Group 1 - China Liberal Education (CLEU) stock experienced a significant rally, soaring 58.4% during normal trading hours on Friday, with approximately 18 million shares traded, far exceeding its daily average of around 560,000 shares [1] - The surge in CLEU stock occurred without any clear news or announcements from the company, indicating potential volatility associated with penny stocks [1] - On Monday, CLEU stock gave up some of its gains, trading down 16.3% with about 832,000 shares changing hands, which is already above its daily average trading volume [2] Group 2 - The nature of penny stocks, like CLEU, often makes them susceptible to volatility and manipulation, which investors should consider before making investment decisions [1] - InvestorPlace typically refrains from publishing commentary on companies with a market cap of less than $100 million or those that trade less than 100,000 shares daily, due to the risks associated with penny stocks [3]

Corporate Structure and Operations - China Liberal Education Holdings Limited operates through its wholly owned PRC subsidiaries, China Liberal (Beijing) Education Technology Co., Ltd. and Beijing Oriental Wisdom Culture Development Co., Ltd.[26] - The company has consolidated the financial results of its former affiliated entities, Fuzhou Melbourne Polytechnic and Strait College of Minjiang University, for the period from September 2, 2022, to August 31, 2023[25] - The company has a corporate structure that limits direct equity ownership in its subsidiaries, which may affect investor interests[26] - The company directly holds 100% of the equity interests in its subsidiaries, with operations conducted in China through wholly owned PRC subsidiaries[205] Regulatory Environment - The PRC government has recently implemented regulatory actions affecting business operations, which could materially impact the company's operations and the value of its ordinary shares[31] - The company is subject to the Holding Foreign Companies Accountable Act, which could lead to delisting if its auditor is not inspected by the PCAOB for two consecutive years[32] - Future regulatory changes could impose additional restrictions on the company's ability to conduct business, offer securities, or repatriate funds[37] - The company is classified as an existing enterprise under the new Overseas Listings Rules and is not required to file with the CSRC at this time[36] - The company has not received any notices from authorities regarding its PRC subsidiaries being classified as critical information infrastructure operators[31] - The company has not received any formal inquiries or regulatory objections from the CSRC regarding its listing or subsequent offerings as of the date of the annual report[138] - Recent regulatory actions in China have increased scrutiny over overseas listings and foreign investments, potentially impacting the company's ability to raise capital[125] - The PRC Data Security Law imposes strict data security and privacy obligations, which could affect the company's operations and compliance costs[131] - The Cybersecurity Review Measures require network platform operators with over one million users to undergo cybersecurity review before listing abroad, which may impact the company's operations if applicable[134] - The interpretation and enforcement of newly promulgated laws and regulations in China are subject to substantial uncertainties, which may impact the company's business[140] Financial Performance and Projections - Revenue from Sino-foreign Jointly Managed Academic Programs represented 68.5%, 28.8%, and nil of the company's net revenues for the years ended December 31, 2021, 2022, and 2023, respectively[53] - The company experienced a net loss in fiscal years 2023, 2022, and 2021, and expects to continue investing in operations for the foreseeable future[46] - The company has not declared any dividends or made distributions to shareholders or U.S. investors as of the date of the annual report[38] - Cash transfers from PRC subsidiaries to entities outside of China are subject to PRC government controls on currency conversion, which may restrict the company's ability to pay dividends[42] - The company anticipates challenges in generating significant revenues from other lines of business following the cessation of revenue from FMP and Strait College[56] - Selling expenses were approximately $0.23 million, $0.28 million, and $0.15 million for the years 2021, 2022, and 2023, respectively, with expectations for future increases[72] - Increased labor costs in the PRC, including statutory employee benefits, are expected to adversely affect the company's financial condition and results of operations[107] - The company may incur increased costs to comply with existing and new laws, impacting overall financial performance[128] Shareholder and Investment Considerations - The company has granted a total of 4,250,000 Ordinary Shares as share incentives to employees and directors, which may increase share-based compensation expenses[105] - The company does not expect to pay any cash dividends in the foreseeable future, relying instead on price appreciation of its Ordinary Shares for returns on investment[195] - The trading price of the