Exhibit 99.2
AMBOW EDUCATION HOLDING LTD.
INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED
JUNE 30, 2024 AND 2025
CONTENTS
F-1
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 | 2024 | 2025 | ||||||||
| $ | $ | |||||||||
| Audited | Unaudited | |||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalent | 4 | |||||||||
| Restricted cash | 4 | |||||||||
| Accounts receivable, net | 5 | |||||||||
| Prepaid and other current assets | 6 | |||||||||
| Total current assets | ||||||||||
| Non-current assets: | ||||||||||
| Property and equipment, net | ||||||||||
| Intangible assets, net | ||||||||||
| Operating lease right-of-use asset | 15 | |||||||||
| Other non-current assets | 7 | |||||||||
| Total non-current assets | ||||||||||
| Total assets | ||||||||||
The accompanying notes are an integral part of these unaudited 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 | 2024 | 2025 | ||||||||
| $ | $ | |||||||||
| Audited | Unaudited | |||||||||
| LIABILITIES | ||||||||||
| Current liabilities: | ||||||||||
| Short-term borrowings | 8 | |||||||||
| Accounts payable | ||||||||||
| Accrued and other liabilities | 9 | |||||||||
| Income taxes payable | ||||||||||
| Operating lease liability, current | 15 | |||||||||
| Total current liabilities | ||||||||||
| Non-current liabilities: | ||||||||||
| Operating lease liability, non-current | 15 | |||||||||
| Other non-current liabilities | 10 | |||||||||
| Total non-current liabilities | ||||||||||
| Total liabilities | ||||||||||
The accompanying notes are an integral part of these unaudited 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, | |||||||||
| Note | 2024 | 2025 | ||||||||
| $ | $ | |||||||||
| Audited | Unaudited | |||||||||
| EQUITY | ||||||||||
| Preferred shares | ||||||||||
| ($ | ||||||||||
| Class A Ordinary shares | ||||||||||
| ($ | ||||||||||
| Class C Ordinary shares | ||||||||||
| ($ | ||||||||||
| Additional paid-in capital | ||||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||||
| Total equity | ||||||||||
| Total liabilities and equity | ||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-4
AMBOW EDUCATION HOLDING LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(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 | 2024 | 2025 | 2024 | 2025 | ||||||||||||||
| $ | $ | $ | $ | |||||||||||||||
| NET REVENUES | ||||||||||||||||||
| Educational program and services | ||||||||||||||||||
| HybriU licensing and selling | ||||||||||||||||||
| Total net revenues | ||||||||||||||||||
| COST OF REVENUES | ||||||||||||||||||
| Educational program and services | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| HybriU licensing and selling | ( | ) | ( | ) | ||||||||||||||
| Total cost of revenues | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| GROSS PROFIT | ||||||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Selling and marketing | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| General and administrative | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Research and development | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| OPERATING (LOSS) INCOME | ( | ) | ||||||||||||||||
| OTHER INCOME (EXPENSES) | ||||||||||||||||||
| Interest income (expense), net | ( | ) | ( | ) | ||||||||||||||
| Other income, net | ||||||||||||||||||
| Gain on lease termination | ||||||||||||||||||
| Total other income | ||||||||||||||||||
| (LOSS) INCOME BEFORE INCOME TAX | ( | ) | ||||||||||||||||
| Income tax benefit (expense) | 13 | ( | ) | ( | ) | ( | ) | |||||||||||
| NET INCOME | ||||||||||||||||||
| NET INCOME ATTRIBUTABLE TO ORDINARY SHAREHOLDERS | ||||||||||||||||||
| OTHER COMPREHENSIVE INCOME, NET OF TAX | ||||||||||||||||||
| Other comprehensive income, net | ||||||||||||||||||
| TOTAL COMPREHENSIVE INCOME | ||||||||||||||||||
| Net income per share - basic and diluted | 14 | |||||||||||||||||
| Net income per ADS - basic and diluted | 14 | |||||||||||||||||
| Weighted average shares used in calculating basic and diluted net income per share | 14 | |||||||||||||||||
The accompanying notes are an integral part of these unaudited 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 | |||||||||||||||||||||||||||||||||||||
| shares | shares | paid-in | Statutory | Accumulated | comprehensive | Total | ||||||||||||||||||||||||||||||||||
| Note | Shares | Amount | Shares | Amount | capital | reserves | deficit | loss | Equity | |||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-6
AMBOW EDUCATION HOLDING LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(All amounts in thousands, except for share and per share data)
| For the six months ended June 30, | ||||||||
| 2024 | 2025 | |||||||
| $ | $ | |||||||
| Cash flows from operating activities | ||||||||
| Net cash (used in)/provided by operating activities | ( | ) | ||||||
| Cash flows from investing activities | ||||||||
| Net cash provided by/(used in) investing activities | ( | ) | ||||||
| Cash flows from financing activities | ||||||||
| Proceeds from short-term borrowings | ||||||||
| Repayments of short-term borrowings | ( | ) | ||||||
