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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2023

Commission File Number: 001-34824

Ambow Education Holding Ltd.

Not Applicable

(Translation of Registrant’s name into English)

Cayman Islands

(Jurisdiction of incorporation or organization)

19925 Stevens Creek Blvd, Cupertino, CA 95014

United States of America

Telephone: +1 (628) 888-4587

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Other Information

Attached hereto as Exhibit 99.1 is a press release dated November 28, 2023, announcing the Company’s unaudited financial and operating results for the three months and six months ended June 30, 2023.

The information contained in Exhibits 99.2 and 99.3 on Form 6-K is hereby incorporated by reference into the Company’s registration statement on Form F-3 (File No. 333-264878), and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished.

Exhibits

99.1 Press Release, dated November 28, 2023

99.2 Unaudited Condensed Consolidated Financial Statements as of and for the Six Months Ended June 30, 2022 and 2023 and Notes to the Unaudited Condensed Consolidated Financial Statements as of and for the Six Months Ended June 30, 2022 and 2023

99.3 Management Discussion and Analysis of Financial Condition and Results of Operations

101.INS XBRL Instance Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.SCH XBRL Taxonomy Extension Schema Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

101.LAB XBRL Taxonomy Extension Labels Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Ambow Education Holding Ltd.

 

 

 

By:

/s/Jin Huang

 

Name: Dr. Jin Huang

 

Title: President and Chief Executive Officer

Date: November 28, 2023

Exhibit 99.1

Ambow Education Announces Second Quarter and First Half of 2023 Financial Results

CUPERTINO, Calif., November 28, 2023 /PRNewswire/ -- Ambow Education Holding Ltd. (“Ambow” or the “Company”) (NYSE American: AMBO), a technology-driven educational company with primary operations in the United States, today announced its unaudited financial and operating results for the three-month and six-month periods ended June 30, 2023.

“We are at the forefront of emerging trends in education, indicating a shift towards an integrated, AI-driven hybrid model encompassing both education and workforce training," said Dr. Jin Huang, President, Chief Executive Officer, and acting Chief Financial Officer of Ambow. "Over the last six months, we have closed underperforming business units and redirected our focus toward the development and deployment of our HybriU AI solution. As a result, in the first half of 2023, we witnessed a substantial improvement in profit margins, successfully narrowing our operating loss by an impressive 50%. Since its official launch in July, the HybriU AI digital education solution has been successfully deployed in classrooms throughout NewSchool Architecture & Design in San Diego, Calif., facilitating a seamless, cutting-edge AI hybrid learning model. Looking ahead, we are actively expanding our HybriU initiatives with partnerships in various institutions, leading colleges, universities, and corporations to drive the next stage of Ambow’s growth. We are optimistic about our prospects for the next year. Our turnaround efforts are yielding results as the HybriU AI solution continues to gain traction, and we expect to achieve operating profitability in 2024.”

Second Quarter 2023 Financial Highlights

Net revenues for the second quarter of 2023 decreased by 46.0% to $2.7 million from $5.0 million for the same period of 2022. The decrease was primarily due to the permanent closure of Bay State College at the end of the 2022-2023 academic year.
Gross profit for the second quarter of 2023 decreased by 20.0% to $1.2 million from $1.5 million for the same period of 2022. Gross profit margin was 44.4%, compared with 30.0% for the second quarter of 2022.
Operating expenses for the second quarter of 2023 decreased by 47.4% to $2.0 million from $3.8 million for the same period of 2022. The decrease was primarily due to the Company’s issuance of 5.2 million shares of fully vested restricted stock units to senior management and key employees as compensation during the second quarter of 2022, and stringent expense controls to improve operating efficiency.
Operating loss for the second quarter of 2023 was $0.8 million, compared to an operating loss of $2.3 million for the same period of 2022.
Net loss attributable to ordinary shareholders from continuing operations for the second quarter of 2023 was $1.0 million, or $0.02 per basic and diluted share, compared with a net loss from continuing operations of $2.5 million, or $0.05 per basic and diluted share, for the same period of 2022.
As of June 30, 2023, Ambow maintained strong cash resources of $12.4 million, comprising cash and cash equivalents of $6.9 million and restricted cash of $5.5 million.