company's Ordinary Shares is likely to be volatile, influenced by various factors including revenue variations and announcements of new investments[188] - The company may be classified as a passive foreign investment company (PFIC), which could have adverse U.S. federal income tax consequences for U.S. taxpayers holding its Ordinary Shares[203] - The company has a unique corporate structure as an offshore holding company incorporated in the Cayman Islands, which poses specific risks to investors[205] Acquisitions and Business Developments - On July 14, 2022, the Company completed the acquisition of Oriental Wisdom, an integrated education services provider in China[208] - On September 2, 2022, the Company finalized the acquisition of Wanwang, which operates two colleges, FMP and Strait College[208] - On April 30, 2023, the Company terminated the Merger Agreement with AIWAYS, which was intended to merge AIWAYS into a wholly-owned subsidiary of the Company[210] - On September 29, 2023, the Company issued 18,000,000 ordinary shares at a price of $0.50 per share, raising a total of $9,000,000[211] - On December 28, 2023, the Company agreed to transfer all equity interests in Wanwang for a consideration of $40 million, with operational results consolidated until August 31, 2023[213] - The Company expects to close the transaction related to the transfer of Wanwang by June 30, 2024[213] Risks and Challenges - The company may face risks related to natural disasters and public health epidemics, which could disrupt operations and adversely affect financial performance[57][58] - The competitive landscape in China's education market is intense, with significant competition for student enrollments and faculty recruitment, which could impact market share and revenues[82] - The company faces challenges in recruiting and retaining qualified faculty members, which are crucial for the quality of its training services[75] - The company may not successfully identify or consummate strategic alliances or acquisitions, which could hinder growth and profitability[81] - Privacy concerns and increased regulation regarding data utilization could adversely affect the company's ability to collect and leverage user data[85] - The company may incur liability for unauthorized use of third-party materials by end users, which could lead to costly litigation and harm its brand reputation[91] - The company has faced operational risks due to significant reliance on the Chinese market, which may impact business continuity and share value[216] Compliance and Internal Controls - The company identified five material weaknesses in its internal control over financial reporting as of December 31, 2023, which could lead to material misstatements in financial statements[94] - The company plans to hire more qualified accounting personnel and implement continuous U.S. GAAP training to address identified weaknesses in internal controls[96] - The company is currently accredited as a "high and new technology enterprise" (HNTE) and enjoys a preferential tax rate of 15%, with the status subject to renewal in December 2025[101] - If the company fails to maintain its HNTE status, it will be subject to the standard PRC enterprise income tax rate of 25%[102] - The company is subject to significant legal, accounting, and other expenses as a public company, which may strain its financial resources[103] - The company may face challenges in completing business combinations efficiently due to complicated merger and acquisition regulations in China[110] - The company may face challenges in enforcing shareholder rights due to its incorporation under Cayman Islands law, limiting access to corporate records[115]

BEIJING, April 15, 2024 /PRNewswire/ -- China Liberal Education Holdings Limited (Nasdaq: CLEU) ("China Liberal", the "Company", "we", "our", or "us"), a China-based company that provides technological consulting services for smart campus solutions and other educational services, today announced its audited financial results for the fiscal year ended December 31, 2023. Ms. Ngai Ngai Lam, Chairwoman and CEO of China Liberal, commented, "Our revenue experienced a decline in fiscal year 2023 due to termination ...

BEIJING, Feb. 5, 2024 /PRNewswire/ -- China Liberal Education Holdings Limited ("China Liberal" or the "Company") (Nasdaq: CLEU), a China-based company that provides smart campus solutions and other educational services, today announced that the Company received a written notification (the "Notification Letter") from the Listing Qualifications Department of the Nasdaq Stock Market LLC ("Nasdaq") on February 2, 2024,  informing the Company that it has regained compliance with the Nasdaq's minimum bid price r ...

BEIJING, Jan. 17, 2024 /PRNewswire/ -- China Liberal Education Holdings Limited ("China Liberal" or the "Company") (NASDAQ: CLEU), a China-based company that provides smart campus solutions and other educational services, today announced that the Company plans to effect a share consolidation of fifteen (15) ordinary shares with par value of $0.001 per share each in the Company's issued and unissued share capital into one (1) ordinary share with par value of US$0.015 (the "Share Consolidation"). As a result ...

