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EpicQuest Education Group International Ltd

EpicQuest Education Group International LtdEEIQEarnings & Financial Report

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What changed in EpicQuest Education Group International Ltd's 20-F — 2022 vs 2023

Top changes in EpicQuest Education Group International Ltd's 2023 20-F

283 paragraphs added · 207 removed · 170 edited across 4 sections

Item 4. Mine Safety Disclosures

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In addition, we provide the following services: ● Language Test Training Counseling – we provide International English Proficiency Test (ITEP) counseling, registration, test placement and test scores for students with no or poor language skills ● Admission application – our professional personnel reviews and provides feedback on student application materials ● Visa Counseling - our personnel provide visa counseling and guidance services for the student applicants ● Pre-departure guidance – we offer logistical and organizational support for the student applicants prior to their departure to the educational institutions 21 ● Accommodation arrangements – we pick-up and drop-off the students at the point of arrival.
In addition, we provide the following services: ● Language Test Training Counseling – we provide International English Proficiency Test (ITEP) counseling, registration, test placement and test scores for students with no or poor language skills; ● Admission application – our professional personnel reviews and provides feedback on student application materials; ● Visa Counseling – our personnel provide visa counseling and guidance services for the student applicants; ● Pre-departure guidance – we offer logistical and organizational support for the student applicants prior to their departure to the educational institutions; and ● Accommodation arrangements – we pick-up and drop-off the students at the point of arrival.
The services after arrival include, among others: ● Pick-up service with no charge – upon arrival, our U.S. office opens and maintains a 24-hour hotline to coordinate with Miami University for pick-up and ensures that each student arrives at and settles in dormitories safely ● Welcome service with no charge – we coordinate with Miami University whose staff members offer a two-week orientation ● Dormitory services - our dormitory administrators are on duty 24 hours per day and 7 days per week (these facilities are not owned, maintained, operated or are part of Miami University). ● Catering services – we maintain a Chinese restaurant consisting of Chinese chefs and culinary staff near student dormitories to offer several meals a day to our students ● Academic guidance – with the help of professionally retained tutors, we offer academic guidance to help students choose and plan their career development ● Internship services – we arrange for various types of internships and social practice activities throughout the academic calendar to help students with their future employment, educational and social prospects; we believe these services also help to develop their problem solving skills, workplace and emotional intelligence training ● Shuttle bus services – our staff offer shuttle bus services to cater to students’ needs.
The services after arrival include, among others: ● Pick-up service – upon arrival, our U.S. office opens and maintains a 24-hour hotline to coordinate with Miami University for pick-up and ensures that each student arrives at and settles in dormitories safely; ● Welcome service – we coordinate with Miami University whose staff members offer a two-week orientation; ● Dormitory services – our dormitory administrators are on duty 24 hours per day and 7 days per week (these facilities are not owned, maintained, operated or are part of Miami University); ● Catering services – we maintain a Chinese restaurant consisting of Chinese chefs and culinary staff near student dormitories to offer several meals a day to our students; ● Academic guidance – with the help of professionally retained tutors, we offer academic guidance to help students choose and plan their career development; ● Internship services – we arrange for various types of internships and social practice activities throughout the academic calendar to help students with their future employment, educational and social prospects; we believe these services also help to develop their problem solving skills, workplace and emotional intelligence training; and ● Shuttle bus services – our staff offer shuttle bus services to cater to students’ needs.
Similarly, we believe that our commission rates and guidance services set us apart from foreign university recruiting offices. 27 Student Facilities ● Students who are currently taking in-person classes in the U.S. are residing in housing owned by the Company on Roosevelt Blvd. in Middletown, Ohio, as well as a rental property which was recently renovated in Hamilton, Ohio.
Similarly, we believe that our commission rates and guidance services set us apart from foreign university recruiting offices. Student Facilities ● Students who are currently taking in-person classes in the U.S. are residing in housing owned by the Company on Roosevelt Blvd. in Middletown, Ohio, as well as a rental property which was recently renovated in Hamilton, Ohio.
We have also been operating as a recruiting agent for admission to Coventry University for the 2021-2022 academic year. QHI develops specific education goals and plans for each student enrolled in our program, and provides a safe and structured environment and support services so that students can focus most of their attention on academic studies.
We have also been operating as a recruiting agent for admission to Coventry University for the 2021-2022 academic year. 22 QHI develops specific education goals and plans for each student enrolled in our program and provides a safe and structured environment and support services so that students can focus most of their attention on academic studies.