| Proceeds from borrowing from related parties | ||||||||
| Repayments of borrowing from related parties | ( | ) | ||||||
| Net cash (used in)/provided by financing activities | ( | ) | ||||||
| Effects of exchange rate changes on cash, cash equivalents and restricted cash | ||||||||
| Net change in cash, cash equivalents and restricted cash | ( | ) | ||||||
| Cash, cash equivalents and restricted cash at beginning of periods | ||||||||
| Cash, cash equivalents and restricted cash at end of periods | ||||||||
| Supplemental disclosure of cash flow information | ||||||||
| Income tax paid | ||||||||
| Interest paid | ( | ) | ( | ) | ||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-7
AMBOW EDUCATION HOLDING LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except for share and per share data)
1. ORGANIZATION AND PRINCIPAL ACTIVITIES
The accompanying consolidated financial statements include the financial statements of Ambow Education Holding Ltd. (hereinafter referred to as the “Company”) and its subsidiaries. The Company and its subsidiaries are hereinafter collectively referred to as the “Group.” The Group is a U.S.-based innovator of AI-powered phygital (physical + digital) solutions for education, corporate collaboration and live events. Its mission is to eliminate barriers between physical and digital environments, languages and regions, and academia and industry. As an innovator in AI-powered phygital solutions, the Group bridges the gap between physical and digital experiences across education, corporate collaboration, and live events. Through its network of for-profit colleges, the Group provides high-quality, personalized, and dynamic career education services and products.
2. LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2025, the Group’s consolidated current assets
exceeded its consolidated current liabilities by $
The Group’s principal sources of liquidity were cash provided
by operating activities, bank borrowings. The Group reported net cash used in operating activities of $
The Group’s operating results for future periods are subject to numerous uncertainties and it is uncertain if the Group will be able to continuously achieve a net income position in the foreseeable future. If management is not able to increase revenues and/or manage costs 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, restricted cash released within 12 months, and 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 issue date of the unaudited condensed consolidated financial statements, and the Group has prepared the unaudited condensed consolidated financial statements on a going concern basis. However, the Group continues to have ongoing obligations and expects that it will require additional capital 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.
3. SIGNIFICANT ACCOUNTING POLICIES
a. Basis of presentation
The accompanying unaudited 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 unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and footnotes thereto, included in the Company’s 2024 Annual Report filed with the SEC on March 28, 2025. The interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year or any future periods.
F-8
b. Revenue recognition
The Group generates revenue through the delivery of educational programs and licensing and sales of HybriU solutions.
The core principle of ASC 606 is that an entity recognizes revenue when control of the promised goods or services is transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
To achieve that principle, the Group applies the following steps:
Step 1: Identify the contract(s) with a customer;
Step 2: Identify the performance obligations in the contract;
Step 3: Determine the transaction price;
Step 4: Allocate the transaction price to the performance obligations in the contract;
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.
The Group has two reportable segments.
For undergraduate students, usually there are no written formal contracts between the Group and the students according to business practice. Records with students’ name, grade, tuition and fee collected are signed or confirmed by students. Academic requirements and each party’s rights are communicated with students through enrollment brochures or daily teaching and academic activities.
For undergraduate students, the Group’s performance obligation is to provide acknowledged academic education within academic years, and post-secondary with Associates and Bachelor’s programs within agreed-upon periods. The transaction price is the tuition fee received and circumstances like other variable consideration, significant financing component, noncash consideration, consideration payable to a customer did not exist. As there is only one performance obligation, all the transaction price is allocated to the one performance obligation. The Group satisfies performance obligation to students over time, and recognizes revenue according to school days consumed in each month of a semester.
We also generate revenue primarily through the licensing and sales of HybriU solutions.