First Six Months 2023 Financial Highlights

Net revenues for the first six months of 2023 decreased by 37.1% to $6.1 million from $9.7 million for the same period of 2022. The decrease was primarily due to the permanent closure of Bay State College at the end of the 2022-2023 academic year.
Gross profit for the first six months of 2023 decreased by 16.7% to $2.0 million from $2.4 million for the same period of 2022. Gross profit margin was 32.8%, compared with 24.7% for the same period of 2022.
Operating expenses for the first six months of 2023 decreased by 40.0% to $3.9 million from $6.5 million for the same period of 2022. The decrease was primarily due to the Company's issuance of 5.2 million shares of fully

vested restricted stock units to senior management and key employees as compensation during the three months ended June 30, 2022, and stringent expense controls to improve operating efficiency. Also, the permanent closure of Bay State College at the end of the 2022-2023 academic year has led to lower expenses.
Operating loss for the first six months of 2023 was $1.9 million, compared to an operating loss of $4.1 million for the same period of 2022.
Net loss attributable to ordinary shareholders from continuing operations for the first six months of 2023 was $2.2 million, or $0.04 per basic and diluted share, compared with a net loss from continuing operations of $4.4 million, or $0.10 per basic and diluted share, for the same period of 2022.

The Company’s financial and operating results for the second quarter and first half of 2023 can also be found on its Report of Foreign Private Issuer on Form 6-K, to be furnished with the U.S. Securities and Exchange Commission at www.sec.gov.

Exchange Rate Information

Historically, Ambow presented its financial results in Renminbi. Starting on January 1, 2023, Ambow changed its reporting currency from Renminbi to U.S. dollars, as the majority of Ambow’s revenues and expenses are now denominated in U.S. dollars. Ambow believes the alignment of the reporting currency with its underlying operations better illustrates its operational results for each period. Ambow has applied the change of reporting currency retrospectively to its historical results of operations and financial statements included in this press release.

Bay State College Closure

On January 19, 2023, the New England Commission of Higher Education (“NECHE”) informed Bay State College (“BSC”) of its intention to withdraw BSC’s accreditation as of August 31, 2023. Following the rejection of Ambow’s appeal, on April 11, 2023, the Board of Trustees voted to permanently close Bay State College at the end of the 2022-2023 academic year. Accordingly, this permanent closer has been completed. The College provided academic support and transitional services to students through August 31, 2023, and signed agreements with several area universities to provide program completion pathways to Bay State students, often with enhanced transfer and other opportunities.

Subsequent Events

Ambow received a continued listing deficiency notice (the “Notice”) from the NYSE American LLC (the “NYSE American”) dated September 21, 2023, stating that the Company’s securities had been selling for a low price per share for a substantial period of time and the Company is not in compliance with the continued listing standards as set forth in Section 1003(f)(v) of the NYSE American Company Guide (“Company Guide”). NYSE American staff determined that Ambow’s continued listing is predicated on it effecting a reverse stock split of its common stock or otherwise demonstrating sustained price improvement no later than March 21, 2024. The Company intends to complete a reverse stock split in order to regain compliance with the NYSE American’s continued listing standards set forth in the Company Guide in a timely manner.

About Ambow

Ambow Education Holding Ltd. is an AI technology-driven educational company with primary operations in the United States. Through the operation of its for-profit colleges and dynamic patented open platform technology, Ambow offers high-quality, individualized, and dynamic career education services and products. For more information, visit Ambow's website at https://www.ambow.com/.

Follow us on Twitter:@Ambow_Education


Safe Harbor Statement

This press release contains statements of a forward-looking nature. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as “will,” “expects,” “believes,” “anticipates,” “intends,” “estimates” and similar statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about Ambow and the industry. All information provided in this press release is as of the date hereof, and Ambow undertakes no obligation to update any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although Ambow believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.

For more information, please contact:

Ambow Education Holding Ltd.
E-mail: ir@ambow.com

or

Piacente Financial Communications
Tel: +1-212-481-2050
E-mail: ambow@tpg-ir.com


AMBOW EDUCATION HOLDING LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except for share and per share data)

    

As of December 31,

    

As of June 30,

2022

2023

    

$

    

$

Unaudited

ASSETS

 

  

 

  

Current assets:

 

  

 

  

Cash and cash equivalents

 

3,276

 

6,913

Restricted cash

 

4,320

 

5,490

Accounts receivable, net

 

1,958

 

3,690

Prepaid and other current assets

 

6,119

 

4,230

Total current assets

 

15,673

 

20,323

Non-current assets:

 

  

 

  

Property and equipment, net

 

274

 

19

Intangible assets, net

 

532

 

527

Operating lease right-of-use asset

 

6,842

 

5,946

Other non-current assets

 

1,951

 

1,944

Total non-current assets

 

9,599

 

8,436

Total assets

 

25,272

 

28,759

LIABILITIES

 

  

 

  

Current liabilities:

 

  

 

  

Short-term borrowings

 

3,000

 

5,439

Accounts payable

 

2,409

 

1,957

Accrued and other liabilities

 

3,702

 

6,080

Income taxes payable

 

523

 

510

Operating lease liability, current

 

2,197

 

2,451

Total current liabilities

 

11,831

 

16,437

Non-current liabilities:

 

  

 

  

Operating lease liability, non-current

 

5,688

 

4,900

Total non-current liabilities

 

5,688

 