As a key element of our strategic growth plan, we will continue to target educational institutions that meet our acquisition criteria and that offer high potential synergies. We plan to prioritize domestic recruiting with an initial focus on Ohio and Michigan to substantially increase the student body at Davis College which we believe has ample room for growth.
As a key element of our strategic growth plan, we will continue to target educational institutions that meet our acquisition criteria and that offer high potential synergies. We plan to prioritize domestic recruiting with an initial focus on Ohio and Michigan to substantially increase the student body at Davis which we believe has ample room for growth.
We believe that Davis College offers immediate synergies with our existing operations as well as significant long-term growth opportunities in the U.S., the foundation of our global expansion strategy. As we engage in the administration of Davis College and its curriculum, we plan to develop new educational programs at Davis College to provide an optimal academic experience for our students.
We believe that Davis offers immediate synergies with our existing operations as well as significant long-term growth opportunities in the U.S., the foundation of our global expansion strategy. As we engage in the administration of Davis and its curriculum, we plan to develop new educational programs at Davis to provide an optimal academic experience for our students.
In response to China’s current policy designed to attract more students to study in China, QHI has planned to recruit students from the Belt and Road countries. 24 Our Competitive Strengths We believe that the following strengths differentiate us from our competitors and will continue contributing to our growth and success. ● Comprehensive Service After Study .
In response to China’s current policy designed to attract more students to study in China, QHI has planned to recruit students from the Belt and Road countries. Our Competitive Strengths We believe that the following strengths differentiate us from our competitors and will continue contributing to our growth and success. ● Comprehensive Service After Study .
We currently do not have cash management policies that dictate how funds are transferred between us, our subsidiaries or investors. Competition The competition for the North American educational market has intensified in recent years with more participants entering the market.
We currently do not have cash management policies that dictate how funds are transferred between us, our subsidiaries or investors. 28 Competition The competition for the North American educational market has intensified in recent years with more participants entering the market.
It represents a key strategic growth initiative that expands our business model to being an operator of a college that provides career-training programs as well as a ‘transfer pathway’ to top universities for students to pursue Bachelors’ degrees.
It represents a key strategic growth initiative that expands our business model to being an operator of a college that provides career-training programs as well as a ‘transfer pathway’ to universities for students to pursue Bachelors’ degrees.
It represents a key strategic growth initiative that expands our business model to being an operator of a college that provides career-training programs as well as a ‘transfer pathway’ to top universities for students to pursue Bachelors’ degrees.
It represents a key strategic growth initiative that expands our business model to being an operator of a college that provides career-training programs as well as a ‘transfer pathway’ to universities for students to pursue Bachelors’ degrees.
We believe that these elements provide us with competitive advantages in the marketplace. Sales and Marketing We recruit prospective students from various parts of China.
We believe that these elements provide us with competitive advantages in the marketplace. 26 Sales and Marketing We recruit prospective students from various parts of China.
Further, on the three-year anniversary of the agreements, if EduGlobal College has not achieved certain financial and student enrollment metrics, the Company has the right to sell its 80% equity position back to Global for C$1.0 million (US$0.8 million) plus the sum of its investments in the college, up to an additional C$3.0 million (US$2.4 million).
Further, on the three-year anniversary of the agreements, if EduGlobal College has not achieved certain financial and student enrollment metrics, the Company has the right to sell its 80% equity position back to EduGlobal Holdings for C$1.0 million (US$0.8 million) plus the sum of its investments in the college, up to an additional C$3.0 million (US$2.4 million).
As a wholly owned subsidiary of HHI, StudyUp Center LLC (SUPC) was set up on April 27, 2022 in Ohio to coordinate and administer university and college student support services, provide academic guidance and advice for international students, and assist them in selecting and applying to educational institutions and completing the application process.
As a wholly owned subsidiary of HHI, Study Up Center LLC (SUPC) was set up on April 27, 2022, in Ohio to coordinate and administer university and college student support services, provide academic guidance and advice for international students, and assist them in selecting and applying to educational institutions and completing the application process.
EduGlobal College, pursuant to which it acquired 80% of the issued and outstanding shares of EduGlobal College from Global. The initial purchase price for EduGlobal College was C$1.0 million (US$0.8 million), and the Company assumed up to C$200,000 (US$160,000) in certain liabilities of the college.
EduGlobal College (EduGlobal College), pursuant to which it acquired 80% of the issued and outstanding shares of EduGlobal College from EduGlobal Holdings. The initial purchase price for EduGlobal College was C$1.0 million (US$0.8 million), and the Company assumed up to C$200,000 (US$160,000) in certain liabilities of the college.