Licensing - There is only one performance obligation for Licensing which is to deliver our HybriU solution to customers as a combination of software, user manuals, technical documentation and other related materials, from which customers can benefit alongside ready-made resources. Revenue for Licensing is recognized at the point in time of delivery of the HybriU solution because the solution is considered functional intellectual property due to its significant standalone functionality, and the Group does not expect to substantively change that functionality in any way that would significantly affect the utility of the solution after delivery. The Group also promises to provide unspecified updates, bug fixes and error collection for the solution (referred to as “technical support”) free of charge if any issues occur during the operation and if support is requested by customers during the licensing term. This technical support is considered an immaterial promise and not identified as a single performance obligation because it is minimally and infrequently provided to customers based on historical experience which is also in line with the Group’s expectations. There is no variable consideration and significant financing component.
For sales of HybriU solutions, the performance obligation is similarly fulfilled at the point in time when control of the product transfers to the customer. This includes the delivery of hardware and the full software package, along with all necessary documentation and resources for immediate use. Revenue is recognized upon delivery, as the customer obtains control and the ability to direct the use of the solution at that point.
The Group generally provide a standard warranty for a period of 12 months from the date of delivery of the products. The Group determines that such product warranty is not a separated performance obligation because the nature of warranty is to provide assurance that a product will function as expected and in accordance with customer’s specification and the Group has not sold the standard warranty separately. As the Group has only recently commenced sales and, based on estimates, does not expect to incur any significant warranty costs in the future, it has determined that no provision for warranty expenses is required for the period ended 30 June 2025.
F-9
Contract Balances
The Group classifies its right to consideration in exchange for service transferred to a customer as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional as compared to a contract asset which is a right to consideration that is conditional upon factors other than the passage of time. The Group recognizes accounts receivable in its consolidated balance sheets when it performs a service in advance of receiving consideration and it has the unconditional right to receive consideration. A contract asset is recorded when the Group has transferred services to the customer before payment is received or is due. The Group did not record contract assets as of December 31, 2024 and June 30, 2025.
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, 2023 and 2024, the Group has deferred revenue amounted $
c. Segment reporting
In accordance with ASC 280-10, Segment Reporting: Overall, the Group’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer.
In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands public entities’ segment disclosures, among others, requiring disclosure of significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss; an amount and description of its composition for other segment items; and interim disclosures of a reportable segment’s profit or loss and assets.
The Group’s chief operating decision maker has been identified as the Chief Executive Officer who reviews financial information of operating segments based on US GAAP amounts when making decisions about allocating resources and assessing performance of the Group. For the three-month and six-month periods ended June 30, 2024 and 2025, the Group present financial information disaggregated by business components including (i) Educational programs and services and (ii) HybriU licensing and selling for internal management purposes.
The Group’s CODM makes decisions on resource allocation, evaluates operating performance, and monitors budget versus actual results using net income. There is no reconciling items or adjustments between segment income and net income as presented in the Group’s statements of operations. The CODM does not review assets in evaluating the segment results and therefore such information is not presented.
d. Allowance for Credit Losses
In accordance with Accounting Standards Codification (“ASC”) Topic 326, Financial Instruments - Credit Losses, the Company estimates and records an expected lifetime credit loss on accounts receivable and long-term receivable included in other non-current assets by utilizing historical write-off rates as a starting point for determining expected credit losses and has considered all available relevant information, including details about past events, current conditions, and reasonable and supportable forecasts, as well as their impact on the expected credit losses. The allowance for expected credit losses is adjusted for current conditions and reasonable and supportable forecasts.
e. Leases
The Group accounts for its lease under ASC 842 Leases, and identifies lease as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. For all operating leases except for short-term leases, the Group recognizes operating right-of-use assets and operating lease liabilities. Leases with an initial term of 12 months or less are short-term lease and not recognized as right-of-use assets and lease liabilities on the consolidated balance sheet. The Group recognizes lease expense for short-term leases on a straight-line basis over the lease term. The operating lease liabilities are recognized based on the present value of the lease payments not yet paid, discounted using the Group’s incremental borrowing rate over a similar term of the lease payments at lease commencement. Some of the Group’s lease agreements contain renewal options; however, the Group do not recognize right-of-use assets or lease liabilities for renewal periods unless it is determined that the Group is reasonably certain of renewing the lease at inception or when a triggering event occurs. The right-of-use assets consist of the amount of the measurement of the lease liabilities and any prepaid lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Group’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
When none of the criteria of finance lease are met, a lessee shall classify the lease as an operating lease.
f. Income taxes
Income taxes are provided for in accordance with the laws of the relevant taxing authorities. Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, net of operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
ASC 740-10-50-19 requires that an entity disclose its policy on the classification of interest and penalties due to taxing authorities in the notes to the financial statements. In addition, ASC 740-10-50-15(c) requires that all entities disclose in the statement of operations and in the statement of financial position the total amounts of the interest and penalties related to tax positions recognized. As of June 30 2025, the Company did not have any interest or penalty on tax deficiencies.