Cash and Liquidity - As of June 30, 2023, the company had cash of approximately $12.2 million, indicating a negative cash flow from operations for the six months ended[29]. - The company believes its current cash will be sufficient to meet working capital needs for at least the next 12 months[29]. - The company’s liquidity is influenced by the level of operations, sales contracts, execution progress on customer contracts, and timing of accounts receivable collections[29]. Revenue Generation - The company’s revenues are primarily derived from providing a wide range of educational services and programs, reported net of all value-added taxes[50]. - The Company generates revenue from Sino-foreign Jointly-Managed Academic Programs, receiving 30% to 50% of student tuitions based on partnerships with Chinese universities[51]. - The Company has developed and sold over 16 English textbooks and course materials, recognizing revenue upon delivery[52]. - Overseas Study Consulting Services were discontinued in January 2023, with 90% of fees collected being non-refundable and recognized ratably over the service period[53]. - Technological consulting services utilize advanced IT solutions to improve operational efficiency for Chinese universities, with contracts primarily on a fixed-price basis[55]. - Revenue from course fees for the six months ended June 30, 2023, was $7,664,887, while there was no revenue reported for the same period in 2022[131]. - Revenue from tailored job readiness training services increased to $944,944 in the first half of 2023, compared to $93,483 in the same period of 2022[131]. Financial Condition and Assets - The company has not recorded any allowance for advances to suppliers, considering all advances to be fully realizable as of June 30, 2023[32]. - The company’s financial condition may be negatively impacted by risks related to political, economic, and legal environments in China[26]. - The company has not experienced losses from regulatory actions in China but acknowledges potential future impacts on business operations[26]. - The company’s right-of-use assets and lease liabilities are recognized based on the present value of future minimum lease payments[33]. - The company assesses goodwill for impairment annually and more frequently if events indicate potential impairment[42]. - The company’s financial instruments' fair value as of June 30, 2023, approximates its carrying value due to the short-term nature of assets and liabilities[36]. - The company recorded a total provisional goodwill of $73.7 million from two acquisitions completed in 2022, which is expected to enhance business expansion and synergies[92]. - Property and equipment, net, decreased to $8,762,072 as of June 30, 2023, from $10,194,930 at the end of 2022, representing a decline of approximately 13.9%[94]. - The total prepaid expenses and other current assets, net, as of June 30, 2023, were $423,284, a significant decrease from $3,475,714 at the end of 2022, indicating a reduction of about 87.8%[88]. Liabilities and Debt - The Company reported contract liabilities of $7.8 million as of June 30, 2023, primarily consisting of deferred revenue from course fees and job readiness training services[62]. - The Company’s technological consulting contracts may include significant financing components, affecting revenue recognition and cash flow[56]. - As of June 30, 2023, the total short-term bank loan increased to $31.519 million from $20.784 million as of December 31, 2022, reflecting a growth of approximately 51.5%[102]. - The effective interest rate for the unsecured short-term bank loan decreased to 3.8% as of June 30, 2023, down from 4.7% as of December 31, 2022[103]. - Loans from third parties had a weighted average annual effective interest rate of 16.4% as of June 30, 2023, compared to 8.7% as of December 31, 2022[106]. - The company has contingent consideration of $19.3 million related to the acquisition of Wanwang, dependent on performance conditions[107]. Taxation - Total taxes payable as of June 30, 2023, amounted to $1.346 million, slightly decreasing from $1.355 million as of December 31, 2022[105]. - The effective tax rate for the six months ended June 30, 2023, was 0.5%, compared to 0.0% for the same period in 2022[117]. - The company’s corporate income taxes for the six months ended June 30, 2023, included a current tax provision of $1,966, compared to $42 for the same period in 2022[115]. Shareholder Information - The company issued a total of 18 million ordinary shares at $0.50 per share in September 2023, raising net proceeds of $8.9 million[123]. - The company’s total ordinary shares issued and outstanding remained at 31,598,333 as of June 30, 2023, consistent with December 31, 2022[123]. Operational Segments - The Company operates four segments: course fees, Sino-foreign Jointly Managed Academic Programs, Overseas Study Consulting Services, and Technological Consulting Services for Smart Campus Solutions[129]. - The majority of the Company's revenues for the six months ended June 30, 2023, were generated in the PRC[130]. Regulatory and Compliance - The VAT rates applicable to the Company's PRC subsidiaries range from 3% to 6%[67]. - Appropriations to the statutory surplus reserve are required to be at least 10% of after-tax net income until the reserve equals 50% of the entity's registered capital[125]. - The statutory reserve may be applied against prior year losses and used for general business expansion but is not distributable as cash dividends[125]. - Management has not identified any subsequent events that require accrual or disclosure as of the date the consolidated financial statements were issued[132].

