Financial Position - As of December 31, 2020, the company had U.S. dollar-denominated cash and cash equivalents of $3,401,817, with a potential 10% depreciation of the U.S. dollar against the Renminbi resulting in a decrease of RMB2,219,686 in cash and cash equivalents [545]. - The company received net proceeds of approximately $4.8 million from its initial public offering, with total expenses incurred around $3.2 million [552]. - In a follow-on offering, the company received net proceeds of approximately $29.2 million after deducting estimated offering expenses, with total expenses incurred around $825,020 [554]. Inflation and Economic Impact - The year-over-year percent changes in the consumer price index for China were increases of 1.9%, 4.5%, and 2.5% for the years 2018, 2019, and 2020 respectively, indicating inflation has not materially impacted operations [547]. Internal Control and Compliance - The company has identified a material weakness in internal control over financial reporting, including a lack of qualified accounting personnel and insufficient documented financial closing policies [561]. - The company plans to strengthen internal control by hiring qualified accounting personnel and implementing regular training programs for financial reporting [562]. - The company qualifies as an "emerging growth company" under the JOBS Act, allowing it to take advantage of reduced reporting requirements [562]. Market and Operational Risks - The company has not been exposed to material risks due to changes in market interest rates as it currently has no borrowings [546]. - The company has not used any derivative financial instruments to hedge foreign exchange risk, as most revenues and expenses are denominated in RMB [543]. - Seasonal fluctuations in operations are expected, with the largest student enrollments occurring in the third and fourth fiscal quarters [548].
China Liberal(CLEU) - 2020 Q4 - Annual Report