AMBO 10-K & 10-Q changes, risk factors and insider trading

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this interim report. Our consolidated financial statements have been prepared in accordance with U.S. GAAP. The following discussion and analysis containscontain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words “expect,” “anticipate,” “intend,” “believe,” or similar language. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Our business and financial performance are subject to substantial risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. In evaluating our business, you should carefully consider the information set forth under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Readers are cautioned not to place undue reliance on these forward-looking statements.

For the threesix months ended MarchJune 31,30, 2026, net revenues increased by $0.5$0.1 million to $2.8$5.2 million from $2.3$5.1 million in the same period of 2025. The increasesincrease werewas primarily due to net revenues generated by HybriU.educational program and services. For the three months ended June 30, 2026, net revenues decreased by $0.4 million to $2.4 million from $2.8 million in the same period of 2025. The decrease was primarily attributable to the decline in net revenues from HybriU licensing and sales, partially offset by growth in educational programs and services.

There were no acquisitions or disposals during the three-monthsix-month period ended MarchJune 31,30, 2026.

Gross profit was $1.3$2.8 million, $1.7$2.9 million, $1.5 million and $1.2 million in the threesix months ended MarchJune 31,30, 2025, and 2026 and the three months ended June 30, 2025, and 2026, respectively.

Gross profit margin was 57.7%55.3%, 56.2%, 53.3% and 60.2%51.4% in the six months ended June 30, 2025, and 2026 and the three months ended MarchJune 31,30, 2025, and 2026, respectively. The increasehigher gross margin for the six-month period in gross profit margin2026 was primarilymainly attributable to anthe increasehigher profit margins in inHybriU-related revenues from HybriU.activities.

Selling and marketing expenses. Our selling and marketing expenses primarily consisted of expenses relating to advertising, seminars, marketing and promotional trips and other community activities for brand promotion purposes. Our selling and marketing expenses increased by 20.0% to $0.3$0.6 million for the threesix months ended March 31,June 30, 2026, from $0.2$0.5 million for the same period of 2025. The increaseincreases in selling and marketing expenses forin the threesix months ended March 31,June 30, 2026 waswere primarily drivendue byto increasedhigher investmentspending inon NewSchooldigital enrollmentmarketing and theadvertising salescampaigns ofto HybriU.promote brand awareness.

General and administrative expenses. Our general and administrative expenses primarily consisted of compensation and benefits of administrative staff, amortization of intangibles, costs of third-party professional services, rental and utility payments relating to office and administrative functions, and depreciation and amortization of property and equipment used in our general and administrative activities, as well as bad-debt provision. Our general and administrative expenses decreased by 12.5% to $0.8$1.4 million for the six months ended June 30, 2026, from $1.6 million for the same period of 2025, and decreased by 25.0% to $0.6 million for the three months ended MarchJune 31,30, 2026, from $0.9 $0.8 million for the same period of 2025. The decreases were primarily attributeddue to aour one-timecontinued auditcost feecontrol incurredmeasures duringand theefficient first quarter of 2025.cost management.

Research and development. Our research and and development consisted of personnel-related expenses directly associated with our research and development organization, depreciationamortization of ofsoftware equipmenttechnology used in research and development, and allocated overhead. Our research and development expenses increased to $0.4 million for the six months ended June 30, 2026, from $0.2 million for the same period of 2025, and increased to $0.2 million for the three months ended MarchJune 31,30, 2026, from $0.1 million for the same period of 2025. The increase in research and development expenses for the three months ended March 31, 2026 was primarily driven by increased share-based compensation recognized in research and development expenses.

ThreeSix and three months ended MarchJune 31,30, 2026, compared with the six and three months ended MarchJune 31,30, 2025

Net revenues. Net revenues increased by $0.5 $0.1 million to $2.8$5.2 million for the threesix months ended MarchJune 31,30, 2026, from $2.3$5.1 million in the same period of 2025. The increaseincreases waswere primarily due to net revenues generated by Educational program and services. Net revenues decreased by $0.4 million to $2.4 million for the three months ended June 30, 2026, from $2.8 million in the same period of 2025. The decreases were primarily due to lower net revenues from generatedHybriU licensing and sales, partially offset by HybriU.growth in educational programs and services.

Cost of revenues. Cost of revenues increasedamounted to $2.3 million for the six months ended June 30, 2026, remaining relatively flat compared to $2.3 million in the same period of 2025. For the three months ended June 30, 2026, cost of revenues decreased by $0.1 million to $1.1$1.2 million for the three months ended March 31, 2026,million, from $1.0$1.3 million in the same period of 2025.

Gross profit. Gross profit increased to $1.7$2.9 million in the six months ended June 30, 2026, from $2.8 million in the same period of 2025, and decreased to $1.2 million in the three months ended MarchJune 31,30, 2026, from $1.3$1.5 million in the same period of 2025.

Gross profit margin. Gross profitmargin margin increased to 60.2%56.2% in the six months ended June 30, 2026, from 55.3% in the same period of 2025, and decreased to 51.4% in the three months ended MarchJune 31,30, 2026, from 57.7%53.3% in the same period of 2025.

Income.Income / (loss). In line with the above-mentioned factors, there was an income of $0.4$0.3 million for the threesix months ended MarchJune 31,30, 2026, compared with with the income of $0.1$1.9 million in the same period of 2025. Loss for the three months ended June 30, 2026 was $0.1 million, compared with the income of $1.8 million in the same period of 2025.

As of MarchJune 31,30, 2026, our consolidated current assets exceeded consolidated current liabilities by $6.3$5.5 million. With certain non-cash payment adjustments excluded, there would have been a positive working capital balance as of MarchJune 31,30, 2026. Our consolidated net assets were $8.7 $8.6 million as of MarchJune 31,30, 2026.

Our principal sources of liquidity were cash provided by operating activities,activities and bank borrowings. We had net cash provided by $1.0 million and net cash used in operating activities of $0.9 and $1.2$0.1 million for the threesix months ended MarchJune 31,30, 2025 and 2026, respectively. As of MarchJune 31, 30, 2026, we had $4.2$4.5 million in unrestricted cash and cash equivalents and $2.7 million in restricted cash.

The weighted average interest rate of the borrowings outstanding was 6.28% and 6.25%6.29% per annum as of December 31, 2025 and MarchJune 31,30, 2026, respectively. The fair values of the borrowings approximate approximate their carrying amounts. The weighted average borrowings for the threesix months ended MarchJune 31,30, 20252025, and 2026 were $2.7$3.0 million and $3.2$3.4 million, respectively.

There was no capitalization as additions to construction in progress as of MarchJune 31,30, 2026.

As of MarchJune 31,30, 2026, we employed sixeight full-time and part-time software and educational professionals. We spent $0.1 and $0.2 million and $0.4 million on research and development expenses for the threesix months ended March 31,June 30, 2025 and 2026, respectively.

There were no new off-balance sheet arrangements as of MarchJune 31,30, 2026.

The following table presents a summary of the contractual long-term obligations and payments by period as of MarchJune 31,30, 2026.