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COMMITMENTS AND CONTINGENCIES | 12 Months Ended
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Dec. 31, 2018
COMMITMENTS AND CONTINGENCIES |
COMMITMENTS AND CONTINGENCIES | 21. COMMITMENTS AND CONTINGENCIES Operating lease commitments Future minimum payments under non-cancelable operating leases related to offices and kindergartens consisted of the following at December 31, 2018:
Years ending December 31, |  |
2019 |  | 16,607
2020 |  | 15,075
2021 |  | 13,155
2022 |  | 12,002
2023 and thereafter |  | 75,758
|  | 132,597
Payments under operating leases are expensed on a straight-line basis over the periods of their respective leases. The terms of the leases do not contain rent escalation or contingent rents. For the years ended December 31, 2016, 2017 and 2018, total rental expense for all operating leases amounted to $10,580, $11,760 and $16,195, respectively. Purchase commitments Future minimum purchase obligations payments under non-cancelable purchase agreements related to curriculum collaboration with international institutions consisted of the following at December 31, 2018:
Years ending December 31, |  |
2019 |  | 644
2020 |  | 644
2021 |  | 408
2022 |  | 277
2023 and thereafter |  | 505
|  | 2,478
Contingencies In order to operate kindergartens, the Group is required to obtain and maintain various approvals, licenses, and permits and to fulfill registration and filing requirements pursuant to applicable laws and regulations. For instance, to establish a kindergarten, a private school operation permit from the local education bureau and registration certificate for private non-enterprise entities with the local civil affairs bureau will be required, and the Group is required to periodically renew the private school operation permit and pass annual inspections conducted by the relevant government authorities. Given the significant amount of discretion the local PRC authorities may have in interpreting, implementing and enforcing relevant rules and regulations, as well as other factors beyond control of the Group, while the Group intends to obtain all requisite permits and complete necessary filings and registrations on a timely basis for the Group’s operations, the Group cannot assure to obtain all required permits in time. If the Group fails to receive required permits or certificates in a timely manner, or at all, the Group may be subject to fines, confiscation of the gains derived from the non-compliant operations, suspension of the non-compliant teaching facilities or liability to indemnify economic loss suffered by the Group’s students, which may materially and adversely affect the Group’s business, financial conditions and results of operations. Currently, the Group has not received private school operation permits or registration certificates for private non-enterprise entities for certain directly operated kindergartens, and the Group is in the process of obtaining the permits or certificates for these kindergartens. During the years ended December 31, 2016, 2017, 2018, net revenues generated from these kindergartens were $4,489, $7,241 and $11,685, respectively. On November 7, 2016, the Standing Committee of the National People's Congress promulgated the Decision on Amending the Law on the Promotion of Private Education of the PRC (the "Amended Private Education Law"), which became effective on September 1, 2017. On December 29, 2018, the Decision of the Standing Committee of the National Peoples Congress on Amending the Seven Laws of the Labor Law of the PRC was promulgated by Order No. 24 of the President of the PRC and took into effect on the same date, which made two minor adjusts to Article 26 and Article 64 of the Amended Private Education Promotion Law. Due to lack of authoritative interpretation and implementation guidance, the potential impact related to the Group not fully complying with the Amended Private Education Law or any relevant regulations cannot be reasonably estimated at the issuance of this report. As a result, the Group did not record any liabilities pertaining to this. The Company, three of its directors and officers, and certain underwriters for the Company's initial public offering were named as defendants in a putative class action filed in the Superior Court of the State of California for the County of San Mateo. The complaint alleges that the Company’s registration statements contained misstatements or omissions regarding its business, operations and prospects in violation of the U.S. securities laws. Certain preliminary motion papers have been filed, but the court has not yet ruled. On September 5, 2018, this case was stayed on forum non conveniens grounds. The Company and certain of its directors and officers were named as defendants in a putative class action filed, on November 21, 2018, in the Supreme Court of the State of New York County of Queens. The complaint alleges that the Company's registration statements contained misstatements or omissions regarding the Company’s business and operations in violation of the U.S. securities laws. The complaint states that the plaintiffs seek to represent a class of persons who allegedly suffered damages as a result of their purchase of the Company's securities issued pursuant to and traceable to the Company's initial public offering on or about September 27, 2017, and alleges violations of the U.S. securities laws. As this case remains in its preliminary stage, the likelihood of any unfavorable outcome or any estimate of the amount or range of any potential loss cannot be reasonably estimated at the present time. As a result, the Group did not record any liabilities pertaining to these.

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