4,900

Total liabilities

 

17,519

 

21,337

EQUITY

 

  

 

  

Preferred shares

 

  

 

  

($0.003 par value;1,666,667 shares authorized, nil issued and outstanding as of December 31, 2022 and June 30, 2023)

 

 

Class A Ordinary shares

 

  

 

  

($0.003 par value; 66,666,667 and 66,666,667 shares authorized, 47,419,109 and 52,419,109 shares issued and outstanding as of December 31, 2022 and June 30, 2023, respectively)

 

131

 

146

Class C Ordinary shares

 

  

 

  

($0.003 par value; 8,333,333 and 8,333,333 shares authorized, 4,708,415 and 4,708,415 shares issued and outstanding as of December 31, 2022 and June 30, 2023, respectively)

 

13

 

13

Additional paid-in capital

 

515,182

 

517,031

Accumulated deficit

 

(507,573)

 

(509,768)

Accumulated other comprehensive income

 

 

Total equity

 

7,753

 

7,422

Total liabilities and equity

 

25,272

 

28,759


AMBOW EDUCATION HOLDING LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(All amounts in thousands, except for share and per share data)

    

For the six months ended 

    

For the three months ended 

June 30,

June 30,

2022

2023

2022

2023

    

$

    

$

    

$

    

$

NET REVENUES

 

  

 

  

 

  

 

  

Educational programs and services

 

9,724

 

6,097

 

4,955

 

2,728

COST OF REVENUES

 

  

 

  

 

  

 

  

Educational programs and services

 

(7,364)

 

(4,082)

 

(3,449)

 

(1,508)

 

  

 

  

 

  

 

  

GROSS PROFIT

 

2,360

 

2,015

 

1,506

 

1,220

Operating expenses:

 

  

 

  

 

  

 

  

Selling and marketing

 

(1,170)

 

(425)

 

(486)

 

(148)

General and administrative

 

(5,288)

 

(3,449)

 

(3,273)

 

(1,829)

Total operating expenses

 

(6,458)

 

(3,874)

 

(3,759)

 

(1,977)

OPERATING LOSS

 

(4,098)

 

(1,859)

 

(2,253)

 

(757)

OTHER EXPENSES

 

  

 

  

 

  

 

  

Interest expense, net

 

(72)

 

(33)

 

(33)

 

(26)

Foreign exchange loss, net

 

 

(9)

 

 

(9)

Other expense, net

 

(134)

 

(281)

 

(87)

 

(196)

Loss on disposal of subsidiaries

 

(173)

 

 

(173)

 

Total other expense

 

(379)

 

(323)

 

(293)

 

(231)

LOSS BEFORE INCOME TAX AND NON-CONTROLLING INTEREST

 

(4,477)

 

(2,182)

 

(2,546)

 

(988)

Income tax benefit (expense)

 

34

 

(13)

 

34

 

(13)

LOSS FROM CONTINUING OPERATIONS

 

(4,443)

 

(2,195)

 

(2,512)

 

(1,001)

Loss from discontinued operations, net of income tax

 

(9,467)

 

 

(8,642)

 

NET LOSS

 

(13,910)

 

(2,195)

 

(11,154)

 

(1,001)

-Less: Net loss attributable to non-controlling interests from continuing operations

 

 

 

 

-Less: Net loss attributable to non-controlling interests from discontinued operations

 

(180)

 

 

(134)

 

NET LOSS ATTRIBUTABLE TO ORDINARY SHAREHOLDERS FROM CONTINUING OPERATIONS

 

(4,443)

 

(2,195)

 

(2,512)

 

(1,001)

NET LOSS ATTRIBUTABLE TO ORDINARY SHAREHOLDERS FROM DISCONTINUED OPERATIONS

 

(9,287)

 

 

(8,508)

 

NET LOSS ATTRIBUTABLE TO ORDINARY SHAREHOLDERS

 

(13,730)

 

(2,195)

 

(11,020)

 

(1,001)

OTHER COMPREHENSIVE LOSS, NET OF TAX

 

  

 

  

 

  

 

  

Foreign currency translation adjustments

 

(166)

 

 

(90)

 

Other comprehensive loss

 

(166)

 

 

(90)

 

TOTAL COMPREHENSIVE LOSS

 

(14,076)

 

(2,195)

 

(11,244)

 

(1,001)

Net loss from continuing operations per share – basic and diluted

 

(0.10)

 

(0.04)

 

(0.05)

 

(0.02)

Net loss from discontinued operations per share – basic and diluted

 

(0.20)

 

 

(0.18)

 

Weighted average shares used in calculating basic and diluted net loss per share

 

46,756,368

 

55,525,314

 

46,825,968

 

57,127,524


0.100.040.020.050.200.18467563685552531457127524468259685241910947419109004708415470841554390005439000

