Ambow Education Announces Second Quarter and First Half 2022 Financial Results

BEIJING,Sept. 30,2022 --Ambow Education Holding Ltd. ("Ambow" or the "Company") (NYSE American: AMBO),a leading cross-border career educational and technology service provider,today announced its unaudited consolidated financial and operating results for the three-month and six-month periods ended June 30,2022.

"In the first half of 2022,we remained focused on our core business strategy encompassing premium technology-driven educational and career enhancement service offerings amid the complex macro environment," noted Dr. Jin Huang,Ambow's President and Chief Executive Officer. "As we methodologically pave the way to drive our career-focused education business roadmap,we recorded net revenues of RMB 204.0 million in the first half of 2022."

"We remain dedicated to refining and innovating our proprietary technologies to empower our products and services. As a result,we are delighted to see our high-quality,technology-empowered offerings garner increasing recognition and popularity in the market. Additionally,we deepened our ongoing commitment to facilitating the national strategy of improving collaboration between educational institutions and industries to coordinate and propel talent development throughout China. As a veteran with a track record of over two decades in the education technology space,Ambow has built out a far-reaching cooperative network comprised of universities,institutions and commercial enterprises. Drawing on this powerful network alongside our innovative,superior products and services,we are well positioned to address educators and learners' critical demands in the evolving landscape while promoting the efficient integration of academia and business,as well as fostering a balance in talent supply and demand,especially in the technical fields."

"Moving through the second half of 2022,we will continue strengthening our competitive edge by further advancing our technologies,products and services,actively adapting ourselves to market dynamics and capturing new growth opportunities ahead. As always,we are committed to creating long-term sustainable value for all of our stakeholders," concluded Dr. Huang.

Second Quarter 2022 Financial Highlights

Net revenues for the second quarter of 2022 decreased by 36.2% to RMB 109.9 million (US$ 16.4 million) from RMB 172.3 million for the same period of 2021. The decrease was primarily due to the planned sale of the K-9 business,which is expected to be completed by December 31,2022. The profit or loss of the K-9 business since September 2021 was borne by and entitled to the buyer as agreed. The decrease was also partially due to the regulatory changes in China affecting the tutoring business since August 2021.

Gross profit for the second quarter of 2022 decreased by 40.6% to RMB 45.1 million (US$ 6.7 million) from RMB 75.9 million for the same period of 2021. Gross profit margin was 41.0%,compared with 44.1% for the second quarter of 2021. The decreases in gross profit and gross margin were mainly attributable to the immediate impact of regulatory changes on net revenues of the tutoring business,while there was less impact on costs during the period.

Operating expenses for the second quarter of 2022 increased by 20.5% to RMB 67.0 million (US$ 10.0 million) from RMB 55.6 million for the same period of 2021. The increase was primarily caused by a write-off of long-term receivables due from Jinghan Taihe of RMB 13.7 million and a share-based compensation expense of RMB 6.7 million and partially offset by the decrease in operating expenses due to stringent expense control in the period.

Operating loss for the second quarter of 2022 was RMB 21.9 million (US$ 3.3 million),compared to operating income of RMB 20.3 million for the same period of 2021.

Net loss attributable to ordinary shareholders for the second quarter of 2022 was RMB 71.4 million (US$ 10.7 million),or RMB 1.53 (US$ 0.23) per basic and diluted share,compared with a net income of RMB 22.4 million,or RMB 0.48 per basic and diluted share,for the same period of 2021. Other than the operating loss,the net loss was also caused by the income tax expense of RMB 39.0 million from the gain on waived inter-group payables and RMB 9.0 million from the valuation allowance for the deferred tax assets resulting from the write-off of the long-term receivables due from Jinghan Taihe.

As of June 30,2022,Ambow maintained strong cash resources of RMB 142.6 million (US$ 21.2 million),comprised of cash and cash equivalents of RMB 61.8 million (US$ 9.2 million),short-term investments of RMB 78.5 million (US$ 11.7 million) and restricted cash of RMB 2.3 million (US$ 0.3 million).

First Six Months 2022 Financial Highlights

Net revenues for the first six months of 2022 decreased by 32.4% to RMB 204.0 million (US$ 30.5 million) from RMB 301.9 million for the same period of 2021. The decrease was primarily due to the planned sale of the K-9 business,2022. The profit or loss of the K-9 business since September 2021 was borne by and entitled to the buyer as agreed. The decrease was also partially due to the regulatory changes in China affecting the tutoring business since August 2021.

Gross profit for the first six months of 2022 decreased by 36.8% to RMB 76.2 million (US$ 11.4 million) from RMB 120.6 million for the same period of 2021. Gross profit margin was 37.3%,compared with 39.9% for the same period of 2021. The decreases in gross profit and gross margin were mainly attributable to the immediate impact of regulatory changes on net revenues of the tutoring business,while there was less impact on costs during the period.

