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].
China Liberal(CLEU) - 2022 Q2 - Quarterly Report