Company Structure and Operations - China Liberal operates as a holding company incorporated in the Cayman Islands, with no material operations of its own, conducting operations through wholly owned PRC subsidiaries and affiliated entities[19]. - The company holds 100% equity interests in its subsidiaries and consolidates the financial results of affiliated entities under U.S. GAAP[19]. - The PRC subsidiaries have obtained necessary licenses, including a business license and a Legal Person Certificate of Public Institution, to operate in China[27]. - The company relies on dividends and distributions from its PRC subsidiaries for cash requirements, which are based on their distributable earnings[31]. - The company must maintain Sino-foreign program permits for its colleges, and losing these permits could substantially affect its financial condition[50]. - The cooperation agreements with affiliated entities may not effectively provide control, impacting the ability to consolidate financial results and potentially affecting business operations[123]. - A significant portion of revenue is derived from affiliated entities, and any inability to consolidate their financial results could materially affect operating results and financial condition[124]. - Revenue from affiliated entities constituted approximately 55.0% of total revenue for the fiscal year ended December 31, 2022[127]. - The cooperation agreement with Minjiang University for the operation of FMP has a term of 42 years, while the agreement for Strait College is for 20 years[127]. - The company relies heavily on cooperation agreements for revenue, and termination of these agreements could severely impact business operations and financial position[127]. Financial Performance - The company experienced a net loss of $1.0 million in fiscal year 2022, compared to a net income of $1.2 million in fiscal year 2020, indicating a significant decline in profitability[67]. - Revenue for fiscal year 2022 was $11.6 million, reflecting a 196.8% increase from $3.9 million in fiscal year 2021, which had decreased by 22.2% from $5.0 million in fiscal year 2020[67]. - Selling expenses increased to approximately $0.4 million in fiscal year 2022, up from $152,759 in fiscal year 2021 and $229,656 in fiscal year 2020, indicating rising costs associated with marketing efforts[71]. - The company does not currently require dividends from its PRC subsidiaries for working capital but may need additional cash resources in the future due to changes in business conditions[35]. Regulatory Environment - The company believes it is compliant with current regulations and does not anticipate needing additional approvals for operations or securities offerings[28]. - Recent regulatory actions in China may impact the ability to conduct overseas offerings, but the company is currently not required to file with the CSRC under the new Overseas Listings Rules[29]. - The PRC government has significant authority in regulating the company's operations, which could result in material changes to its business and the value of its shares[40]. - The company is subject to ongoing supervision by PRC authorities, which may include regulatory changes that could impact its operations[46]. - The PRC Data Security Law imposes obligations on data activities, which could affect the company's operations and compliance costs[138]. - The PRC legal system presents uncertainties that could adversely affect the company, as it is based on written statutes with limited precedential value[147]. - Recent laws and regulations in the PRC may not sufficiently cover all economic activities, leading to uncertainties in interpretation and enforcement[148]. - The company may incur fines ranging from RMB1 million (approximately $157,255) to RMB10 million (approximately $1,572,550) for non-compliance with filing requirements[143]. - The Overseas Listings Rules require China-based companies to file with the CSRC for future securities offerings, introducing uncertainty in compliance[144]. Market and Competition - The company faces intense competition in China's education market, which could lead to pricing pressure and loss of market share, adversely affecting gross billings and net revenues[84]. - The company faces challenges in increasing student enrollments due to factors such as market competition and changes in government policies[52]. - The market for smart campus solutions is characterized by rapidly changing technology, and the company must innovate to meet evolving client needs to maintain market share[61]. Cybersecurity and Data Compliance - The company