Operating expenses for the first six months of 2022 decreased by 1.3% to RMB 113.9 million (US$ 17.0 million) from RMB 115.4 million for the same period of 2021. The decrease was attributable to stringent expense controls,offset by a write-off of long-term receivables due from Jinghan Taihe of RMB 13.7 million and a share-based compensation expense of RMB 6.7 million.

Operating loss for the first six months of 2022 was RMB 37.7 million (US$ 5.6 million),compared to operating income of RMB 5.2 million for the same period of 2021.

Net loss attributable to ordinary shareholders for the first six months of 2022 was RMB 89.0 million (US$ 13.3 million),or RMB 1.90 (US$ 0.28) per basic and diluted share,compared with a net income of RMB 8.1 million,or RMB 0.17 per basic and diluted share,the net loss was also caused by the income tax expense of RMB 39.0 million from the gain on waived inter-group payables and RMB 9.0 million from the valuation allowance for the deferred tax assets resulting from the write-off of the long-term receivables due from Jinghan Taihe.

The Company's financial and operating results for the second quarter and first half of 2022 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

This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted,all amounts translated from RMB to U.S. dollars for the second quarter and first half of 2022 are based on the effective exchange rate of 6.6981 as of June 30,2022; all amounts translated from RMB to U.S. dollars for the second quarter and first half of 2021 are based on the effective exchange rate of 6.4566 as of June 30,2021; all amounts translated from RMB to U.S. dollars as of December 31,2021,are based on the effective exchange rate of 6.3726 as of December 30,2021. The exchange rates were according to the middle rate as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. Fluctuations in financial highlights are based on RMB amounts.

About Ambow Education Holding Ltd.

Ambow Education Holding Ltd. is a leading cross-border career educational and technology service provider,offering high-quality,individualized services and products. With its extensive network of regional service hubs complemented by a dynamic proprietary learning platform and distributors,Ambow provides its services and products to students in China and the United States of America.

Follow us on Twitter: @Ambow_Education

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things,the outlook and quotations from management in this announcement,as well as Ambow's strategic and operational plans,contain forward-looking statements. Ambow may also make written or oral forward-looking statements in its reports filed or furnished to the U.S. Securities and Exchange Commission,in its annual reports to shareholders,in press releases and other written materials and in oral statements made by its officers,directors or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statements,including but not limited to the following: the Company's goals and strategies,expansion plans,the expected growth of the content and application delivery services market,the Company's expectations regarding keeping and strengthening its relationships with its customers,and the general economic and business conditions in the regions where the Company provides its solutions and services. Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release,and Ambow undertakes no duty to update such information except as required under applicable law.

For investor and media inquiries,please contact:

Ambow Education Holding Ltd.

Tel: +86-10-6206-8000

The Piacente Group | Investor Relations

Tel: +1-212-481-2050 or +86-10-6508-0677

E-mail: ambow@tpg-ir.com

AMBOW EDUCATION HOLDING LTD.

CONSOLIDATED BALANCE SHEETS

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

AsofJune30,

AsofDecember31,

2022

2021

US$

RMB

RMB

Unaudited

ASSETS

Current assets:

Cash and cash equivalents

9,230

61,824

157,399

Restricted cash

347

2,321

1,823

Short-term investments,available for sale

2,763

18,509

15,764

Short-term investments,held to maturity

8,958

60,000

2,000

Accounts receivable,net

2,529

16,939

25,602

Amounts due from related parties

453

3,037

3,103

Prepaid and other current assets,net

16,442

110,127

109,890

Assets classified as held for sale

21,939

146,951

132,724

Total current assets

62,661

419,708

448,305

Non-current assets:

Property and equipment,net

14,664

98,218

101,915

Intangible assets,net

4,478

29,993

29,986

Goodwill

3,271

21,907

21,907

Deferred tax assets,net

—

—

31

Operating lease right-of-use asset

31,240

209,246

220,404

Finance lease right-of-use asset

739

4,950

5,250

Other non-current assets

19,385

129,845

142,364

Total non-current assets

73,777

494,159

521,857

Total assets

136,438

913,867

970,162

LIABILITIES

Current liabilities:

Short-term borrowings *

4,340

29,070

10,103

Deferred revenue *

5,787

38,757

95,036

Accounts payable *

4,140

27,730

29,466

Accrued and other liabilities *

34,220

229,209

216,399

Income taxes payable,current *

23,270

155,864

116,341

Amounts due to related parties *

767

5,135

3,793

Operating lease liability,current *

7,293

48,846

48,923

Liabilities classified as held for sale *

11,773

78,857

83,161

Total current liabilities

91,590

613,468

603,222

Non-current liabilities:

Deferred tax liabilities,net *

1,455

9,748

-

Other non-current liabilities *

3

20

96

Income taxes payable,non-current *

4,412

29,553

21,475

Operating lease liability,non-current *

29,544

197,889

198,687

Total non-current liabilities

35,414

237,210

220,258

Total liabilities

127,004

850,678

823,480

EQUITY

Preferred shares

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

2021)

—

—

—

Class A Ordinary shares

(US$0.003 par value; 66,667 and 66,47,398,276 and 41,973,276 shares issued and

outstanding as of June 30,respectively)

135

902

795

Class C Ordinary shares

(US$0.003 par value; 8,333,333 and 8,333 shares authorized,4,708,415 and 4,415 shares issued and

outstanding as of June 30,respectively)

13

90

90

Additional paid-in capital

530,449

3,553,000

3,545,955

Statutory reserve

573

3,837

3,837

Accumulated deficit

(523,251)

(3,504,789)

(3,415,771)

Accumulated other comprehensive income

1,498

10,035

11,291

Total Ambow Education Holding Ltd.'s equity

9,417

63,075

146,197

Non-controlling interests

17

114

485

Total equity

9,434

63,189

146,682

Total liabilities and equity

136,162

* All of the VIE's assets can be used to settle obligations of their primary beneficiary. Liabilities recognized as a result of

consolidating these VIEs do not represent additional claims on the Company's general assets.

AMBOW EDUCATION HOLDING LTD.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

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

ForthesixmonthsendedJune30,

ForthethreemonthsendedJune30,

2022

2022

2021

2022

2022

2021

US$

RMB

RMB

US$

RMB

RMB

NET REVENUES

Educational program and services

29,697

198,912

301,104

15,732

105,373

171,590

Intelligent program and services

766

5,131

752

680

4,555

661

Total net revenues

30,463

204,043

301,856

16,412

109,928

172,251

COST OF REVENUES

Educational program and services

(18,571)

(124,389)

(179,375)

(9,222)

(61,767)

(95,536)

Intelligent program and services

(521)

(3,489)

(1,930)

(461)

(3,088)

(786)

Total cost of revenues

(19,092)

(127,878)

(181,305)

(9,683)

(64,855)

(96,322)

GROSS PROFIT

11,371

76,165

120,551

6,729

45,073

75,929

Operating expenses:

Selling and marketing

(2,576)

(17,253)

(24,422)

(1,121)

(7,511)

(13,422)

General and administrative

(13,443)

(90,043)

(85,357)

(8,413)

(56,349)

(38,412)

Research and development

(986)

(6,603)

(5,602)

(463)

(3,101)

(3,757)

Total operating expenses

(17,005)

(113,899)

(115,381)

(9,997)

(66,961)

(55,591)

OPERATING (LOSS) INCOME

(5,634)

(37,734)

5,170

(3,268)

(21,888)

20,338

OTHER INCOME (EXPENSES)

Interest income,net

534

3,574

4,008

258

1,726

1,948

Foreign exchange (loss) gain,net

(6)

(39)

203

6

43

(12)

Other income (expense),net

163

1,094

(1,180)

118

793

(240)

Gain from deregistration of subsidiaries

44

295

1,325

14

91

1,181

Loss on disposal of subsidiaries

(168)

(1,124)

—

(168)

(1,124)

—

Gain on sale of investment available for sale

119

799

1,221

119

799

474

Total other income

686

4,599

5,577

347

2,328

3,351

(LOSS) INCOME BEFORE INCOME TAX

AND NON-CONTROLLING INTEREST

(4,948)

(33,135)

10,747

(2,921)

(19,560)

23,689

Income tax expense

(8,517)

(57,050)

(3,155)

(7,876)

(52,756)

(1,526)

NET (LOSS) INCOME

(13,465)

(90,185)

7,592

(10,797)

(72,316)

22,163

Less: Net loss attributable to non-controlling

interest

(174)

(1,167)

(519)

(130)

(868)

(277)

NET (LOSS) INCOME ATTRIBUTABLE

TO ORDINARY SHAREHOLDERS

(13,291)

(89,018)

8,111

(10,667)

(71,448)

22,440

NET (LOSS) INCOME

(13,163

OTHER COMPREHENSIVE (LOSS)

INCOME,NET OF TAX

Foreign currency translation adjustments

(161)

(1,079)

(417)

(87)

(584)

(532)

Unrealized gains on short-term investments

Unrealized holding gains arising during

period

74

497

1,075

33

224

493

Less: reclassification adjustment for gains

included in net income

101

674

852

101

674

308

Other comprehensive loss

(188)

(1,256)

(194)

(155)

(1,034)

(347)

TOTAL COMPREHENSIVE (LOSS)

INCOME

(13,653)

(91,441)

7,398

(10,952)

(73,350)

21,816

Net (loss) income per share – basic and diluted

(0.28)

(1.90)

0.17

(0.23)

(1.53)

0.48

Weighted average shares used in calculating

basic and diluted net (loss) income per share

46,756,368

46,642,280

46,825,968

46,648,495

AMBOW EDUCATION HOLDING LTD.

