijing RYB, our consolidated variable interest entity, or VIE, and its subsidiaries.
RYB Technology, our wholly owned subsidiary in China, has entered into a series of contractual arrangements with our VIE and its shareholders, which enable us to (1) exercise effective control over our VIE, (2) receive substantially all of the economic benefits of our VIE, and (3) have an exclusive option to purchase all or part of the equity interests and assets in our VIE when and to the extent permitted by PRC law.
These contractual arrangements may not be as effective as direct ownership in providing us with control over our VIE.
The shareholders of our VIE may have actual or potential conflicts of interest with us. These shareholders may refuse to sign or breach, or cause our VIE to breach, or refuse to renew, the existing contractual arrangements we have with them and our VIE, which would have a material and adverse effect on our ability to effectively control our VIE and receive economic benefits from it.

Risks identified in filing(s) - related to VIEs

If the PRC government finds that the agreements that establish the structure for operating some of our operations in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
Our business may be significantly affected by the Draft Foreign Investment Law, if implemented as proposed.
We rely on contractual arrangements with our VIE and its shareholders for a large portion of our business operations—including the operation of kindergartens as well as franchise of kindergartens and play-and-learn centers—which may not be as effective as direct ownership in providing operational control.
Any failure by our VIE or its shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business.
The shareholders of our VIE may have actual or potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.
Contractual arrangements in relation to our VIE may be subject to scrutiny by the PRC tax authorities and they may determine that we or our VIE owe additional taxes, which could negatively affect our financial condition and the value of your investment.
We may lose the ability to use and enjoy assets held by our VIE that are material to the operation of certain portions of our business if the entity goes bankrupt or becomes subject to a dissolution or liquidation proceeding.
Our VIE and its subsidiaries may be subject to limitations on their ability to operate kindergartens or make payments to related parties.
Year Total Revenue VIEs Revenue Contribution of VIEs %
USD (in millions)
2014 65 63 96.92%
2015 83 82 98.80%
2016 109 108 99.08%

Ownership and Voting power details

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