has not been involved in any cybersecurity investigations and does not expect to be subject to cybersecurity reviews, as it holds personal data of fewer than one million individual clients[25]. - The company has not been subject to the Cybersecurity Review Measures as of the report date, but future applicability remains uncertain[141]. - The Cybersecurity Review Measures require companies with over one million users to undergo reviews, which could impact future operations if enacted[196][197]. - The company believes it is compliant with current regulations but acknowledges potential future uncertainties regarding cybersecurity laws and their implementation[198]. Human Resources and Operational Challenges - The company faces risks related to the interpretation of PRC laws and potential future government actions that could materially affect operations and share value[20]. - The company must enhance its sales and marketing strategies to effectively increase student enrollment and maintain competitive positioning in the market[72]. - The company has ceased to recommend new foreign teachers since 2019, which may affect its compliance with human resources regulations and operational capabilities[77]. - The company’s future success depends on attracting and retaining qualified employees, and competition for talent in the PRC is intense[88]. Internal Controls and Compliance - The company identified five material weaknesses in its internal control over financial reporting as of December 31, 2022, including insufficient U.S. GAAP experience among accounting staff and inadequate financial statement closing processes[96]. - The company plans to hire more qualified accounting personnel and implement continuous U.S. GAAP training programs to address identified weaknesses in internal controls[98]. - The company is subject to reporting obligations under U.S. securities laws, and failure to maintain effective internal controls could result in inaccuracies in financial statements[100]. Taxation and Financial Obligations - The modified Enterprise Income Tax Law imposes a uniform income tax rate of 25% on all enterprises, with a preferential rate of 15% for "high and new technology enterprises" (HNTEs) like China Liberal Beijing and Oriental Wisdom[103]. - The company may face restrictions on transferring cash or assets out of the PRC or Hong Kong due to government interventions[170]. - Current PRC regulations allow dividends to be paid only from accumulated profits, with a minimum of 10% of after-tax profits required to be appropriated to reserve funds[155]. - The withholding tax rate on profits distributed to offshore holding companies is generally 10%, but may be reduced to 5% under certain conditions[176]. - The company has not yet applied for a Hong Kong tax resident certificate, which is necessary to qualify for the reduced withholding tax rate[177]. Future Outlook and Strategic Initiatives - The company plans to continue investing in operations to achieve profitability, but past net losses may strain future growth and operational efficiency[68]. - The company may engage in strategic alliances or acquisitions, but failure to identify suitable opportunities could impair growth and profitability[83]. - The company does not expect to pay dividends in the foreseeable future, relying instead on price appreciation for returns on investment[206]. - The trading price of the company's Ordinary Shares is likely to be volatile, influenced by factors such as revenue variations and announcements of new investments or partnerships[199].

Revenue Performance - The company's revenue from Sino-foreign Jointly Managed Academic Programs was not significantly impacted by COVID-19, as Chinese universities resumed on-site schooling since May 2020[24]. - Revenue from Sino-foreign Jointly Managed Academic Programs for the six months ended June 30, 2022, was $2,147,608, an increase of 51.1% compared to $1,420,418 for the same period in 2021[56]. - Revenue from Overseas Study Consulting Services increased significantly to $329,678 for the six months ended June 30, 2022, compared to $26,033 in the prior year, reflecting a growth of 1,266.5%[56]. - Total revenue for the six months ended June 30, 2022, was $2,737,410, representing a 47.9% increase from $1,850,551 in the same period of 2021[56]. - Total revenue for the six months ended June 30, 2022, was $2,737,410, an increase from $2,147,608 in the same period of 2021, representing a growth of approximately 27.4%[114]. Financial Position - As of June 30, 2022, cash at bank in Hong Kong amounted to $12,051,046, down from $31,860,607 as of December 31, 2021[28]. - As of June 30, 2022, accounts receivable totaled $3,172,192, an increase from $2,462,550 as of December 31, 2021, representing a growth of approximately 28.8%[72]. - The company's total property and equipment, net, decreased to $26,439 as of June 30, 2022, from $35,384 as of December 31, 2021, reflecting a decline of approximately 25.2%[88]. - Total assets as of June 30, 2022, amounted to $56,412,408, compared to $44,257,798 in 2021, showing a significant increase of approximately 27.4%[114]. - Total liabilities as of June 30, 2022, were $1,510,274, an increase from $1,184,870 in 2021, representing a rise of about 27.5%[114]. Customer Concentration and Risks - A significant portion of the company's revenue is concentrated on two large customers, which poses a risk to operating results if these customers are lost[27]. - For the six months ended June 30, 2022, two customers accounted for approximately 50.0% and 32.3% of the Company's total revenue, compared to 41.5% and 40.7% in 2021[101]. Accounts and Receivables - The company has not recorded any allowance for uncollectible accounts as it considers all accounts receivable fully collectible as of June 30, 2022[29]. - The company has not incurred any bad debts with Chinese universities/colleges and considers contract receivables fully collectible as of June 30, 2022[30]. - The company believes that the temporary delay in tuition payments from partnering schools will not result in collectability risk[24]. Taxation - The corporate income tax benefit from the Preferential Tax Treatment for the six months ended June 30, 2022, decreased corporate income taxes by $446,189, compared to $214,137 for the same period in 2021[94]. - The effective tax rate for the six months ended June 30, 2022, was 0.0%, significantly lower than 36.2% for the same period in 2021[97]. - China Liberal Beijing has been entitled to a reduced income tax rate of 15% since December 2016, with its HNTE status renewed in December 2019[93]. Operational Insights - The average student dropout rate for Sino-foreign Jointly Managed Academic Programs historically remained below 1%[43]. - The Company has developed and edited over 16 English textbooks and course materials, which are sold to students enrolled in the Sino-Foreign Jointly Managed Academic Programs[46]. - The Company’s technological consulting services include project planning and data management application customization, primarily on a fixed-price basis[48]. - The Company’s overseas study consulting services are typically performed under a one-on-one private tutoring model lasting four to six months, with 90% of the consulting service fee being non-refundable[47]. - The company has maintained no complaints from host universities/colleges regarding service deficiencies for the six months ended June 30, 2022, and 2021[44]. Shareholder Information - The Company had a total of 21,848,333 ordinary shares issued and outstanding as of June 30, 2022, an increase from 13,848,333 as of December 31, 2021[105]. - The company issued 2.75 million ordinary shares on October 14, 2022, as approved by the Board of Directors[121]. Future Outlook - The ongoing uncertainties related to COVID-19 may continue to negatively impact the company's revenue and cash flows, particularly in overseas study consulting services[26]. - The company expects no material adverse impact from ongoing legal actions, indicating a stable outlook for its financial position[119]. - Future growth strategies include enhancing the quality of teaching and ensuring management stability at acquired institutions[120]. Accounting and Compliance - The company plans to adopt new accounting guidance effective January 1, 2023, which may impact its consolidated financial statements[70]. - The functional currency for the company's primary operations is the Chinese Yuan (RMB), while the reporting currency is the U.S. Dollar (US$)[64]. - The restricted amounts as determined pursuant to PRC statutory laws totaled $898,405 as of June 30, 2022, compared to $719,804 as of December 31, 2021[108]. Expenses and Capital Expenditures - Share-based compensation expense for the six months ended June 30, 2021, was $53,250, while there was no expense recorded for the same period in 2022[62]. - The company reported capital expenditures of $3,500 for the six months ended June 30, 2022, compared to $0 in the same period of 2021[117]. - Depreciation expense for the six months ended June 30, 2022, was $7,402, compared to $10,810 for the same period in 2021, indicating a decrease of approximately 31.5%[88].