On November 24, 2021, the Company entered into: (i) a stock purchase agreement with Ameri-Can Education Group Corp. (“Ameri-Can”), and the holders (the “Sellers”) of shares of capital stock of Ameri-Can (the “Stock Purchase Agreement”), and (ii) a subscription agreement with Ameri-Can (the “Subscription Agreement”).
On November 24, 2021, the Company entered into: (i) a stock purchase agreement with Ameri-Can Education Group Corp. (Ameri-Can), and the holders (the “Sellers”) of shares of capital stock of Ameri-Can (the “Stock Purchase Agreement”), and (ii) a subscription agreement with Ameri-Can (the “Subscription Agreement”).
In recent months, Davis College has established non-binding Memorandums of Understanding with several global institutions.
In recent months, Davis has established non-binding Memorandums of Understanding with several global institutions.
We plan to recruit students from China and other Asian countries and deploy the academic model we established at the MU Regional Campuses where we provide English language support for our international students as well as dormitories and on-campus support.
We plan to recruit students from China and other Asian countries and deploy the academic model we established at the Miami University Regional Campuses where we provide English language support for our international students as well as dormitories and on-campus support.
We believe that Davis College offers immediate synergies with our existing operations as well as significant long-term growth opportunities in the US, the foundation of our global expansion strategy. Davis College has arrangements with 7 international universities to offer students a variety of pathways toward completing their Bachelor’s degrees.
We believe that Davis offers immediate synergies with our existing operations as well as significant long-term growth opportunities in the U.S., the foundation of our global expansion strategy. Davis has arrangements with 7 international universities to offer students a variety of pathways toward completing their Bachelor’s degrees.
We have developed and intend to implement the following strategies to expand and grow the size of our Company: Overseas markets ● Miami University (Regional Campuses) Project .
We have developed and intend to implement the following strategies to expand and grow the size of our Company: Projects ● Miami University (Regional Campuses) Project .
As of the date of this prospectus, EpicQuest has not declared any dividend and does not have a plan to declare a dividend to its shareholders.
As of the date of this annual report, EpicQuest has not declared any dividend and does not have a plan to declare a dividend to its shareholders.
We believe, however, that this is one of the Company’s strengths and intend to open training facilities nationwide to combine English language programs with university credit hours, as a cost saving measure for Chinese students who plan to study abroad. ● Additional Facilities .
We believe that the vast majority of English language programs are in need of improvement. We believe, however, that this is one of the Company’s strengths and intend to open training facilities nationwide to combine English language programs with university credit hours, as a cost saving measure for Chinese students who plan to study abroad. ● Additional Facilities .
Organizational Structure The following chart illustrates EpicQuest Education’s organizational structure as of September 30, 2022: 29 D. Property, plant and equipment Our principal executive office is located 1209 N. University Blvd, Middletown, OH 45042. We own this property.
Organizational Structure The following chart illustrates EpicQuest Education’s organizational structure as of January 25, 2024: 30 D. Property, plant and equipment Our principal executive office is located 1209 N. University Blvd, Middletown, OH 45042. We own this property.
Known as “public Ivy,” the university offers more than 120 undergraduate, 60 graduate and 13 Ph.D. degrees. Currently, our agreements with the University have extended to the Middletown and Hamilton campuses. After two years of online courses, a total of 89 students came to Ohio, U.S. for in-person classes at the Miami University Regional Campuses.
Known as a “public Ivy,” the university offers more than 120 undergraduate, 60 graduate and 13 Ph.D. degrees. Currently, our agreements with Miami University have extended to the Middletown and Hamilton campuses. After two years of online courses, our students returned to Ohio for in-person classes at the Miami University Regional Campuses starting in August 2022.
Davis College Project. As a key part of our strategic growth plan, we acquired a controlling stake in Ameri-Can, which, as of December 2022, owns Davis College, a two-year career-training college.
As a key part of our strategic growth plan, we acquired a controlling stake in Ameri-Can, which, as of December 2022, owned Davis College (now Davis University), a two-year career-training college.
We believe that the facilities that we currently own are adequate to meet our needs for the foreseeable future, and we believe that we will be able to obtain adequate facilities, principally through leasing of additional properties, to accommodate our future expansion plans. The Company also maintains administrative offices in Beijing.
We believe that the facilities that we currently own are adequate to meet our needs for the foreseeable future, and we believe that we will be able to obtain adequate facilities, principally through leasing of additional properties, to accommodate our future expansion plans.