AMBOW EDUCATION HOLDING LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except for share and per share data)

    

    

As of December 31, 

As of June 30, 

    

Note

    

2022

2023

    

    

$

    

$

Note 3(a)

Unaudited

ASSETS

 

  

 

  

Current assets:

 

  

 

  

Cash and cash equivalents

 

4

 

3,276

 

6,913

Restricted cash

 

4

 

4,320

 

5,490

Accounts receivable, net

 

5

 

1,958

 

3,690

Prepaid and other current assets

 

6

 

6,119

 

4,230

Total current assets

 

 

15,673

 

20,323

Non-current assets:

 

  

 

Property and equipment, net

 

 

274

 

19

Intangible assets, net

 

 

532

 

527

Other non-current assets

 

7

 

1,951

 

1,944

Operating lease right-of-use asset

14

6,842

5,946

Total non-current assets

 

9,599

 

8,436

Total assets

 

25,272

 

28,759

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-2

AMBOW EDUCATION HOLDING LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(All amounts in thousands, except for share and per share data)

    

    

As of December 31, 

As of June 30, 

    

Note

    

2022

    

2023

    

    

$

    

$

Note 3(a)

Unaudited

LIABILITIES

 

  

 

  

 

  

Current liabilities:

 

  

 

  

 

  

Short-term borrowings

8

3,000

5,439

Accounts payable

2,409

1,957

Accrued and other liabilities

9

3,702

6,080

Income taxes payable

523

510

Operating lease liability, current

14

2,197

2,451

Total current liabilities

 

  

 

11,831

 

16,437

Non-current liabilities:

 

  

 

  

 

Operating lease liability, non-current

14

5,688

4,900

Total non-current liabilities

 

  

 

5,688

 

4,900

 

  

 

 

Total liabilities

 

  

 

17,519

 

21,337

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-3

AMBOW EDUCATION HOLDING LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(All amounts in thousands, except for share and per share data)

    

As of December 31, 

As of June 30, 

    

2022

    

2023

    

$

    

$

Note 3(a)

Unaudited

Commitments and contingencies

EQUITY

 

  

 

  

Preferred shares

 

  

 

  

($ 0.003 par value; 1,666,667 shares authorized, nil issued and outstanding as of December 31, 2022 and June 30, 2023)

 

Class A Ordinary shares

 

 

($ 0.003 par value; 66,666,667 and 66,666,667 shares authorized; 47,419,109 and 52,419,109 shares issued and outstanding as of December 31, 2022 and June 30, 2023, respectively)

10

131

 

146

Class C Ordinary shares

 

 

($ 0.003 par value; 8,333,333 and 8,333,333 shares authorized; 4,708,415 and 4,708,415 shares issued and outstanding as of December 31, 2022 and June 30, 2023, respectively)

 

13

 

13

Additional paid-in capital

515,182

 

517,031

Accumulated deficit

(507,573)

 

(509,768)

Accumulated other comprehensive income

 

Total equity

7,753

 

7,422

Total liabilities and equity

25,272

 

28,759

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-4

AMBOW EDUCATION HOLDING LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(All amounts in thousands, except for share and per share data)

    

    

For the six months ended June 30, 

For the three months ended June 30, 

    

Note

    

2022

    

2023

    

2022

    

2023

    

    

$

    

$

    

$

$

NET REVENUES

Educational programs and services

 

 

9,724

 

6,097

4,955

2,728

COST OF REVENUES

 

 

Educational programs and services

 

 

(7,364)

 

(4,082)

(3,449)

(1,508)

 

 

GROSS PROFIT

 

2,360

 

2,015

1,506

1,220

Operating expenses:

 

 

Selling and marketing

 

(1,170)

 

(425)

(486)

(148)

General and administrative

 

(5,288)

 

(3,449)

(3,273)

(1,829)

Total operating expenses

 

(6,458)

(3,874)

(3,759)

(1,977)

 

 

OPERATING LOSS

 

(4,098)

(1,859)

(2,253)

(757)

 

 

OTHER EXPENSES

 

 

Interest expense, net

 

 

(72)

(33)

(33)

(26)

Foreign exchange loss, net

 

(9)

(9)

Other expenses, net

 

(134)

(281)

(87)

(196)

Loss on disposal of subsidiaries

(173)

(173)

Total other expenses

 

(379)

(323)

(293)

(231)

 

 

LOSS BEFORE INCOME TAX AND NON-CONTROLLING INTERESTS

 

(4,477)

 

(2,182)

(2,546)

(988)

Income tax benefit (expense)

 

12

 

34

(13)

34

(13)

 

 

LOSS FROM CONTINUING OPERATIONS

(4,443)

(2,195)

(2,512)

(1,001)

Loss from discontinued operations, net of income tax

(9,467)

(8,642)

 

 