Deferred tax liabilities and assets are classified as noncurrent and presented with a netted-off amount in the condensed consolidated balance sheets as of December 31, 2024 and June 30 2025, respectively.
F-10
g. Recently issued accounting standards
In December, 2023, the FASB issued ASU 2023-09 “Income Taxes (Topics 740): Improvements to Income Tax Disclosures” to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted. The Group is currently evaluating the impact of the above new accounting pronouncement or guidance on the consolidated financial statements.
In November, 2024, the FASB issued ASU No. 2024-03, Income Statement (Topic 220)- Reporting Comprehensive Income- Expense Disaggregation Disclosures (Subtopic 220-40). ASU No. 2024-03 requires publicly-traded business entities to disclose specified information about the components of certain costs and expenses that are currently disclosed in the financial statements. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Group is currently evaluating the impact of the above new accounting pronouncement or guidance on the consolidated financial statements.
Recently issued ASUs by the FASB, except for the one mentioned above, have no material impact on the Group’s consolidated results of operations or financial position.
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, 2024 | June 30, 2025 | |||||||
| $ | $ | |||||||
| Unaudited | ||||||||
| Cash and cash equivalents | ||||||||
| Restricted cash (Note i) | ||||||||
| Total cash, cash equivalents, and restricted cash shown in the unaudited condensed consolidated statements of cash flows | ||||||||
(Note i)
5. ACCOUNTS RECEIVABLE, NET
Accounts receivable consisted of the following:
| As of | ||||||||
| December 31, 2024 | June 30, 2025 | |||||||
| $ | $ | |||||||
| Unaudited | ||||||||
| Accounts receivable | ||||||||
| Less: Allowance for credit losses | ( | ) | ( | ) | ||||
| Accounts receivable, net | ||||||||
Allowances for credit losses of and were provided during the
six months ended June 30, 2024 and 2025, respectively. Allowances for credit losses of $
F-11
6. PREPAID AND OTHER CURRENT ASSETS
Prepaid and other current assets consisted of the following:
| As of | ||||||||
| December 31, 2024 | June 30, 2025 | |||||||
| $ | $ | |||||||
| Unaudited | ||||||||
| Inventories | ||||||||
| Prepayments to suppliers | ||||||||
| Loans to third parties | ||||||||
| Receivables due from third-party (Note i) | ||||||||
| Others (Note ii) | ||||||||
| Total before allowance for credit losses | ||||||||
| Less: allowance for credit losses (Note i) | ( | ) | ( | ) | ||||
| Total | ||||||||
(Note i)
(Note ii)
7. OTHER NON-CURRENT ASSETS
Other non-current assets consisted of the following:
| As of | ||||||||
| December 31, 2024 | June 30, 2025 | |||||||
| $ | $ | |||||||
| Unaudited | ||||||||
| Long-term receivables (Note i) | ||||||||
| Long-term lease deposits | ||||||||
| Educational content | ||||||||
| Others | ||||||||
| Sub-total | ||||||||
| Less: allowance for doubtful accounts (Note i) | ( | ) | ( | ) | ||||
| Total | ||||||||
(Note i)
F-12
8. SHORT-TERM BORROWINGS
The following table sets forth the loan agreements of short-term borrowings from banks:
| Amount | Annual Interest | Repayment | ||||||||||||
| Date | Borrower | Lender | ($) | Rate | Due Date | |||||||||
| January 9, 2024 | % | |||||||||||||
| October 11, 2022 | % | |||||||||||||
| June 12, 2025 | % | Based on the actual repayment | ||||||||||||
In October 2022 and January 2024, the Group pledged its restricted
cash amount of $
In April 2025, the Group entered into a loan agreement with Evertrust
Bank for $
On October 11, 2022, the Group received a loan from Cathay Bank in
the amount of $
9. ACCRUED AND OTHER LIABILITIES
Accrued and other liabilities consisted of the following:
| As of | ||||||||
| December 31, 2024 |
June 30, 2025 |
|||||||
| $ | $ | |||||||
| Unaudited | ||||||||
| Accrued payroll and welfare | ||||||||
| Sales tax and others | ||||||||
| Amounts due to students | ||||||||
| Deferred revenue | ||||||||
| Amounts due to landlord for Lease Termination (Note i) | ||||||||
| Others | ||||||||
| Total | ||||||||
(Note i)
F-13
10. OTHER NON-CURRENT LIABILITIES
Other non-current liabilities consisted of the following:
| As of | ||||||||
| December 31, 2024 | June 30, 2025 | |||||||
| $ | $ | |||||||
| Unaudited | ||||||||
| Amounts due to landlord for Lease Termination (Note i) | ||||||||
| Total | ||||||||
(Note i)
In June 2025, the Group entered into a settlement agreement with the
landlord, resulting in a gain of $
11. CONCENTRATIONS
Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, accounts receivable, other receivable and other non-current assets. The Group places its cash and cash equivalents with financial institutions with high-credit ratings in the U.S. The Group conducts credit evaluations of its customers and suppliers, and generally does not require collateral or other security from them. The Group evaluates its collection experience and long outstanding balances to determine the need for an allowance for doubtful accounts.