We believe that the facilities that we currently own are adequate to meet our needs for the foreseeable future, and we believe that we will be able to obtain adequate facilities, principally through leasing of additional properties, to accommodate our future expansion plans. The Company also maintains administrative offices in Beijing.
We believe that the facilities that we currently own are adequate to meet our needs for the foreseeable future, and we believe that we will be able to obtain adequate facilities, principally through leasing of additional properties, to accommodate our future expansion plans.
EduGlobal previously signed an Academic Articulation Agreement (the “Agreement”) with Algoma University (“Algoma”). The Agreement establishes a seamless pathway for EduGlobal students who have successfully completed its International Undergraduate Pathways Program (iUPP) and the English for Academic Purposes (EAP) Program to complete baccalaureate degrees and graduate certificates at Algoma’s campuses in Brampton and Sault Ste. Marie.
The Agreement establishes a seamless pathway for EduGlobal students who have successfully completed its International Undergraduate Pathways Program (iUPP) and the English for Academic Purposes (EAP) Program to complete baccalaureate degrees and graduate certificates at Algoma’s campuses in Brampton and Sault Ste. Marie.
All of our revenue is remitted to us in U.S. dollars, and all the bank accounts owned by us are located in Ohio. There are no restrictions on our ability to transfer cash between us, our Ohio-based subsidiaries and our Canadian subsidiary, and investors.
The rest of our revenue is remitted to RIL in Canadian dollars, and the bank accounts owned by RIL are located in British Columbia, Canada. There are no restrictions on our ability to transfer cash between us, our Ohio-based subsidiaries and our Canadian subsidiary, and investors.
At the same time, QHI set up nearby dormitory areas and restaurants for ELC students (these facilities are not owned, maintained, operated or are part of Miami University). QHI is the only admission institution for students from China on the Miami University Middletown and Hamilton Campus.
At the same time, QHI set up nearby dormitory areas and restaurants for ELC students (these facilities are not owned, maintained, operated or are part of Miami University). QHI is the only admission institution for students from China on the Miami University Middletown and Hamilton Campus. Since 2013, QHI has accumulated a significant number of market resources and enrollment channels.
In addition, neither EpicQuest nor any subsidiary has made any dividends or distributions made to U.S. investors. As of the date of this prospectus, none of our subsidiaries has declared or paid any dividends or made any distributions to EpicQuest, nor does any of them have intention to do so.
As of the date of this annual report, none of our subsidiaries has declared or paid any dividends or made any distributions to EpicQuest, nor does any of them have intention to do so.
Public Company Accounting Oversight Board (the “PCAOB”) issued its report notifying the SEC of its determination that it is unable to inspect or investigate completely accounting firms headquartered in mainland China or Hong Kong.
Pursuant to the Holding Foreign Companies Accountable Act (the “HFCAA”), on December 16, 2021, the U.S. Public Company Accounting Oversight Board (the “PCAOB”) issued its report notifying the SEC of its determination that it is unable to inspect or investigate completely accounting firms headquartered in mainland China or Hong Kong.
Since 2013, QHI has accumulated a significant number of market resources and enrollment channels. 22 Our Strategies We strive to improve the quality of our project offerings, provide our customers with the most suitable options to pursue their studies abroad, and ultimately to establish an internationally recognized education brand.
Our Strategies We strive to improve the quality of our project offerings, provide our customers with the most suitable options to pursue their studies abroad, and ultimately to establish an internationally recognized education brand.
Of the remaining 30% of the equity Ameri-Can, 10% is held by one Seller and represents non-voting and non-dilutable equity. Each Seller receiving Purchaser Shares agreed that for a period of six months from the closing date, such Seller’s Purchaser Shares may not be offered, pledged, sold, or otherwise transferred or disposed of, directly or indirectly.
Each Seller receiving Purchaser Shares agreed that for a period of six months from the closing date, such Seller’s Purchaser Shares may not be offered, pledged, sold, or otherwise transferred or disposed of, directly or indirectly.
We intend to develop a virtual library of new media training resources segmented by various topics to simplify training and consulting time and improve efficiency. We also intend to implement training programs such as seminars on writing business English email, commercial business communications, PPT production, presentation skills and sales consulting skills to increase the sales capacity of all personnel.
We also intend to implement training programs such as seminars on writing business English email, commercial business communications, PPT production, presentation skills and sales consulting skills to increase the sales capacity of all personnel.
After substantial analysis of attendance and participation rates, it became apparent that the scale of one-year preparatory course in the market has been too small which made it difficult to recruit students. In fact, it appears that one-year preparatory courses available in the market have not delivered on cost saving promises; on the contrary, it prolonged the study abroad periods.