NET LOSS

 

(13,910)

(2,195)

(11,154)

(1,001)

-Less: Net loss attributable to non-controlling interests from continuing operations

 

-Less: Net loss attributable to non-controlling interests from discontinued operations

(180)

(134)

 

 

NET LOSS ATTRIBUTABLE TO ORDINARY SHAREHOLDERS FROM CONTINUING OPERATIONS

 

(4,443)

(2,195)

(2,512)

(1,001)

NET LOSS ATTRIBUTABLE TO ORDINARY SHAREHOLDERS FROM DISCONTINUED OPERATIONS

 

(9,287)

(8,508)

 

 

NET LOSS ATTRIBUTABLE TO ORDINARY SHAREHOLDERS

(13,730)

(2,195)

(11,020)

(1,001)

OTHER COMPREHENSIVE LOSS, NET OF TAX

 

 

Foreign currency translation adjustments

 

(166)

(90)

Other comprehensive loss

 

(166)

(90)

TOTAL COMPREHENSIVE LOSS

 

(14,076)

(2,195)

(11,244)

(1,001)

 

 

Net loss from continuing operations per share - basic and diluted

13

 

(0.10)

(0.04)

(0.05)

(0.02)

Net loss from discontinued operations per share - basic and diluted

 

 

(0.20)

 

 

(0.18)

 

  

 

  

 

Weighted average shares used in calculating basic and diluted net loss per share

 

13

 

46,756,368

55,525,314

46,825,968

57,127,524

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-5

AMBOW EDUCATION HOLDING LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(All amounts in thousands, except for share and per share data)

    

    

Attributable to Ambow Education Holding Ltd.’s Equity

Accumulated

Class A Ordinary

Class C Ordinary

Additional

other

Non-

shares

shares

paid-in

Statutory

Accumulated

comprehensive

controlling

Total

Note

Shares

Amount

Shares

Amount

capital

reserves

deficit

income

interest

Equity

    

    

    

$

    

    

$

    

$

    

$

    

$

    

$

    

$

    

$

Balance as of January 1, 2023

 

  

 

47,419,109

131

4,708,415

13

515,182

(507,573)

7,753

Issuance of ordinary shares and warrants to purchase ordinary shares

 

10

 

5,000,000

15

1,849

1,864

Net loss

 

 

(1,194)

(1,194)

Balance as of March 31, 2023

52,419,109

146

4,708,415

13

517,031

(508,767)

8,423

Net loss

(1,001)

(1,001)

Balance as of June 30, 2023

52,419,109

146

4,708,415

13

517,031

(509,768)

7,422

Balance as of January 1, 2022

41,973,276

115

4,708,415

13

514,116

556

(495,240)

1,637

70

21,267

Share-based compensation

11

31

31

Issuance of ordinary shares for restricted stock award

11

12,500

0

(0)

Foreign currency translation adjustment

(76)

(76)

Capital injection from minority shareholders

15

15

Net loss

(2,710)

(46)

(2,756)

Balance as of March 31, 2022

41,985,776

115

4,708,415

13

514,147

556

(497,950)

1,561

39

18,481

Share-based compensation

11

1,006

1,006

Issuance of ordinary shares for restricted stock award

11

5,412,500

16

(16)

Foreign currency translation adjustment

(90)

(90)

Disposal of subsidiaries (OOOK)

94

94

Capital injection from minority shareholders

7

7

Net loss

 

  

 

(11,020)

(134)

(11,154)

Balance as of June 30, 2022

 

  

 

47,398,276

131

4,708,415

13

515,137

556

(508,970)

1,471

6

8,344

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-6

AMBOW EDUCATION HOLDING LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(All amounts in thousands)

For the six months ended June 30, 

    

2022

    

2023

$

$

Cash flows from operating activities

  

Net cash used in operating activities, continuing operations

 

(3,246)

 

(2,933)

Net cash used in operating activities, discontinued operations

 

(2,427)

 

Cash flows from investing activities

 

  

 

  

Net cash (used in)/provided by investing activities, continuing operations

 

 

Net cash used in investing activities, discontinued operations

(11,082)

Cash flows from financing activities

 

  

 

  

Proceeds from issuance of ordinary shares and warrants to purchase ordinary shares

 

 

1,864

Proceeds from short-term borrowings

 

2,439

Proceeds from third-party loans

 

 

3,450

Net cash provided by financing activities, continuing operations

 

 

7,753

Net cash provided by financing activities, discontinued operations

2,536

 

Effects of exchange rate changes on cash, cash equivalents and restricted cash

 

(78)

 

(13)

Net change in cash, cash equivalents and restricted cash

(14,297)

4,807

Cash, cash equivalents and restricted cash at beginning of periods

 

32,389

 

