SEC Company Response from Ambow Education Holding Ltd. (AMBO) (CIK 0001494558) (AMBO) — Oct 20, 2017

Ambow Education Holding Ltd. (AMBO) (CIK 0001494558)
Date: Oct. 20, 2017 · CIK: 0001494558 · Accession: 0001144204-17-053323

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File numbers found in text: 001-34824

Date

October 20, 2017

Author

Assistant Director

Form

CORRESP

Company

Ambow Education Holding Ltd. (AMBO) (CIK 0001494558)

Letter

Division of Corporation Finance Securities and Exchange Commission Re: Ambow Education Holding Ltd. Form 20-F for Fiscal Year Ended December 31, 2016 Response Dated October 3, 2017 File No. 001-34824

Dear Mr. Spirgel:

On behalf of Ambow Education Holding Ltd., a Cayman Islands company (the “Company”), we have set forth below responses to the comments of the staff (the “Staff”) of the Securities and Exchange Commission contained in its letter of October 12, 2017 with respect to the Company’s Form 20-F for Fiscal Year Ended December 31, 2016 (the “2016 20-F”) filed on March 23, 2017 by the Company (File No.: 001-34824). For your convenience, the text of the Staff’s comments is set forth below, followed in each case by the Company’s responses.

Financial Statements

Consolidated Balance Sheets, page F-3 &

Consolidated Statements of Changes in Equity (Deficit), page F-7

1. We note the proposed revisions offered in your response to comment 5. Please also include an analysis of changes in each caption of stockholders’ equity and non-controlling interests in accordance with the guidance of Items 17(b) and 18(a) of Form 20-F and Rule 3-04 of Regulation S-X.

RESPONSE: The Company respectfully advises the Staff that the Ordinary Shares section in the Company’s Balance Sheet will be revised in future filings to separately disclose Class A ordinary shares and Class C ordinary shares as follows:

As of December 31,

RMB RMB US$

EQUITY

Class A Ordinary shares

(US$ 0.003 par value; 66,666,667 and 66,666,667 shares authorized; 33,556,762 and 33,990,680 shares issued and outstanding as of December 31, 2015 and 2016, respectively)

Class C Ordinary shares

(US$ 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, 2015 and 2016, respectively)

The Company respectfully advises the Staff that in its future filings, the Company would include the analysis of changes in each caption of stockholders’ equity and non-controlling interests as below:

Attributable to Ambow Education Holding Ltd.’s Equity

Class A Ordinary shares Class B Ordinary shares Class C Ordinary shares Additional

Retained

Earnings

Accumulated

other

Non- Total

(Note 16) (Note 16) (Note 16) paid-in Statutory (Accumulated comprehensive controlling Equity

Shares Amount Shares Amount Shares Amount capital reserves deficit) income(deficit) Interest (deficit)

Note

RMB

RMB RMB RMB RMB RMB RMB RMB

Balance as of January 1, 2015

27,552,058 2,984,775 - - 3,325,288 80,777 (3,451,958 ) (3,740 ) (4,247 ) (53,306 )

Conversion of Class B ordinary shares to Class A ordinary shares

2,984,775 (2,984,775 ) (87 ) - - - - - - - -

Exchange of Class A ordinary shares for Class C ordinary shares

(4,708,415 ) (90 ) - - 4,708,415 - - - - - -

Conversion of convertible loans to ordinary shares 7,244,013 - - - - 70,012 - - - - 70,146

Share-based compensation 17, 23(c) - - - - - - 50,117 - - - - 50,117

Issuance of ordinary shares for restricted stock award 484,331 - - - - (9 ) - - - - -

Appropriation to statutory reserves - - - - - - - (228 ) - - -

Foreign currency translation adjustment

- - - - - - - - - (1,215 ) - (1,215 )

