Ambow Education Holding (AMBO) risk factors, FY2025 10-K

RISKS RELATED TO OUR BUSINESS AND INDUSTRY

1. 01If we are not able to continue to attract students to enroll in our programs, our net revenues may decline, and we may not be able to maintain profitability
2. 02If we are not able to continue to attract and retain qualified education professionals, we may not be able to maintain consistent teaching quality throughout our school, and our brand, business and results of operations may be materially and adversely affected
3. 03If our expansions into new businesses are not successful, our results of operation and growth prospects may be materially and adversely affected
4. 04Potential issues in the adoption and use of artificial intelligence in our product offerings may result in reputational harm or liability
5. 05Our business depends on the strength of our brands in the marketplace. We may not be able to retain existing students or attract new students if we cannot continue to use, protect and enhance our brands successfully in the marketplace
6. 06Competition could result in loss of market share and revenues, lower profit margins and limit our future growth
7. 07We may not be able to successfully integrate businesses that we acquire, which may cause us to lose anticipated benefits from such acquisitions and to incur significant additional expenses
8. 08Our results of operations may fluctuate, which makes our financial results difficult to forecast, and could cause our results to fall short of expectations
9. 09As a result of these and other factors, we may not sustain our past growth rates in future periods, and we may not sustain profitability on a quarterly or annual basis in the future
10. 10Our business depends on the continuing efforts of our senior management team and other key personnel, and our business may be harmed if we lose their services
11. 11If we are not able to continually enhance our online programs, services and products and adapt them to rapid technological changes and student needs, we may lose market share and our business could be adversely affected
12. 12Failure to adequately and promptly respond to industry changes in curriculum, testing materials and standards could cause our services and products to be less attractive to our students
13. 13If we are unable to obtain new loans, at all or on terms that are acceptable to us, our growth will be impacted
14. 14Our business is subject to seasonal fluctuations, which may cause our operating results to fluctuate from quarter to quarter
15. 15We may not be able to adequately protect our intellectual property, which could adversely impact our competitiveness
16. 16We may be exposed to infringement and misappropriation claims by third parties, which, if successful, could cause us to pay significant damage awards
17. 17Unexpected network interruptions, security breaches or computer virus attacks and system failures could have a material adverse effect on our business, financial condition and results of operations
18. 18Laws in the United States
19. 19Our legal right to lease certain properties could be challenged by property owners or other third parties, which may cause interruptions to business operations of the affected college campuses and adversely affect our financial results
20. 20We may need to record a significant charge to earnings if our goodwill or intangible assets arising from acquisitions become impaired, which would adversely affect our net income
21. 21Our grant of employee share options, restricted shares or other share-based compensation and any future grants could have an adverse effect on our net income
22. 22Changes to accounting standards, taxation rules or practices, or greater than anticipated tax liabilities may adversely affect our reported results of operations or how we conduct our business

RISKS RELATED TO REGULATIONS OF OUR U.S. BUSINESS

1. 23The ongoing regulatory effort aimed at for-profit post-secondary institutions of higher education could lead to additional legislation or other governmental action that may negatively affect the industry
2. 24If we fail to maintain our institutional accreditation or if our institutional accrediting body loses recognition by the Department of Education, we will lose our ability to participate in Title IV programs
3. 25If we fail to obtain recertification by the Department of Education when required, we will lose our ability to participate in Title IV programs
4. 26Student loan defaults could result in the loss of eligibility to participate in Title IV programs
5. 27Our U.S. college could lose its eligibility to participate in federal student financial aid programs or be provisionally certified with respect to such participation if the percentage of our revenues derived from those programs were too high
6. 28Our failure to demonstrate financial responsibility or administrative capability may result in the loss of eligibility to participate in Title IV programs
7. 29Our failure to comply with the Borrower Defense to Repayment Regulations could result in sanctions and other liability
8. 30Our business operations could be harmed if we experience a disruption in our ability to process student loans under the Federal Direct Loan Program
9. 31Our business operations could be harmed if Congress makes changes to the availability of Title IV funds

RISKS RELATED TO OWNERSHIP OF OUR ADSS

1. 32We cannot assure you that the ADSs will not be delisted from the NYSE American, which could negatively impact the price of the ADSs and our ability to access the capital markets
2. 33The market price of our ordinary shares and the ADSs could be subject to volatility
3. 34Insiders have substantial control over us, which could adversely affect the market price of our ADSs
4. 35We may need additional capital, and the sale of additional ADSs or other equity securities would result in additional dilution to our shareholders
5. 36Anti-takeover provisions in our Sixth Amended and Restated Memorandum and Articles of Association may discourage, delay or prevent a change in control
6. 37You may be subject to limitations on the transfer of your ADSs
7. 38We may have acquisitions in the future, which involve risks and uncertainties, and if we don’t manage those risks well, it may harm our business
8. 39If we fail to successfully develop and introduce new services and products in time, our competitive position and ability to generate revenues could be harmed
9. 40We rely heavily on our information systems, and if we fail to further develop our technologies, or if our systems, software, applications, database or source code contain “bugs” or other undetected errors, our operations may be seriously disrupted
10. 41If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately report our results of operations or prevent fraud, and investor confidence may be materially and adversely affected
11. 42We are dependent on the renewal and maintenance of Title IV programs
12. 43We are subject to compliance reviews, which, if they result in a material finding of noncompliance, could affect our ability to participate in Title IV programs
13. 44If we fail to maintain any of our state authorizations, we would lose our ability to operate in that state and to participate in Title IV programs in that state
14. 45Our failure to comply with the Department of Education’s incentive compensation rules could result in sanctions and other liability
15. 46Our failure to comply with the Department of Education’s misrepresentation rules could result in sanctions and other liability
16. 47Our failure to comply with the Department of Education’s credit hour rule could result in sanctions and other liability
17. 48We are subject to sanctions if we fail to calculate accurately and make timely payment of refunds of Title IV program funds for students who withdraw before completing their educational programs
18. 49Investigations, legislative and regulatory developments, and general credit market conditions related to the student loan industry may result in fewer lenders and loan products and increased regulatory burdens and costs
19. 50Enforcement of laws related to the accessibility of technology continues to evolve, which could result in increased information technology development costs and compliance risks
20. 51We may not be able to pay any dividends on our Class A ordinary shares and, correspondingly, the ADSs
21. 52The laws of the Cayman Islands may not provide our shareholders with benefits comparable to those provided to shareholders of corporations incorporated in the United States
22. 53The voting rights of holders of ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to vote the ordinary shares underlying your ADSs
23. 54Holders of our ADSs may not be able to participate in rights offerings and may experience dilution of your holdings as a result
24. 55Holders of our ADSs may not receive distributions on our ordinary shares or any value for them if such distribution is illegal or if any required government approval cannot be obtained in order to make such distribution available to you