7,596

Cash, cash equivalents and restricted cash at end of periods

18,092

12,403

Less: Cash, restricted cash and cash equivalents of discontinued operations

 

16,874

 

Cash, cash equivalents and restricted cash at end of year from continuing operations

 

1,218

 

12,403

Supplemental disclosure of cash flow information

 

 

Income tax paid

 

 

(27)

Interest paid

 

 

(74)

Supplemental disclosure of non-cash investing and financing activities:

 

 

Derecognition of assets other than cash of disposed subsidiaries/deregistered subsidiaries

 

67

 

Derecognition of liabilities of disposed subsidiaries/deregistered subsidiaries, net of recognized amount due to the disposed subsidiaries/deregistered subsidiaries

 

141

 

Operating lease right-of-use assets obtained in exchange for new operating lease liabilities

43

129

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-7

AMBOW EDUCATION HOLDING LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except for share and per share data)

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

a.

Background

The accompanying condensed consolidated financial statements include the financial statements of Ambow Education Holding Ltd. (hereafter referred to as the “Company”) and its subsidiaries. The Company and its subsidiaries are hereinafter collectively referred to as the “Group.”

2. LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2023, the Group’s consolidated current assets exceeded its consolidated current liabilities by $ 3,886. The Group’s consolidated net assets were $ 7,422 as of June 30, 2023.

The Group’s principal sources of liquidity have been cash provided by operating activities, bank borrowings, third-party loans, and ordinary share issuances. The Group had net cash used in operating activities from continuing operations of $ 3,246 and $ 2,933 for the six months ended June 30, 2022 and 2023, respectively. As of June 30, 2023, the Group had $ 6,913 in unrestricted cash and cash equivalents.

The Group’s operating results for future periods are subject to numerous uncertainties, and it is uncertain if the Group will be able to achieve a net income position for the foreseeable future. If management is not able to increase revenues and/or manage cost and operating expenses in line with revenue forecasts, the Group may not be able to achieve profitability.

The Group believes that available cash and cash equivalents, short-term investments available for sale and short-term investments held to maturity, cash provided by operating activities, together with cash available from the activities mentioned above, should enable the Group to meet presently anticipated cash needs for at least the next 12 months after the date that the condensed consolidated financial statements are issued, and the Group has prepared the condensed consolidated financial statements on a going concern basis. However, the Group continues to have ongoing obligations, and it expects that it will require additional capital in order to execute its longer-term business plan. If the Group encounters unforeseen circumstances that place constraints on its capital resources, management will be required to take various measures to conserve liquidity, which could include, but not necessarily be limited to, initiating additional public offerings, obtaining credit facilities, streamlining business units, controlling rental, overhead, and other operating expenses and seeking to further dispose of non-cash generating units. Management cannot provide any assurance that the Group will raise additional capital if needed.

Risks and Uncertainties

On January 19, 2023, the New England Commission of Higher Education (“NECHE”) informed Bay State College (“BSC”) of its intention to withdraw BSC’s accreditation as of August 31, 2023. Following the rejection of Ambow’s appeal, on April 11, 2023, the Board of Trustees voted to permanently close Bay State College at the end of the 2022-2023 academic year, and this permanent closer has been completed. The College provided academic, support and transitional services to students through August 31, 2023, and signed agreements with several area universities to provide program completion pathways to Bay State students, often with enhanced transfer and other opportunities.

F-8

3. SIGNIFICANT ACCOUNTING POLICIES

a.

Basis of presentation

The accompanying condensed consolidated financial statements of the Group have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial reporting. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly state the operating results for the respective periods. Certain information and footnote disclosures normally present in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the financial statements and footnotes thereto, included in the Company’s 2022 Annual Report filed with the SEC on April 27, 2023. The interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year or any future periods.

b.

Foreign currency translation

The Group uses US$ as its reporting currency. The functional currency of the Company and its subsidiaries incorporated in the Cayman Islands, United States, is US$. In the consolidated financial statements, the financial information of the Company and its subsidiaries, which use US$ or their respective local currency as their functional currency, have been translated into US$. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, gains, and losses are translated using the average exchange rate for the period. Translation adjustments arising from these are reported as foreign currency translation adjustments and are shown as a component of other comprehensive income or loss in the statement of comprehensive income.

Foreign currency transactions denominated in currencies other than functional currency are translated into functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are remeasured at the applicable rates of exchange in effect at that date. Foreign exchange gains and losses resulting from the settlement of such transactions and from remeasurement at year-end are recognized in foreign currency exchange gains/losses, net in the consolidated statement of comprehensive income.

Historically, we presented our financial results in Renminbi. Starting from January 1, 2023, we changed our reporting currency from Renminbi to U.S. dollars since a majority of our revenues and expenses are now denominated in U.S. dollars. We believe the alignment of the reporting currency with the underlying operations would better illustrate our results of operations for each period. We have applied the change of reporting currency retrospectively to our historical results of operations and financial statements included in this interim report.

c.