After substantial analysis of attendance and participation rates, it became apparent that the scale of one-year preparatory course in the market has been too small which made it difficult to recruit students.
Quest International Education Center LLC (QIE) was set up on January 13, 2017 in Ohio, and is a wholly-owned subsidiary of QHI. Highrim Holding International Limited (HHI) was set up in July of 2021 in Canada, and it is also a wholly-owned subsidiary of EpicQuest.
Quest International Education Center LLC (QIE) was set up on January 13, 2017 in Ohio, and is a wholly-owned subsidiary of QHI. Gilmore INV LLC (Gilmore) was formed in 2023 and is a wholly-owned subsidiary of EpicQuest.
On January 15, 2022, HHI entered into agreements with Canada EduGlobal Holdings Inc. (“EduGlobal”) and Richmond Institute of Languages Inc. d.b.a. EduGlobal College, pursuant to which it acquired 80% of the issued and outstanding shares of EduGlobal College from Global in order to achieve geographical diversification. ● UK University Collaborative Project.
(EduGlobal Holdings) and Richmond Institute of Languages Inc. d.b.a. EduGlobal College (EduGlobal College), pursuant to which it acquired 80% of the issued and outstanding shares of EduGlobal College from EduGlobal Holdings in order to achieve geographical diversification.
EduGlobal College, pursuant to which it acquired 80% of the issued and outstanding shares of EduGlobal College from Global. This acquisition provided us with an opportunity to further develop EduGlobal’s innovative educational programs of English proficiency training and academic programming that was student-centric and were among the highest in academic quality.
This acquisition provided us with an opportunity to further develop EduGlobal’s innovative educational programs of English proficiency training and academic programming that was student-centric and were among the highest in academic quality. EduGlobal previously signed an Academic Articulation Agreement (the “Agreement”) with Algoma University (“Algoma”).
These programs introduce new students to our services; we also administer admissions support, online courses, English placement test, application and visa support, seminars with lecturers, track records of previous enrollees and parent visiting groups on top of the standard demonstration classes to grow the number of recruits. 25 Presently, there are two teams of marketing department members who are responsible for different regions across China, with one person to specifically focus on building partnerships with Chinese vocational colleges.
These programs introduce new students to our services; we also administer admissions support, online courses, English placement test, application and visa support, seminars with lecturers, track records of previous enrollees and parent visiting groups on top of the standard demonstration classes to grow the number of recruits.
The Agreement is an important element of the Company’s strategic plan; EpicQuest is intent upon exploring additional opportunities to expand into the Canadian education market. We entered into an agreement with The Education Group (London) Ltd whereby we agreed to recruit students from China for admission to the University of the West of Scotland.
We entered into an agreement with The Education Group (London) Ltd whereby we agreed to recruit students from China for admission to the University of the West of Scotland.
Geographic Scope of Our Operations During the fiscal year ending September 30, 2022, 100% of our customers were Chinese residents. However, the Company is expanding to other international markets through Davis College and EduGlobal College, and believes that in the next fiscal year, students from countries other than China will join our programs.
Furthermore, the Company is expanding to other international markets through Davis University and EduGlobal College, and believes that in the next fiscal year, more students from countries other than China will join our programs.
Notwithstanding the foregoing, we, our subsidiaries, and investors in our securities would be materially harmed if (i) we do not receive or maintain such permissions or approvals, (ii) we inadvertently conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and we are required to obtain such permissions or approvals in the future.
Notwithstanding the foregoing, we, our subsidiaries, and investors in our securities would be materially harmed if (i) we do not receive or maintain such permissions or approvals, (ii) we inadvertently conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and we are required to obtain such permissions or approvals in the future. 27 Most of our revenue is remitted to us in U.S. dollars, and all the bank accounts owned by us, other than those owned by Richmond Institute of Languages (RIL) located in British Columbia, Canada, are located in Ohio.
Our track record shows that virtually all students, irrespective of their background or grades, can progress academically.
To our knowledge, no other education group offers similar services. ● High Success Rate . Our track record shows that virtually all students, irrespective of their background or grades, can progress academically.
Ameri-Can’s primary asset is convertible debt with Davis College, Inc., which operates Davis College in Toledo, Ohio, pursuant to which Ameri-Can had the right to convert its convertible debt security into 100% of the shares of Davis College, Inc.
A share-repurchase agreement was signed on November 24, 2022, so the shares were bought back by EpicQuest at a price of $6.20. 19 Ameri-Can’s primary asset is convertible debt with Davis College, Inc., which operates Davis College (“Davis”) in Toledo, Ohio, pursuant to which Ameri-Can had the right to convert its convertible debt security into 100% of the shares of Davis College, Inc.
