Golden Sun Education (GSUN) - 2023 Q2 - Quarterly Report

Revenue Performance - For the six months ended March 31, 2023, total revenue was $3,526,598, a decrease of 51.0% compared to $7,205,568 for the same period in 2022[56] - Tutorial service revenue for the six months ended March 31, 2023, was $3,017,545, down 52.8% from $6,383,764 in the prior year[56] - Logistic and consulting services revenue was $509,053 for the six months ended March 31, 2023, compared to $821,804 for the same period in 2022, representing a decline of 38.0%[56] - For the six months ended March 31, 2023, services transferred over time accounted for $3,317,594 of total revenue, while goods transferred at a point in time contributed $209,004[56] - Revenue decreased by $3,678,970 in the six months ended March 31, 2023, compared to the same period in the fiscal year 2022[88] - For the six months ended March 31, 2023, the Company's revenue decreased by $3,678,970 to $3,526,598 from $7,205,568 for the same period in 2022, primarily due to a decline in tutorial services revenue[102] Financial Position - As of March 31, 2023, the balance of deferred revenue amounted to $3,273,580, down from $4,435,393 as of September 30, 2022, indicating a decrease of approximately 26%[60] - The Company held cash of $3,826,031 at major financial institutions in mainland PRC as of March 31, 2023, compared to $2,155,389 as of September 30, 2022, reflecting an increase of about 77%[93] - As of March 31, 2023, the Company had cash on hand of $12,713,338 and working capital of $4,225,642, with deferred revenue of $3,273,580 mainly from deferred tuition payments[103] - The Company has long-term loans amounting to $3,407,304 as of March 31, 2023, and expects to obtain new or renew existing bank loans based on its credit history[103] - The Company has short-term bank loans totaling $218,417 as of March 31, 2023, which were obtained from the Agricultural Bank of China, with a fixed interest rate of 3.9% per annum[129] - Long-term bank loans increased to $3,407,304 as of March 31, 2023, compared to $3,028,046 as of September 30, 2022, reflecting an increase of approximately 12.5%[133] Expenses and Losses - The Company incurred a net loss of $2,118,349 for the year ended September 30, 2022, which was a significant decline compared to the previous year[88] - The Company incurred a net loss of $3,662,596 and net cash used in operating activities of $3,370,049 for the six months ended March 31, 2023, resulting in an accumulated deficit of $12,791,956[102] - Advertising expenditures decreased to $149,379 for the six months ended March 31, 2023, down from $257,396 in the same period of 2022, representing a reduction of approximately 42%[64] - The total provision for income taxes for the six months ended March 31, 2023, was $180,842, a decrease of approximately 62.4% from $480,552 for the same period in 2022[151] Tax and Regulatory Matters - Unrecognized tax benefits amounted to $2,848,749 as of March 31, 2023, up from $2,573,830 as of September 30, 2022, indicating an increase of approximately 11%[71] - Total taxes payable increased to $4,240,261 as of March 31, 2023, compared to $3,845,303 as of September 30, 2022, representing an increase of approximately 10.3%[158] Investments and Acquisitions - On January 18, 2023, the Company agreed to acquire 18% equity interest in Zhejiang Kangyuan Medical Technology Co., Ltd. for a total consideration of $4,717,805 (RMB32,400,000)[115] - The Company signed a Share Purchase Agreement on April 10, 2023, to acquire 100% equity interest in Kaiye for a total consideration of $5,000,000, with $3,601,000 already paid[182] - On May 10, 2023, the Company agreed to acquire 19% equity interest in Shanghai Daizong Business Consulting Co., Ltd for $834,353 (RMB5,730,000)[183] Reserves and Obligations - The general reserve increased to $156,245 as of March 31, 2023, up from $120,196 as of September 30, 2022, representing a growth of 30%[175] - The development reserve rose to $919,140 as of March 31, 2023, compared to $844,167 as of September 30, 2022, indicating an increase of approximately 8.9%[176] - The total capital injection obligation for five subsidiaries was $10,836,974 as of March 31, 2023, compared to $9,840,444 as of September 30, 2022, marking an increase of about 10.1%[181] Shareholder Information - As of March 31, 2023, the total number of ordinary shares outstanding was 19,085,491, an increase from 18,355,491 as of September 30, 2022, reflecting a growth of approximately 4%[174] - The aggregate amount of paid-in capital and statutory reserves not available for distribution was $1,075,385 as of March 31, 2023, compared to $964,363 as of September 30, 2022, indicating an increase of about 11.5%[177] Future Plans - The Company is evaluating different strategies for obtaining additional funding, which may include new investments or borrowings[103] - The Company plans to change its name to "Golden Sun Health Technology Group Limited," with the resolution adopted on September 26, 2023[184]