Revenue recognition

The Group’s revenue is generated from delivering educational programs and services.

Contract Balances

The transferred control of promised services to customers results in the Group’s unconditional rights and conditional consideration receivable on passage of time. There were no contract assets as of December 31, 2022 and June 30, 2023.

The contract liabilities consist of deferred revenue, which relates to unsatisfied performance obligations at the end of each reporting period and consists of tuition received in advance from students. As of December 31, 2022 and June 30, 2023, the Group’s deferred revenue amounted to nil for both periods.

F-9

d.

Allowance for doubtful accounts

Management used an expected credit loss model under ASC 326 for the impairment of trading receivables as of period ends. Management believes the aging of accounts receivable is a reasonable parameter to estimate expected credit loss and determines expected credit losses for accounts receivables using an aging schedule as of period ends. The expected credit loss rates under each aging schedule were developed on the basis of the average historical loss rates from previous years and adjusted to reflect the effects of those differences in current conditions and forecasted changes. Management measured the expected credit losses of accounts receivable on a collective basis. When an accounts receivable does not share risk characteristics with other accounts receivables, management will evaluate such accounts receivable for expected credit loss on an individual basis. Doubtful accounts balances are written off and deducted from allowance, when receivables are deemed uncollectible, after all collection efforts have been exhausted and the potential for recovery is considered remote.

4. CASH, CASH EQUIVALENTS AND RESTRICTED CASH

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the unaudited condensed consolidated statements of cash flows.

    

As of

December 31, 2022

June 30, 2023

    

$

    

$

Unaudited

Cash and cash equivalents

3,276

6,913

Restricted cash (Note i)

 

4,320

 

5,490

Total cash, cash equivalents, and restricted cash shown in the unaudited condensed consolidated statements of cash flows

 

7,596

 

12,403

(Note i) Restricted cash required by the Department of Education and the deposits necessary to secure lines of credit from financial institutions.

5. ACCOUNTS RECEIVABLE, NET

Accounts receivable consisted of the following:

    

As of 

    

December 31, 2022

    

June 30, 2023

    

$

    

$

Unaudited

Accounts receivable

3,063

5,012

Less: Allowance for doubtful accounts

 

(1,105)

 

(1,322)

Accounts receivable, net

 

1,958

 

3,690

Allowance for doubtful accounts of $ 908 and $ 318 was provided during the six months ended June 30, 2022 and 2023, respectively. Allowance for doubtful accounts in $ 4 and $ 101 was written off during the six months ended June 30, 2022 and 2023, respectively.

F-10

6. PREPAID AND OTHER CURRENT ASSETS

Prepaid and other current assets consisted of the following:

As of 

December 31, 2022

June 30, 2023

    

$

    

$

Unaudited

Receivables for third-party acquisitions (Note i)

6,000

4,000

Prepayments to suppliers

 

103

 

208

Loans to third parties

 

6

 

6

Others

 

10

 

16

Total

 

6,119

 

4,230

(Note i) Representing consideration receivable from the disposal of Ambow China after $8.0 million has been received as of June 30, 2023, and the remaining balance of $4.0 million has been received before the issuance of the condensed consolidated financial statements.

7. OTHER NON-CURRENT ASSETS

Other non-current assets consisted of the following:

As of

December 31,2022

June 30,2023

    

$

    

$

Unaudited

Long-term restricted cash (Note i)

 

1,714

 

1,714

Long-term lease deposits

 

194

 

194

Others

 

43

 

36

Total

 

1,951

 

1,944

(Note i) It includes cash in collateral bank accounts for the issuance of letters of credit.

8. SHORT-TERM BORROWINGS

The following table sets forth the loan agreements of short-term borrowings from banks:

    

    

    

Amount

    

Annual 

    

Repayment 

Date

Borrower

Lender

($)

Interest Rate

Due Date

October 11, 2022

Ambow Education Inc.

Cathy Bank

1,500

4.46

%

October 11, 2023

November 14, 2022

Ambow Education Inc.

EAST WEST BANK

1,500

2.50

%

November 14, 2023

January 6, 2023

 

Ambow Education Inc.

 

EAST WEST BANK

 

2,439

 

2.50

%  

January 6, 2024

In 2022 and January 2023, the Group pledged its restricted cash amount of $ 5,439 to obtain a line of credit of $ 5,439 from Cathy Bank and EAST WEST BANK, respectively. Refer to Note 4-Cash, Cash Equivalents and Restricted Cash.