The Group evaluates its concentrations of the operations are as follows:
No single customer represented 10% or more of the Group’s total revenues for the six months ended June 30, 2024, and 2025.
No single supplier represented 10% or more of the Group’s total costs of sales for the six months ended June 30, 2024, and 2025.
No single debtor accounted for 10% or more of the Group’s consolidated prepaid and other current assets and other non-current assets as of December 31, 2024 and June 30, 2025.
The debtors who accounted for 10% or more of the Group’s consolidated accounts receivable was as follows:
| As of June 30, | ||||||||||||||||
| 2024 | 2025 | |||||||||||||||
| Debtors | $ | % | $ | % | ||||||||||||
| Accounts receivable | ||||||||||||||||
| Company A | % | |||||||||||||||
F-14
12. 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
2024 Equity Incentive Plan
On December 20, 2024, we adopted the Company’s 2024 Equity Incentive
Plan (the “Plan”), which became effective upon the approval of the shareholders at the Annual Meeting of Shareholders on December
20, 2024.The Plan provides for the grant of stock options, SARs, performance share awards, performance unit awards, distribution equivalent
right awards, restricted stock awards, restricted stock unit awards and unrestricted stock awards to non-employee directors, officers,
employees and nonemployee consultants of Ambow Education Holding Ltd. or its affiliates. the maximum aggregate number of Shares that may
be awarded and sold under the Plan is
Share options
Management of the Group is responsible for determining the fair value of options granted and has considered a number of factors when making this determination, including valuations. The Group did not grant options during the six months ended June 30, 2024 and 2025. As of December 31, 2024 and June 30, 2025, all share options were vested and previously expensed.
Restricted stock awards
On November 22, 2018, the Board of Directors approved the grant of
The Group recorded share-based compensation expenses of nil and in general and administrative expenses for the restricted stock awards for the six months ended June 30, 2024 and 2025, respectively. The unrecognized share-based compensation expenses amounted to as of June 30, 2025.
F-15
13. 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, 2024 and 2025 are as follows:
| Six months ended June 30, | ||||||||
| 2024 | 2025 | |||||||
| $ | $ | |||||||
| Unaudited | Unaudited | |||||||
| Current: | ( | ) | ||||||
| Deferred: | ||||||||
| Provision for income tax benefit (expenses) | ( | ) | ||||||
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, | ||||||||
| 2024 | 2025 | |||||||
| % | % | |||||||
| Unaudited | Unaudited | |||||||
| Weighted average statuary tax rate | % | % | ||||||
| States taxes, net of federal benefit | % | ( | )% | |||||
| Tax effect of non-deductible expenses | ( | )% | % | |||||
| Tax effect of non-taxable income | % | % | ||||||
| Changes in valuation allowance | ( | )% | ( | )% | ||||
| Effect of tax amendment | % | % | ||||||
| Effective tax rate | % | % | ||||||
F-16
14. NET INCOME PER SHARE
The following table sets forth the computation of basic and diluted net income per share for the periods indicated:
| Six months ended June 30, | ||||||||
| 2024 | 2025 | |||||||
| $ | $ | |||||||
| Unaudited | Unaudited | |||||||
| Numerator: | ||||||||
| Numerator for basic and diluted net income per share | ||||||||
| Denominator: | ||||||||
| Denominator for basic and diluted net income per share weighted average ordinary shares outstanding | ||||||||
| Basic and diluted net income per share | ||||||||
| Basic and diluted net income per ADS (Note i) | ||||||||
(Note i)
Basic income per share is computed using the weighted average number of the ordinary shares outstanding during the six months ended June 30, 2024 and 2025. Diluted income per share is computed using the weighted average number of ordinary shares and ordinary equivalent shares outstanding during the six months ended June 30, 2024 and 2025.