Disposal of subsidiaries

- - - - - - - - - 9,084 5,845 14,929

Capital injection from minority shareholders - - - - - - - - - -

Unrealized gain on investment, net of income taxes - - - - - - - - - -

Non-controlling interests from reconsolidation of previously deconsolidated entities 26(b) - - - - - - - - - - (3,351 ) (3,351 )

Net income

- - - - - - - - 63,739 - 64,356

Balance as of December 31, 2015

33,556,762 - - 4,708,415 3,445,408 81,005 (3,388,447 ) 5,113 (973 ) 142,823

Attributable to Ambow Education Holding Ltd.’s Equity

Class A Ordinary Class B Ordinary Class C Ordinary

Retained Accumulated

shares shares shares Additional

Earnings other Non- Total

(Note 16) (Note 16) (Note 16) paid-in Statutory (Accumulated comprehensive controlling Equity

Shares Amount Shares Amount Shares Amount capital reserves deficit) income(deficit) Interest (deficit)

Note

RMB

RMB RMB RMB RMB RMB RMB RMB

Balance as of January 1, 2016

33,556,762 - - 4,708,415 3,445,408 81,005 (3,388,447 ) 5,113 (973 ) 142,823

Share-based compensation - - - - - - 7,828 - - - - 7,828

Issuance of ordinary shares for restricted stock award 433,918 - - - - (9 ) - - - - -

Foreign currency translation adjustment

- - - - - - - - - (1,160 ) - (1,160 )

Appropriation to statutory reserves - - - - - - - (2 ) - - -

Unrealized gain on investment, net of income taxes - - - - - - - - - 1,752 - 1,752

Capital injection from minority shareholders - - - - - - - - - -

Net loss

- - - - - - - - (35,700 ) - (1,318 ) (37,018 )

Balance as of December 31, 2016

33,990,680 - - 4,708,415 3,453,227 81,007 (3,424,149 ) 5,705 (1,495 ) 115,021

21. Segment Information, page F-46

2. We note your response to comment 8. In addition to the disclosures you propose to include in future filings, please include a reconciliation of gross profit to loss before income taxes as required by ASC 280-10-50-30(b).

RESPONSE: The Company respectfully advises the Staff that in its future filings, the Company would disclose a reconciliation of gross profit to loss before income taxes in segment information as below:

For the year ended December 31, 2015

(RMB in thousands) Better School Better Job

Tutoring K-12 Subtotal Career Enhancement Consolidated

RMB RMB RMB RMB RMB

Net Revenues 54,888 186,747 241,635 154,080 395,715

Cost of revenues (41,048 ) (116,819 ) (157,867 ) (88,078 ) (245,945 )

GROSS PROFIT 13,840 69,928 83,768 66,002 149,770

OPERATING EXPENSES

Selling and marketing (7,690 ) (964 ) (8,654 ) (38,976 ) (47,630 )

General and administrative (18,601 ) (37,787 ) (56,388 ) (48,337 ) (104,725 )

Research and development (1,773 ) - (1,773 ) (321 ) (2,094 )

Impairment loss (2,702 ) - (2,702 ) (7,630 ) (10,332 )

Unallocated corporate expenses - - - - (341,023 )

Total operating expenses (30,766 ) (38,751 ) (69,517 ) (95,264 ) (505,804 )

OPERATING (LOSS) INCOME (16,926 ) 31,177 14,251 (29,262 ) (356,034 )

OTHER INCOME (EXPENSE)

Interest (expenses) income, net (307 ) (285 ) (2,100 ) (2,385 )

Foreign exchange gain, net -

Other (loss) income, net (7,966 ) (237 ) (8,203 ) (7,538 )

Loss (income) on reconsolidation of previously deconsolidated entities (23,908 ) - (23,908 ) 6,439 (17,469 )

Gain on sale of investment available for sale - 1,971 1,971 - 1,971

Unallocated corporate other expenses - - - - (13,984 )

Total other (expenses) income (32,171 ) 1,756 (30,415 ) 5,028 (39,371 )

(LOSS) INCOME BEFORE INCOME TAX, NON-CONTROLLING INTERESTS AND DISCONTINUED OPERATIONS (49,097 ) 32,933 (16,164 ) (24,234 ) (395,405 )

Segment assets 139,905 331,127 471,032 175,056 646,088

Unallocated corporate assets - - - - 361,837

TOTAL ASSETS 139,905 331,127 471,032 175,056 1,007,925

For the year ended December 31, 2016

(RMB in thousands) Better School Better Job

Tutoring K-12 Subtotal Career Enhancement Consolidated

RMB RMB RMB RMB RMB

Net Revenues 47,985 222,592 270,577 141,439 412,016

Cost of revenues (33,465 ) (137,833 ) (171,298 ) (67,444 ) (238,742 )

GROSS PROFIT 14,520 84,759 99,279 73,995 173,274

OPERATING EXPENSES

Selling and marketing (5,516 ) (1,065 ) (6,581 ) (30,810 ) (37,391 )

General and administrative (21,929 ) (42,205 ) (64,134 ) (34,023 ) (98,157 )

Research and development (1,445 ) - (1,445 ) (924 ) (2,369 )

Impairment loss (21,779 ) - (21,779 ) (623 ) (22,402 )

Unallocated corporate expenses - - - - (56,986 )

Total operating expenses (50,669 ) (43,270 ) (93,939 ) (66,380 ) (217,305 )

OPERATING (LOSS) INCOME (36,149 ) 41,489 5,340 7,615 (44,031 )

OTHER INCOME (EXPENSE)

Interest income, net

Foreign exchange gain, net - - -

Other (loss) income, net (2,514 ) (2,319 ) (1,714 ) (4,033 )

Gain on sale of investment available for sale - 2,464 2,464 2,602

Unallocated corporate other income - - - - 13,945

Total other (expenses) income (2,408 ) 2,765 (1,378 ) 12,924

(LOSS) INCOME BEFORE INCOME TAX AND NON-CONTROLLING INTERESTS (38,557 ) 44,254 5,697 6,237 (31,107 )

Segment assets 119,878 381,786 501,664 190,088 691,752

Unallocated corporate assets - - - - 284,443

TOTAL ASSETS 119,878 381,786 501,664 190,088 976,195

Should you have any questions relating to the foregoing or wish to discuss any aspect of the Company’s filing, please contact our legal counsel Mitchell S. Nussbaum, Partner of Loeb & Loeb LLP, at 212-407-4159 or mnussbaum@loeb.com.

Sincerely,
Ambow Education Holding Ltd.

Show Raw Text

CORRESP
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filename1.htm

[AMBOW LETTERHEAD]

October 20, 2017

Larry Spirgel

Assistant Director

AD Office 11 – Telecommunications

Division of Corporation Finance

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

 Re: Ambow Education Holding Ltd.

Form 20-F for Fiscal Year Ended December 31, 2016

Response Dated October 3, 2017

File No. 001-34824

Dear Mr. Spirgel:

On behalf of Ambow Education Holding Ltd.,
a Cayman Islands company (the “Company”), we have set forth below responses to the comments of the staff (the “Staff”)
of the Securities and Exchange Commission contained in its letter of October 12, 2017 with respect to the Company’s Form
20-F for Fiscal Year Ended December 31, 2016 (the “2016 20-F”) filed on March 23, 2017 by the Company (File No.: 001-34824).
For your convenience, the text of the Staff’s comments is set forth below, followed in each case by the Company’s responses.

Financial Statements

Consolidated Balance Sheets, page F-3 &

Consolidated Statements of Changes in Equity (Deficit), page F-7

 1. We note the proposed revisions offered in your response to comment 5. Please also include an analysis of changes in each caption
of stockholders’ equity and non-controlling interests in accordance with the guidance of Items 17(b) and 18(a) of Form 20-F
and Rule 3-04 of Regulation S-X.

RESPONSE: The Company respectfully advises
the Staff that the Ordinary Shares section in the Company’s Balance Sheet will be revised in future filings to separately
disclose Class A ordinary shares and Class C ordinary shares as follows:

    As of December 31,

    2015
    2016
    2016

    RMB
    RMB
    US$

    EQUITY

    Class A Ordinary shares

    (US$ 0.003 par value; 66,666,667 and 66,666,667 shares authorized; 33,556,762 and 33,990,680 shares issued and outstanding as of December 31, 2015 and 2016, respectively)
      627
      636
      92

    Class C Ordinary shares

    (US$ 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, 2015 and 2016, respectively)
      90
      90
      13

The Company respectfully advises the Staff
that in its future filings, the Company would include the analysis of changes in each caption of stockholders’ equity and
non-controlling interests as below:

    Attributable
    to Ambow Education Holding Ltd.’s Equity

    Class A Ordinary
    shares
    Class B Ordinary
    shares
      Class C Ordinary shares
    Additional

    Retained

 Earnings

    Accumulated

 other

    Non-
    Total

    (Note
    16)
    (Note
    16)
    (Note
    16)
    paid-in
    Statutory
    (Accumulated
    comprehensive
    controlling
    Equity

    Shares
    Amount
    Shares
    Amount
    Shares
    Amount
    capital
    reserves
    deficit)
    income(deficit)
    Interest
    (deficit)

    Note

    RMB

    RMB

    RMB
    RMB
    RMB
    RMB
    RMB
    RMB
    RMB

    Balance
    as of January 1, 2015

      27,552,058
      487
      2,984,775
      87
      -
      -
      3,325,288
      80,777
      (3,451,958 )
      (3,740 )
      (4,247 )
      (53,306 )

    Conversion
    of Class B ordinary shares to Class A ordinary shares

      2,984,775
      87
      (2,984,775 )
      (87 )
      -
      -
      -
      -
      -
      -
      -
      -

    Exchange
    of Class A ordinary shares for Class C ordinary shares

      (4,708,415 )
      (90 )
      -
      -
      4,708,415
      90
      -
      -
      -
      -
      -
      -

    Conversion
    of convertible loans to ordinary shares
    15
      7,244,013
      134
      -
      -
      -
      -
      70,012
      -
      -
      -
      -
      70,146

    Share-based
    compensation
    17,
23(c)
      -
      -
      -
      -
      -
      -
      50,117
      -
      -
      -
      -
      50,117

    Issuance
    of ordinary shares for restricted stock award
    17
      484,331
      9
      -
      -
      -
      -
      (9 )
      -
      -
      -
      -
      -

    Appropriation
    to statutory reserves
    22
      -
      -
      -
      -
      -
      -
      -
      228
      (228 )
      -
      -
      -

    Foreign
    currency translation adjustment

      -
      -
      -
      -
      -
      -
      -
      -
      -
      (1,215 )
      -
      (1,215 )

    Disposal of subsidiaries

      -
      -
      -
      -
      -
      -
      -
      -
      -
      9,084
      5,845
      14,929

    Capital
    injection from minority shareholders
    27
      -
      -
      -
      -
      -
      -
      -
      -
      -
      -
      163
      163

    Unrealized
    gain on investment, net of income taxes
    5
      -
      -
      -
      -
      -
      -
      -
      -
      -
      984
      -
      984

    Non-controlling
    interests from reconsolidation of previously deconsolidated entities
    26(b)
      -
      -
      -
      -
      -
      -
      -
      -
      -
      -
      (3,351 )
      (3,351 )

    Net
    income

      -
      -
      -
      -
      -
      -
      -
      -
      63,739
      -
      617
      64,356

    Balance
    as of December 31, 2015

      33,556,762
      627
      -
      -
      4,708,415
      90
      3,445,408
      81,005
      (3,388,447 )
      5,113
      (973 )
      142,823

    Attributable to Ambow Education Holding Ltd.’s Equity

    Class A Ordinary
    Class B Ordinary
      Class C Ordinary

    Retained
    Accumulated

    shares
    shares
    shares
    Additional

    Earnings
    other
    Non-
    Total

    (Note 16)
    (Note 16)
    (Note 16)
    paid-in
    Statutory
    (Accumulated
    comprehensive
    controlling
    Equity

    Shares
    Amount
    Shares
    Amount
    Shares
    Amount
    capital
    reserves
    deficit)
    income(deficit)
    Interest
     (deficit)

    Note

    RMB

    RMB

    RMB
    RMB
    RMB
    RMB
    RMB
    RMB
    RMB

    Balance as of January 1, 2016

      33,556,762
      627
      -
      -
      4,708,415
      90
      3,445,408
      81,005
      (3,388,447 )
      5,113
      (973 )
      142,823

    Share-based compensation
    17
      -
      -
      -
      -
      -
      -
      7,828
      -
      -
      -
      -
      7,828

    Issuance of ordinary shares for restricted stock award
    17
      433,918
      9
      -
      -
      -
      -
      (9 )
      -
      -
      -
      -
      -

    Foreign currency translation adjustment

      -
      -
      -
      -
      -
      -
      -
      -
      -
      (1,160 )
      -
      (1,160 )

    Appropriation to statutory reserves
    22
      -
      -
      -
      -
      -
      -
      -
      2
      (2 )
      -
      -
      -

    Unrealized gain on investment, net of income taxes
    5
      -
      -
      -
      -
      -
      -
      -
      -
      -
      1,752
      -
      1,752

    Capital injection from minority shareholders
    27
      -
      -
      -
      -
      -
      -
      -
      -
      -
      -
      796
      796

    Net loss

      -
      -
      -
      -
      -
      -
      -
      -
      (35,700 )
      -
      (1,318 )
      (37,018 )

    Balance as of December 31, 2016

      33,990,680
      636
      -
      -
      4,708,415
      90
      3,453,227
      81,007
      (3,424,149 )
      5,705
      (1,495 )
      115,021

21. Segment Information, page F-46

 2. We note your response to comment 8. In addition to the disclosures you propose to include in future filings, please include
a reconciliation of gross profit to loss before income taxes as required by ASC 280-10-50-30(b).

RESPONSE: The Company respectfully
advises the Staff that in its future filings, the Company would disclose a reconciliation of gross profit to loss before income
taxes in segment information as below:

For the year ended December 31, 2015

    (RMB in thousands)
    Better School
    Better Job

    Tutoring
    K-12
    Subtotal
    Career
 Enhancement
    Consolidated

    RMB
    RMB
    RMB
    RMB
    RMB

    Net Revenues
      54,888
      186,747
      241,635
      154,080
      395,715

    Cost of revenues
      (41,048 )
      (116,819 )
      (157,867 )
      (88,078 )
      (245,945 )

    GROSS PROFIT
      13,840
      69,928
      83,768
      66,002
      149,770

    OPERATING EXPENSES

    Selling and marketing
      (7,690 )
      (964 )
      (8,654 )
      (38,976 )
      (47,630 )

    General and administrative
      (18,601 )
      (37,787 )
      (56,388 )
      (48,337 )
      (104,725 )

    Research and development
      (1,773 )
      -
      (1,773 )
      (321 )
      (2,094 )

    Impairment loss
      (2,702 )
      -
      (2,702 )
      (7,630 )
      (10,332 )

    Unallocated corporate expenses
      -
      -
      -
      -
      (341,023 )

    Total operating expenses
      (30,766 )
      (38,751 )
      (69,517 )
      (95,264 )
      (505,804 )

    OPERATING (LOSS) INCOME
      (16,926 )
      31,177
      14,251
      (29,262 )
      (356,034 )

    OTHER INCOME (EXPENSE)