On October 11, 2022, the Group received a loan from Cathy Bank in the amount of $ 1,500 with a maturity date of October 11, 2023, and bearing interest at 4.46% per annum. On November 14, 2022, the Group received a loan from EAST WEST BANK in the amount of $ 1,500 with a maturity date of November 14, 2023, and bearing interest at 2.50% per annum, and the loan has been fully repaid before the issuance of the condensed consolidated financial statements. On January 6, 2023, the Group received a loan from EAST WEST BANK in the amount of $ 2,439 with a maturity date of January 6, 2024, and bearing interest at 2.50% per annum. The pledge shall be terminated once all borrowings are repaid, and pledge cancellation registration procedures are completed.

F-11

9. ACCRUED AND OTHER LIABILITIES

Accrued and other liabilities consisted of the following:

    

As of

    

 December 31, 2022

    

 June 30, 2023

$

$

Unaudited

Accrued payroll and welfare

858

 

663

Payable for purchase of equipment and services

387

 

231

Receipt in advance

10

 

4

Amounts due to students

1,576

 

1,512

Loans from third parties (Note i)

700

 

3,450

Others

171

 

220

Total

3,702

 

6,080

(Note i) The loans from third-party providers have been fully repaid before the issuance of the condensed consolidated financial statements.

10. ORDINARY SHARES

The addition of ordinary shares during the six months ended June 30, 2023 came from a registered public offering in February 28, 2023.

On February 28, 2023, the Company completed the issuance of 2,500,000 ADSs (representing 5,000,000 Class A Ordinary Shares of the Company) at a purchase price of $0.80 per ADS and an accompanying warrant to purchase of 1,000,000 ADSs (representing 2,000,000 Class A Ordinary Shares of the Company) at a purchase price of $0.80 per ADS, in a private placement. The net proceeds from the private placement, after deducting the offering expenses, totaled $1,849, of which $1,449 was allocated to the ordinary shares and $400 to the warrants, respectively. The Company classified the warrant in each of the aforementioned issuances on its consolidated balance sheets as equity, and valued the respective warrant issued in conjunction with private placements using the Black-Scholes model.

11. SHARE-BASED COMPENSATION

Amended and Restated 2010 Equity Incentive Plan

On June 1, 2010, the Group adopted the 2010 Equity Incentive Plan, or the “2010 Plan”, which became effective upon the completion of the IPO on August 5, 2010 and terminated automatically ten years after its adoption. On December 21, 2018, the Group amended and restated the 2010 Plan, or the “Amended and Restated 2010 Plan”, which became effective upon the approval from the Board of Directors and shareholders. The plan will continue in effect for ten years from the date adopted by the Board, unless terminated earlier under section 18 of the plan.

Restricted stock awards

On November 22, 2018, the Board of Directors approved to grant 200,000 Class A ordinary shares of the restricted stock to senior employees of the Group. Twenty-five percent of the awards vested on the one-year anniversary of the vesting commence date, and the remainder shall vest in equal and continuous monthly installments over the following thirty-six months thereafter, subject to the participant’s continuing service of the Group through each vesting date. In the six months ended June 30, 2023 and 2022, nil and 25,000 shares of restricted stock were vested, respectively.

On May 27, 2022, the Board of Directors approved the grant of 200,000 fully vested Class A ordinary shares of the restricted stock to a consultant as consideration for its service rendered.

On June 30, 2022, the Board of Directors approved the grant of 5,200,000 fully vested Class A ordinary shares of the restricted stock to senior employees of the Group for their services rendered in the past years.

F-12

The Group recorded share-based compensation expenses of $ 1,037 and nil in general and administrative expenses for the restricted stock awards for the six months ended June 30, 2022 and 2023, respectively. The unrecognized share-based compensation expenses were amounting to nil as of June 30, 2023.

12. TAXATION

a.Income taxes

Cayman Islands

Under the current laws of the Cayman Islands, the Company and its subsidiaries incorporated in the Cayman Islands are not subject to tax on income or capital gains. In addition, upon payment of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed.

U.S.

Significant components of the provision for income taxes on earnings for the six months ended June 30, 2022 and 2023 are as follows:

    

Six months ended June 30, 

    

2022

    

2023

    

$

    

$

Unaudited

Unaudited

Current:

34

(13)

Deferred:

 

 

Provision for income tax expenses

 

34

 

(13)

Reconciliation between total income tax expense and the amount computed by applying the U.S. statutory income tax rate to income before income taxes is as follows:

    

Six months ended June 30, 

 

    

2022

    

2023

 

    

%

    

%

 

Unaudited

Unaudited

Weighted average statuary tax rate

21

%  

21

%

States taxes, net of federal benefit

7

%

7

%

Tax effect of non-deductible expenses

 

%  

%

Tax effect of non-taxable income

 

%  

%

Changes in valuation allowance

 

(28)

%  

(29)

%

Effective tax rate

%

(1)

%

F-13

13. NET LOSS PER SHARE

The following table sets forth the computation of basic and diluted net loss per share for the periods indicated: