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].
China Liberal(CLEU) - 2022 Q3 - Quarterly Report