We believe the benefit of such relationships is in (i) students’ familiarity and comfort with our programs, and (ii) expansion of our brand and influence in the target demographic. ● Continuous Expansion of the Chinese International Student Service Center. Since 2015, QHI has established cooperative relationships with many Chinese International Student Service Centers.
Presently, we maintain business relationships with more than ten high schools in China and seek to expand that base. We believe the benefit of such relationships is in (i) students’ familiarity and comfort with our programs, and (ii) expansion of our brand and influence in the target demographic. ● Continuous Expansion of the Chinese International Student Service Center.
QHI signed a training agreement with universities in China starting at the end of 2018, and arranged all the 30-credit courses for freshmen of Miami University to be completed in China.
In fact, it appears that one-year preparatory courses available in the market have not delivered on cost saving promises; on the contrary, it prolonged the study abroad periods. 23 QHI signed a training agreement with universities in China starting at the end of 2018, and arranged all the 30-credit courses for freshmen of Miami University to be completed in China.
Currently, three universities have listed our program as their main study abroad recommendation. ● QHI University Cooperation Project . In order to provide higher quality study abroad programs, QHI has established cooperation projects with universities to allow Chinese students to obtain 1-2 years’ worth of college credits at North American colleges and universities.
In order to provide higher quality study abroad programs, QHI has established cooperation projects with universities to allow Chinese students to obtain 1-2 years’ worth of college credits at North American colleges and universities. Presently, we maintain relationships with multiple such institutions and are looking to further expand. ● Domestic Preparatory Training .
UWS offers a range of career-focused undergraduate, postgraduate and research degree opportunities across its four academic schools that serve approximately 17,000 students from more than 70 countries. UWS is recognized as a top 600 university worldwide by Times Higher Education (2020 World University Rankings).
UWS has four campuses across the west and southwest of Scotland and one campus in Central London. UWS offers a range of career-focused undergraduate, postgraduate and research degree opportunities across its four academic schools that serve approximately 17,000 students from more than 70 countries.
However, the good news is that a total of 89 students, including those admitted in 2022 and those from the previous year, came to Ohio physically to take in-person classes at the Miami University Regionals, and given that China has announced to relax travel restrictions, we believe the number of students admitted to our program at the Miami University Regionals may increase back to levels similar to previous years.
Given that China has taken steps to relax travel restrictions, we believe the number of students admitted to our program at the Miami University Regionals may increase back to levels similar to previous years. Davis University Project.
CU has two principal campuses, one in the center of Coventry, England, where the majority of its operations are located, and one in Central London which focuses on business and management. CU also governs other higher education institutions, CU Coventry, CU Scarborough and CU London. CU has more than 29,000 undergraduate and 6,000 postgraduate students.
UWS is recognized as a top 600 university worldwide by Times Higher Education (2020 World University Rankings). CU has two principal campuses, one in the center of Coventry, England, where the majority of its operations are located, and one in Central London which focuses on business and management.
Starting in 2021, we also began working with two premier UK universities (University of the West of Scotland (UWS) and Coventry University (CU)). UWS has four campuses across the west and southwest of Scotland and one campus in Central London.
The agreements provide for ongoing collaborations between EduGlobal College and the two institutions of higher learning. ● UK University Collaborative Project. Starting in 2021, we also began working with two premier UK universities (University of the West of Scotland (UWS) and Coventry University (CU)).
This was the first time this program welcomed international students from China since March 2020. As a key part of our strategic growth plan, we acquired a controlling stake in Ameri-Can Education Group Corp. (“Ameri-Can”), which, as of December 2022, owns Davis College, a two-year career-training college.
The Miami Agreement was effective as of July 1, 2023, and will terminate in accordance with its terms on June 30, 2028. As a key part of our strategic growth plan, we acquired a controlling stake in Ameri-Can Education Group Corp. (Ameri-Can), which, as of December 2022, owns Davis College (now Davis University), a two-year career-training college.
Our sales personnel mainly relies on on-site visits and training models to develop and maintain our customer base. We also believe that strengthening of online training programs in combination of streamlining the network of training models can effectively reduce the cost of travel.
We also believe that strengthening of online training programs in combination of streamlining the network of training models can effectively reduce the cost of travel. We intend to develop a virtual library of new media training resources segmented by various topics to simplify training and consulting time and improve efficiency.
Effective on December 1, 2022, the change of control was completed and the convertible debt was converted to 100% ownership of Davis College Inc. held by Ameri-Can. 19 On January 15, 2022, EpicQuest’s wholly-owned subsidiary, HHI, entered into agreements with Canada EduGlobal Holdings Inc. (“EduGlobal”) and Richmond Institute of Languages Inc. d.b.a.
Effective on December 1, 2022, the change of control was completed and the convertible debt was converted to 100% ownership of Davis College Inc. held by Ameri-Can. In November of 2023, the conversion of Davis College to Davis University was approved by regulatory authorities.
The acquisition is consistent with the recent announcement by the Chinese government to emphasize practical, career-training education which includes promoting participation of publicly-listed and industry-leading companies. 23 ● Canada Project. QHI has begun its exploration of the Canadian markets with the intent to replicate the Miami University (Regional model).
The acquisition is consistent with the recent announcement by the Chinese government to emphasize practical, career-training education which includes promoting participation of publicly listed and industry-leading companies. 24 In June of 2023, Davis College was approved by the Higher Learning Commission (HLC) to offer a four-year Bachelor of Science in Business degree.
StudyUp Center LLC (SUC) was set up in April 2022 in Ohio, and it is a wholly-owned subsidiary of HHI. We are not a Chinese operating company but a British Virgin Islands holding company with operations conducted by our subsidiaries.
We are not a Chinese operating company but a British Virgin Islands holding company with operations conducted by our subsidiaries. We do not utilize any variable interest entities.
As of September 30, 2022, a total of 80 students who had been admitted to the English Language Program at the MU Regional Campuses paid full tuition fees as compared to 136 students for the same period in the previous year. This reflected the significant impacts of in the recent extremely challenging years.
As of September 30, 2023, a total of 60 students who had been admitted to the English Language Program at the Miami University Regional Campuses and paid full tuition fees However, as of January 25, 2024, a total of 16 students have confirmed to join the English Language Program at the Miami University Regional Campuses.
Our capital expenditure amounted to approximately $51,410 and $618,529 for the years ended September 30, 2022 and 2021, respectively. The capital expenditures were primarily used for purchases of property and equipment. We are subject to the periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers.
SouthGilmore is 40% owned by Gilmore, with EpicQuest Education maintaining control of its Board of Directors and heading its management team. Our capital expenditure amounted to approximately $14,231 and $51,410 for the years ended September 30, 2023 and 2022, respectively. The capital expenditures were primarily used for purchases of property and equipment.
As of December 31, 2022, the Company had 58 employees, of which 11 were located in the U.S., 14 were located in Canada, and the remaining employees were located in China.
As of September 30, 2023, the Company had 38 full-time and 22 part-time employees, of which 49 were located in the U.S., 10 were located in Canada, and 1 was located in Sri Lanka.
Among these institutions are the International College of Business and Technology (ICBT Campus) of Sri Lanka, Isabela State University of the Philippines, PSB Academy of Singapore, and Anhui Business College of China. 20 On January 15, 2022, EpicQuest’s wholly-owned subsidiary, HHI, entered into agreements with Canada EduGlobal Holdings Inc. (“EduGlobal”) and Richmond Institute of Languages Inc. d.b.a.
Among these institutions are the International College of Business and Technology (ICBT Campus) of Sri Lanka, Isabela State University of the Philippines, PSB Academy of Singapore, and Anhui Business College of China. 21 In June of 2023, Davis College was approved by the Higher Learning Commission (HLC) to offer a four-year Bachelor of Science in Business degree.
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Ameri-Can Education Group Corp., an Ohio corporation, is 70% owned by EpicQuest, which ownership was acquired in December 2021.
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As a wholly owned subsidiary of HHI, Skyward Holding International Limited (Skyward) was set up in June of 2023 in Canada. Skyward serves as the holding company of our Sri Lanka recruiting office, which opened on September of 2023, and focuses on recruiting students in Southeast Asia and the Middle East regions.
Removed
A share-repurchase agreement was signed on November 24, 2022 so that such shares would be bought back by EpicQuest at a price of $6.20.
Added
Of the remaining 30% of the equity Ameri-Can not held by the Company, 10% is held by one Seller and represents non-voting and non-dilutable equity.
Removed
Investors in our securities will be purchasing securities in EpicQuest Education Group International Limited, a British Virgin Islands, and not in any of our subsidiaries. We do not utilize any variable interest entities.
Added
This new designation reflects the breadth of Davis University’s academic programs including current and planned four-year degree programs which offer students a wide range of avenues to pursue different levels of education. On January 15, 2022, EpicQuest’s wholly-owned subsidiary, HHI, entered into agreements with Canada EduGlobal Holdings Inc. (“EduGlobal Holdings”) and Richmond Institute of Languages Inc. d.b.a.