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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

AttributabletoAmbowEducationHoldingLtd.'sEquity

Accumulated

ClassAOrdinary

ClassCOrdinary

Additional

other

Non-

shares

shares

paid-in

Statutory

Accumulated

comprehensive

controlling

Total

Shares

Amount

Shares

Amount

capital

reserves

deficit

income

interest

Equity

RMB

RMB

RMB

RMB

RMB

RMB

RMB

RMB

Balance as of January 1,

2022

41,276

795

4,415

90

3,955

3,837

(3,771)

11,291

485

146,682

Share-based compensation

—

—

—

—

214

—

—

—

—

214

Issuance of ordinary shares

for restricted stock award

12,500

—

—

(0)

—

—

—

—

—

Foreign currency translation

adjustment

—

—

—

—

—

—

—

(495)

—

(495)

Unrealized gain on

investment,net of income

taxes

—

—

—

—

—

—

—

273

—

273

Capital injection from non-

controlling shareholders

—

—

—

—

—

—

—

—

101

101

Net loss

—

—

—

—

—

—

(17,570)

—

(299)

(17,869)

Balance as of March 31,985,776

795

4,546,169

3,433,341)

11,069

287

128,906

Share-based compensation

—

—

—

—

226

—

—

—

—

226

Issuance of ordinary shares

for restricted stock award

5,412,500

107

—

—

6,605

—

—

—

—

6,712

Foreign currency translation

adjustment

—

—

—

—

—

—

—

(584)

—

(584)

Reversal of unrealized gain

on investment,net of

income taxes

—

—

—

—

—

—

—

(450)

—

(450)

Disposal of subsidiaries

—

—

—

—

—

—

—

—

645

645

Capital injection from non-

controlling shareholders

—

—

—

—

—

—

—

—

50

50

Net loss

—

—

—

—

—

—

(71,448)

—

(868)

(72,316)

Balance as of June 30,2022

47,276

902

4,000

3,789)

10,035

114

63,189

Balance as of January 1,

2021

41,923,276

794

4,073

4,210

(3,419,146)

12,101

(1,968)

141,154

Share-based compensation

—

—

—

—

219

—

—

—

—

219

Issuance of ordinary shares

for restricted stock award

12,500

—

—

(0)

—

—

—

—

—

Foreign currency translation

adjustment

—

—

—

—

—

—

—

115

—

115

Unrealized gain on

investment,net of income

taxes

—

—

—

—

—

—

—

38

—

38

Net loss

—

—

—

—

—

—

(14,329)

—

(242)

(14,571)

Balance as of March 31,935,776

794

4,292

4,475)

12,254

(2,210)

126,955

Share-based compensation

—

—

—

—

220

—

—

—

—

220

Issuance of ordinary shares

for restricted stock award

12,500

—

—

(0)

—

—

—

—

—

Foreign currency translation

adjustment

—

—

—

—

—

—

—

(532)

—

(532)

Unrealized gain on

investment,net of income

taxes

—

—

—

—

—

—

—

185

—

185

Net income/(loss)

—

—

—

—

—

—

22,440

—

(277)

22,163

Balance as of June 30,2021

41,948,512

4,411,035)

11,907

(2,487)

148,991

Discussion of Segment Operations

(All amounts in thousands)

ForthesixmonthsendedJune30,

2022

2022

2021

2022

2022

2021

US$

RMB

RMB

US$

RMB

RMB

NET REVENUES

K-12 Schools

14,922

99,950

175,650

8,048

53,909

104,748

CP&CE Programs

15,541

104,093

126,206

8,364

56,019

67,503

Total net revenues

30,251

COST OF REVENUES

K-12 Schools

(7,682)

(51,452)

(97,886)

(4,067)

(27,238)

(52,297)

CP&CE Programs

(11,410)

(76,426)

(83,419)

(5,616)

(37,617)

(44,025)

Total cost of revenues

(19,322)

GROSS PROFIT

K-12 Schools

7,240

48,498

77,764

3,981

26,671

52,451

CP&CE Programs

4,131

27,667

42,787

2,748

18,402

23,478

Total gross profit

11,929

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