    Interest (expenses) income, net
      (307 )
      22
      (285 )
      (2,100 )
      (2,385 )

    Foreign exchange gain, net
      10
      -
      10
      24
      34

    Other (loss) income, net
      (7,966 )
      (237 )
      (8,203 )
      665
      (7,538 )

    Loss (income) on reconsolidation of previously deconsolidated entities
      (23,908 )
      -
      (23,908 )
      6,439
      (17,469 )

    Gain on sale of investment  available for sale
      -
      1,971
      1,971
      -
      1,971

    Unallocated corporate other expenses
      -
      -
      -
      -
      (13,984 )

    Total other (expenses) income
      (32,171 )
      1,756
      (30,415 )
      5,028
      (39,371 )

    (LOSS) INCOME BEFORE INCOME TAX, NON-CONTROLLING INTERESTS AND DISCONTINUED OPERATIONS
      (49,097 )
      32,933
      (16,164 )
      (24,234 )
      (395,405 )

    Segment assets
      139,905
      331,127
      471,032
      175,056
      646,088

    Unallocated corporate assets
      -
      -
      -
      -
      361,837

    TOTAL ASSETS
      139,905
      331,127
      471,032
      175,056
      1,007,925

For the year ended December 31, 2016

    (RMB in thousands)
    Better School
    Better Job

    Tutoring
    K-12
    Subtotal
    Career
 Enhancement
    Consolidated

    RMB
    RMB
    RMB
    RMB
    RMB

    Net Revenues
      47,985
      222,592
      270,577
      141,439
      412,016

    Cost of revenues
      (33,465 )
      (137,833 )
      (171,298 )
      (67,444 )
      (238,742 )

    GROSS PROFIT
      14,520
      84,759
      99,279
      73,995
      173,274

    OPERATING EXPENSES

    Selling and marketing
      (5,516 )
      (1,065 )
      (6,581 )
      (30,810 )
      (37,391 )

    General and administrative
      (21,929 )
      (42,205 )
      (64,134 )
      (34,023 )
      (98,157 )

    Research and development
      (1,445 )
      -
      (1,445 )
      (924 )
      (2,369 )

    Impairment loss
      (21,779 )
      -
      (21,779 )
      (623 )
      (22,402 )

    Unallocated corporate expenses
      -
      -
      -
      -
      (56,986 )

    Total operating expenses
      (50,669 )
      (43,270 )
      (93,939 )
      (66,380 )
      (217,305 )

    OPERATING (LOSS) INCOME
      (36,149 )
      41,489
      5,340
      7,615
      (44,031 )

    OTHER INCOME (EXPENSE)

    Interest income, net
      106
      106
      212
      186
      398

    Foreign exchange gain, net
      -
      -
      -
      12
      12

    Other (loss) income, net
      (2,514 )
      195
      (2,319 )
      (1,714 )
      (4,033 )

    Gain on sale of investment  available for sale
      -
      2,464
      2,464
      138
      2,602

    Unallocated corporate other income
      -
      -
      -
      -
      13,945

    Total other (expenses) income
      (2,408 )
      2,765
      357
      (1,378 )
      12,924

    (LOSS) INCOME BEFORE INCOME TAX AND NON-CONTROLLING INTERESTS
      (38,557 )
      44,254
      5,697
      6,237
      (31,107 )

    Segment assets
      119,878
      381,786
      501,664
      190,088
      691,752

    Unallocated corporate assets
      -
      -
      -
      -
      284,443

    TOTAL ASSETS
      119,878
      381,786
      501,664
      190,088
      976,195

Should you have any questions relating to
the foregoing or wish to discuss any aspect of the Company’s filing, please contact our legal counsel Mitchell S. Nussbaum,
Partner of Loeb & Loeb LLP, at 212-407-4159 or mnussbaum@loeb.com.

Sincerely,

Ambow Education Holding Ltd.

/s/ Jin Huang

Chief Executive Officer

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