China Rapid Finance Announces Review Of Strategic Altenatives
May 28 19
China Rapid Finance Limited (NYSE:XRF) announced that its Board of Directors has commenced a comprehensive review of strategic alternatives to maximize shareholder value, which could result in a merger or sale of the company or other transaction involving the company or its assets. XRF is engaged in formal discussions with several parties that have expressed interest in a potential transaction. The company cautions that there can be no assurance that any transaction will be approved or consummated. The company does not intend to disclose developments relating to its strategic review unless and until the Board of Directors has approved a specific agreement or transaction or has terminated its review of strategic alternatives.
China Rapid Finance Limited Announces Changes to its Board of Directors
May 17 19
China Rapid Finance Limited announced changes to its board of directors. Effective April 12, 2019, the Board has appointed Mr. Edward Yan as an independent director and Chair of the Audit Committee and has also appointed Chief Financial Officer Mr. Steven Foo to the Board as an executive director. Mr. Zhou Ji'an resigned from the Board for personal reasons effective April 29, 2019.
China Rapid Finance Announces Reasons For Delay In Filing Of Its Annual Report And Receipt Of Continued Listing Letters From NYSE
May 17 19
On May 8, 2019, the China Rapid Finance Limited received a notice from the NYSE that the Company is not in compliance with the NYSE's continued listing standard with respect to the minimum average share price required by the NYSE because the average closing price of its ADSs had fallen below $1.00 per share over a period of 30 consecutive trading days. Under the NYSE standards, the Company has six months following receipt of the notification to regain compliance with the minimum share price requirement. The Company can regain compliance during the six-month cure period if on the last trading day of any calendar month during the period or on the last trading day of the period, the Company's ADSs have a closing share price of at least $1.00 per share and an average closing share price of at least $1.00 per share over the previous 30 consecutive day trading period. The Company intends to cure the price deficiency and return to compliance with the NYSE continued listing requirement within the applicable cure period. As required by the NYSE, the Company will notify the NYSE of its intent to cure. During this period, the Company's ADSs will continue to be traded on the NYSE, subject to compliance with other continued NYSE listing requirements. The NYSE notification does not affect the Company's business operations or its Securities and Exchange Commission reporting requirements and does not conflict with or cause an event of default under any of the Company's material agreements. On April 30, 2019, the Company filed a Form 12b-25 to extend the deadline for the timely filing of the Annual Report. The Company has been unable to file the Annual Report by the extended deadline of May 15, 2019, and is therefore not in compliance with the continued listing requirements under the timely filing criteria established in Section 802.01E of the NYSE Listed Company Manual. On May 16, 2019, the Company received a notice from the NYSE noting such non-compliance. This delay is the result of the recent change in the Company's finance department personnel, including the Chief Financial Officer, as well as the need to resolve issues relating to, among others, consolidation of a VIE entity's financial statements and other prior period adjustments that will likely result in the need to restate prior period financial statements. In particular, the Company expects that it will need to restate its quarterly results for the three months ended March 31, 2018, June 30, 2018 and September 30, 2018 that had previously been announced, and such results should not be relied upon by investors. The prior period adjustments are expected to relate to (i) accounting treatment on transition from the previous Safeguard Program to the loyalty incentive program for lifestyle loan in February 2018 (i.e., recognition of the termination of the previous Safeguard Program, and recognition of the new loyalty incentive program as refund liability), (ii) recognition of lenders' virtual accounts' funds held in custodian banks as restricted cash on balance sheet, which were previously treated as off-balance sheet items, (iii) accounting for coupon expenses paid to investors as a deduction of revenue instead of sales and marketing expenses, and (iv) consolidation of a VIE entity since the second half of 2018. In accordance with NYSE rules, the Company will have six months from the required filing due date to comply with the NYSE listing standards (which period may be extended at the discretion of the NYSE). The Company can regain compliance at any time during this six-month period by filing the Annual Report. In the interim, the Company's American Depositary Shares (ADSs) will continue to trade on the NYSE, subject to compliance with other continued listing requirements, and to ongoing oversight by the NYSE. The Company will continue to endeavor to file the Annual Report and restated quarterly reports for the periods noted above as soon as it is able to resolve the issues.