Financial Performance - The company reported a net loss of $566,695 for the year ended December 31, 2021, a significant improvement from a net loss of $1,434,544 in 2020[14]. - For the year ended December 31, 2021, the net loss was $566,695, a significant improvement from a net loss of $1,434,544 in 2020, representing a reduction of approximately 60.5%[22]. - The gross profit for the year ended December 31, 2021, was $1,032,986, compared to $348,790 in 2020, indicating a substantial increase in profitability[14]. - The gross profit for the combined entities was $3,793,384, with China Liberal Education Holdings Limited reporting a gross profit of $2,760,398 and Beijing Oriental Wisdom Culture Development Co., Ltd. reporting $1,032,986[105]. - The net loss for the combined entities was $1,816,576, with China Liberal Education Holdings Limited reporting a net loss of $1,249,881 and Beijing Oriental Wisdom Culture Development Co., Ltd. reporting a loss of $566,695[106]. Assets and Liabilities - Total assets increased to $2,544,754 as of December 31, 2021, up from $2,018,623 in 2020[10]. - The company's total liabilities rose to $3,070,505 as of December 31, 2021, compared to $1,972,231 in 2020[11]. - Shareholders' equity showed a deficit of $525,751 as of December 31, 2021, compared to a positive equity of $46,392 in 2020[13]. - The company's accounts payable stood at $752,244 as of December 31, 2021, reflecting liabilities primarily related to business partnerships[72]. - The total liabilities for the combined entities were reported at $6,945,848, with current liabilities at $6,917,337 and non-current liabilities at $28,511[103]. Cash Flow and Liquidity - The company incurred an operating cash outflow of $1,028,849 in 2021, compared to $52,209 in 2020, indicating cash flow challenges[5]. - The company incurred an operating cash outflow of $283,138 for the year ended December 31, 2021, compared to $290,276 in 2020, indicating a slight improvement in cash management[22]. - The company reported a net cash decrease of $10,387 for the year ended December 31, 2021, compared to a net cash decrease of $112,550 in 2020, indicating better cash flow management[22]. - The company’s cash and cash equivalents at the end of 2021 were $7,764, down from $18,151 at the end of 2020, indicating a decline in liquidity[22]. - The company has expressed substantial doubt about its ability to continue as a going concern due to recurring losses and accumulated deficits[5]. Operational Efficiency - Operating expenses decreased to $1,408,106 in 2021 from $1,988,382 in 2020, reflecting improved cost management[14]. - The allowance for doubtful accounts decreased to $382,137 as of December 31, 2021, from $670,981 in 2020, reflecting improved collection efforts[28]. - The company's total prepaid expenses and other current assets decreased to $68,091 as of December 31, 2021, from $103,203 as of December 31, 2020[63]. - Plant and equipment net value dropped to $52,316 as of December 31, 2021, down from $134,163 in 2020, with depreciation expenses of $96,656 for 2021 compared to $164,032 for 2020[67]. - Intangible assets net value decreased to $526,427 as of December 31, 2021, from $581,333 in 2020, with amortization expenses of $70,571 in 2021 compared to $68,827 in 2020[69]. Strategic Initiatives - The company plans to continue its strategic initiatives to obtain additional funding and implement its business plan to address going concern uncertainties[23]. - The company entered into an agreement to acquire Oriental Wisdom for 7,000,000 Ordinary Shares, with an initial valuation of $5,500,000 for 5,000,000 shares delivered at closing[102]. - The preliminary purchase price for the acquisition of Beijing Oriental Wisdom Culture Development Co., Ltd. was $6,532,000, which included common shares issuance valued at $4,332,000[115]. - Goodwill recognized from the acquisition amounted to $7,057,751, representing the excess of the purchase price over the fair value of identifiable net assets acquired[115]. - The total minimum lease payment for 2022 was reported at $433,264, with a significant portion of $420,390 due within the year[76]. Revenue Generation - Total revenues for China Liberal Education Holdings Limited reached $3,909,546, while Beijing Oriental Wisdom Culture Development Co., Ltd. contributed $2,359,173, resulting in combined pro forma revenues of $6,268,719[105]. - The total operating expenses for the combined entities amounted to $5,339,194, with China Liberal Education Holdings Limited's operating expenses at $3,931,088 and Beijing Oriental Wisdom Culture Development Co., Ltd. at $1,408,106[105].

