Financial Performance - Net revenues from continuing operations decreased from 9.2 million in 2023, primarily due to the closure of Bay State College in August 2023[199]. - The net loss from continuing operations narrowed to 9.3 million in 2022[199]. - Gross profit margin increased from 1.9% in 2022 to 27.2% in 2023, attributed to a decrease in cost of revenues following the closure of Bay State College[209]. - Deferred revenue decreased from 0.5 million in 2023, reflecting a reduction in tuition received in advance from students[221]. - Net revenues from continuing operations decreased by 37.8% from 9.2 million in 2023, primarily due to the permanent closure of Bay State College on August 31, 2023[240]. - Cost of revenues from continuing operations decreased by 53.8% from 6.7 million in 2023, also attributed to the closure of Bay State College[240]. - Total operating expenses from continuing operations decreased by 30.6% from 6.8 million in 2023, due to stringent expense controls[241]. - Selling and marketing expenses decreased by 26.7% from 1.1 million in 2023, reflecting improved operating efficiency[241]. - Other net income from continuing operations increased to 0.2 million in 2022, primarily due to a 14.3 million in 2022 to 12.0 million on December 31, 2022, following regulatory changes prohibiting foreign investments in private schools in China[203]. - The number of student enrollments is influenced by demand for educational programs, fees charged, marketing effectiveness, and competition[206]. - The company plans to continue adding new offerings to attract a diverse student base and enhance cross-selling opportunities[206]. Research and Development - Research and development expenses increased in 2023, primarily due to a 0.5 million in 2023, mainly due to the development of the new product, HybriU[242]. Cash Flow and Liquidity - Net cash used in operating activities from continuing operations was 5.6 million in 2022[247]. - As of December 31, 2023, the company had 10.1 million as of December 31, 2023[246]. - Net cash provided by financing activities from continuing operations was 3.0 million in 2022[251]. - The company raised $2.0 million through private investments of ordinary shares and warrants in February 2023[253]. - The company expects to require additional capital to execute its longer-term business plan, indicating potential future financing needs[244]. Shareholder and Equity Information - As of December 31, 2023, the Group granted up to 7,305,222 Class A ordinary shares to employees, outside directors, and consultants under the Amended 2010 Equity Incentive Plan[291]. - The maximum number of shares that may be issued under the Amended 2010 Plan is 6,500,000 Class A ordinary shares, plus additional shares from expired or forfeited options[290]. - The Board of Directors approved the grant of 5.2 million fully vested Class A ordinary shares to senior employees for past services on June 30, 2022[276]. - The company has entered into indemnification agreements with directors and executive officers for protection against costs and expenses incurred in their roles[331]. - Major shareholders include New Flourish Holdings Limited with 21.42% and CEIHL Partners (I) Limited with 5.20% of Class A ordinary shares[320]. - The executive officers and directors collectively own 1.84% of Class A ordinary shares and 9.99% of total ordinary shares[319]. Tax and Regulatory Information - The Cayman Islands impose no income, corporate, or capital gains tax on the creation, issuance, or delivery of ADSs or ordinary shares[344]. - The company has obtained a 20-year tax undertaking from the Governor of the Cayman Islands, ensuring no new taxes will be levied on profits or income during this period[345]. - U.S. Holders must include cash dividends as ordinary income, with dividends treated as such if paid from current or accumulated earnings and profits[353]. - Non-corporate U.S. Holders may benefit from a lower long-term capital gains tax rate on cash dividends if certain conditions are met, including the ADSs being readily tradable on an established securities market[354]. Internal Controls and Governance - The management concluded that internal control over financial reporting was effective as of December 31, 2023[395]. - There were no significant changes in internal controls over financial reporting during the reporting period that materially affected the effectiveness[396]. - The company’s audit committee financial expert is Yanhui Ma, an independent director[397].
Ambow Education(AMBO) - 2023 Q4 - Annual Report