15. LEASES
The Group has operating leases for classrooms, dormitories, and corporate offices.
The components of lease expense were as follows:
| Six Months ended June 30, | ||||||||
| 2024 | 2025 | |||||||
| $ | $ | |||||||
| Unaudited | Unaudited | |||||||
| Operating lease expense | ||||||||
Supplemental cash flow information related to leases was as follows:
| Six Months ended June 30, | ||||||||
| 2024 | 2025 | |||||||
| $ | $ | |||||||
| Unaudited | Unaudited | |||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash flows used in operating leases | ||||||||
F-17
Supplemental balance sheet information related to leases was as follows:
| Six Months ended June 30, | ||||||||
| 2024 | 2025 | |||||||
| Unaudited | Unaudited | |||||||
| Weighted-average Remaining Lease Term | ||||||||
| Operating leases | ||||||||
| Weighted-average Discount Rate | ||||||||
| Operating leases | % | % | ||||||
The Group’s lease agreements do not have a readily determinable discount rate. The incremental borrowing rate is determined at lease commencement or lease modification and represents the rate of interest the Group would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment. The weighted-average discount rate was calculated using the discount rate for the lease that was used to calculate the lease liability balance for each lease and the remaining balance of the lease payments for each lease as of June 30, 2024 and 2025, respectively.
The weighted-average remaining lease terms were calculated using the remaining lease term and the lease liability balance for each lease as of June 30, 2024 and 2025, respectively.
As of June 30, 2025, maturities of lease liabilities were as follows:
| Amount | ||||
| $ | ||||
| Unaudited | ||||
| For the six months ending December 31, 2025 (remaining) | ||||
| For the year ending December 31, | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total lease payments | ||||
| Less: interest | ( | ) | ||
| Total | ||||
| Less: current portion | ( | ) | ||
| Non-current portion | ||||
As of June 30, 2025, the Group had no material operating or finance leases that had not yet commenced.
F-18
16. SEGMENT REPORTING
Pursuant to ASC 280-10, Segment Reporting: Overall, the Group’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer. The CODM reviews financial information of operating segments prepared based on U.S. GAAP when making decisions about allocating resources and assessing performance of the Group.
In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280). Consistent with ASU 2023-07, the Group evaluates its operating segments. For the three-month and six-month periods ended June 30, 2024 and 2025, the Group present financial information disaggregated by business components including (i) Educational programs and services and (ii) HybriU licensing and selling for internal management purposes.
The
accounting policies of the segments are the same as those described in the summary of significant accounting policies. The CODM evaluates
performance based on each reporting segment’s revenues and cost of revenues and uses these results to evaluate the performance
of, and to allocate resources to each of the segments.
| For the six months ended June 30, | For the three months ended June 30, | |||||||||||||||
| 2024 | 2025 | 2024 | 2025 | |||||||||||||
| $ | $ | $ | $ | |||||||||||||
| NET REVENUES | ||||||||||||||||
| Educational programs and services | ||||||||||||||||
| HybriU licensing and selling | ||||||||||||||||
| Total net revenues | ||||||||||||||||
| COST OF REVENUES | ||||||||||||||||
| Educational programs and services | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| HybriU licensing and selling | ( | ) | ( | ) | ||||||||||||
| Total cost of revenues | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| GROSS PROFIT | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling and marketing | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| General and administrative | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Research and development | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| OPERATING (LOSS) INCOME | ( | ) | ||||||||||||||
| OTHER INCOME (EXPENSES) | ||||||||||||||||
| Interest income (expense), net | ( | ) | ( | ) | ||||||||||||
| Other income, net | ||||||||||||||||
| Gain on lease termination | ||||||||||||||||
| Total other income | ||||||||||||||||
| (LOSS) INCOME BEFORE INCOME TAX | ( | ) | ||||||||||||||
F-19