Management and Governance - Ms. Ngai Ngai Lam has been the CEO since July 2020, leading the growth of China Liberal Beijing from a focus on Sino-foreign academic programs to comprehensive educational services [237]. - The board of directors consists of five members, including three independent directors, complying with Nasdaq's requirement for a majority of independent directors [248]. - Ms. Ngo Yin Tsang has served as an independent director since May 2020, bringing over 20 years of experience in auditing and financial management [240]. - Mr. Wenhuai Zhuang has been the CFO since April 2019, with prior experience in management consulting and project management [237]. - The company has established an audit committee, a compensation committee, and a nominating and corporate governance committee to oversee its operations [249]. Compensation and Incentives - The company paid an aggregate of $30,505 in cash to its executive officer and $101,209 to non-executive and independent directors for the fiscal year ended December 31, 2021 [243]. - A total of 30,000 Ordinary Shares were granted to an executive officer and 57,000 Ordinary Shares to certain non-executive and independent directors, with corresponding share-based compensation expenses of $44,700 and $115,830 respectively [243]. - The 2021 Share Incentive Plan allows for the issuance of up to 1,500,000 Ordinary Shares, with awards including options, share appreciation rights, and restricted share units [246]. - The 2021 Share Incentive Plan has a term of ten years, with the board having the authority to amend or terminate the plan [247]. - The company incurred share-based compensation expenses of $2,288,251 during the reporting period, reflecting its investment in employee incentives [336]. Financial Performance - Total revenue for 2021 was $3,909,546, a decrease of 22.2% from $5,023,099 in 2020 [333]. - Gross profit for 2021 was $2,760,398, compared to $2,866,066 in 2020, reflecting a decline of 3.7% [333]. - Net loss for 2021 was $1,249,881, compared to a net income of $1,208,696 in 2020, indicating a significant turnaround [333]. - Operating expenses for 2021 totaled $3,931,088, significantly higher than $1,429,346 in 2020, indicating an increase of 175.5% [333]. - The company reported a basic and diluted loss per share of $0.12 for 2021, compared to earnings of $0.21 in 2020 [333]. Assets and Liabilities - Total current assets increased to $43,550,730 in 2021 from $12,325,454 in 2020, representing a growth of 253.5% [330]. - Total liabilities rose to $1,675,343 in 2021, up from $1,132,985 in 2020, marking an increase of 48.0% [331]. - Total shareholders' equity reached $41,958,388 in 2021, a substantial increase from $11,640,929 in 2020, reflecting a growth of 260.5% [332]. - Cash and cash equivalents surged to $32,678,421 in 2021, compared to $5,007,449 in 2020, an increase of 552.5% [330]. Taxation and Regulatory Environment - The company is incorporated in the Cayman Islands and relies on dividends from its PRC subsidiaries for cash requirements, including shareholder dividends [262]. - The corporate income taxes for fiscal years 2021, 2020, and 2019 were reported at approximately $300,034, $303,246, and $156,038 respectively, due to HNTE status [1]. - The effective tax rate for the year ended December 31, 2021, was 31.6%, influenced by the preferential tax rate for HNTEs and non-PRC entities [409]. - The company is classified as an exempted company under the Companies Act, which provides certain regulatory advantages [272]. - The company has not incurred significant penalties or interest related to income taxes during the fiscal years ended December 31, 2021, 2020, and 2019 [379]. Market and Operational Insights - The company is primarily engaged in providing Sino-foreign Jointly Managed Academic Programs and technological consulting services to improve data management systems for Chinese universities [339]. - The company experienced seasonal fluctuations in operations, with the largest student enrollments occurring in the third and fourth fiscal quarters [304]. - For the year ended December 31, 2021, the revenue from Sino-foreign Jointly Managed Academic Programs was not significantly impacted, with a 201.4% increase in students enrolled in tailored job readiness training services compared to 2020 [348]. - The number of students enrolled in Sino-foreign Jointly Managed Academic Programs decreased by 9.8% during the 2021 academic year, but no significant dropout was reported [348]. - The company has not recorded any allowance for uncollectible accounts as it considers all accounts receivable fully collectible as of December 31, 2021 [353]. Shareholder Information - Ngai Ngai Lam beneficially owns approximately 25.61% of the company's Ordinary Shares, representing 4,057,942 shares [256]. - The company does not have any present plan to pay cash dividends on its Ordinary Shares in the foreseeable future, intending to retain available funds for business expansion [261]. - The company completed the acquisition of an 8.8228% non-controlling interest in China Liberal Beijing for a total price of RMB 2.95 million (approximately $453,669) [257]. - The CEO purchased 2,000,000 ordinary shares at a price of $1.50 per share, totaling $3,000,000, reflecting confidence in the company's future [351]. - A private placement transaction is set to raise $9 million through the issuance of 6,000,000 ordinary shares, aimed at bolstering capital for growth initiatives [429].