Removed
In the meantime, we are also looking into the potential of establishing an operating hub in Sri Lanka to facilitate our expansion into the Southeast Asia market to leverage our educational programming and unique culture of learning to include Viet Nam, Thailand, Malaysia and India.
Added
On March 31, 2023, pursuant to a purchase agreement by and between HHI, EduGlobal Holdings , EduGlobal College and Sylvester Chen, dated that same date, HHI acquired the remaining 20% of the issued and outstanding shares of EduGlobal College from EduGlobal Holdings for a purchase price of C$250,000 (US$187,505).
Removed
China markets ● Partnering with High Schools . Presently, we maintain business relationships with more than ten high schools in China, and seek to expand that base.
Added
As a result of acquiring the remaining 20% of the issued and outstanding shares of EduGlobal College, EduGlobal College is now 100% owned by HHI.
Removed
Presently, we maintain relationships with multiple such institutions and are looking to further expand. ● Domestic Preparatory Training . We believe that the vast majority of English language programs are in need of improvement.
Added
In 2023, EpicQuest established a wholly owned subsidiary, Gilmore INV LLC (Gilmore), in Ohio, for the purposes of kinesiology and recreation education programs to be offered by both of EpicQuest’s owned and operated institutions, Davis University and EduGlobal College. Another entity SouthGilmore LLC (SouthGilmore) was also formed in 2023 to organize sports-related entertainment projects.
Removed
To our knowledge, no other education group offers similar services. ● High Success Rate . The average number of students enrolled in our program is 120-130 per year, and the number of students who are transferred or expelled is less than 5 per year.
Added
On January 8, 2024, the Company consummated pursuant to a Securities Purchase Agreement (the “January Purchase Agreement”) an offering with certain accredited investors for the sale by the Company of (i) 400,000 ordinary shares of the Company, par value $0.0016 per share (“ordinary shares”) and (ii) warrants to purchase up to an aggregate of 400,000 ordinary shares (the “January Warrants”), in a private placement offering.
Removed
QHI, which is our only subsidiary that conducts any business in China, pays its employees and its operational expenses through payments to its business partner in China, Renda Financial Education Technology Co., Ltd. 26 Pursuant to the Holding Foreign Companies Accountable Act (the “HFCAA”), on December 16, 2021, the U.S.
Added
The combined purchase price of one ordinary share and accompanying January Warrant was $2.00. Subject to certain ownership limitations, the January Warrants are exercisable upon issuance.
Removed
QHI, which is our only subsidiary that conducts any business in China pays its employees and its operational expenses through payments to its business partner in China, Renda Financial Education Technology Co., Ltd.
Added
Each January Warrant is exercisable into one ordinary share at a price per share of $2.00 (as adjusted from time to time in accordance with the terms thereof) and will expire on the fifth anniversary of the date of issuance.
Removed
During the fiscal year ending September 30, 2022, cash transfers have been made to date between EpicQuest and our subsidiaries as follows: (i) intercompany loans from QHI to QIE of $4.1 million; (ii) intercompany loans from QHI to Ameri-Can of $2.5 million; and (iii) intercompany loans from QHI to HHI of $3.0 million.
Added
The gross proceeds to the Company from the private placement was $0.8 million, before deducting offering expenses, and excluding the proceeds, if any, from the exercise of the January Warrants. The Company intends to use the net proceeds from this offering for general corporate purposes.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

48 edited+29 added−8 removed11 unchanged
For the year ended September 30, 2021, we had net loss of US$1.1 million which led to a US$5.1 million increase in net cash outflow in operating activities. 2) Change in prepaid expenses was US$0.6 million cash inflow for the year ended September 30, 2022.
For the year ended September 30, 2021, we had net loss of US$1.1 million which led to a US$5.0 million increase in net cash outflow in operating activities. 2) Change in prepaid expenses was US$0.6 million cash inflow for the year ended September 30, 2022.
For the year ended September 30, 2021, the change was a net cash outflow of US$0.3 million, which led to a US$0.3 million increase in net cash outflow in operating activities. 8) Change in non-cash items, including depreciation, non-cash lease expenses, gain/loss from disposal of fixed assets, deferred income taxes and stock-based compensation expenses, provided a total of US$4.1 million net cash inflow for the year ended September 30, 2022.
For the year ended September 30, 2021, the change was a net cash outflow of US$0.3 million, which led to a US$0.3 million increase in net cash outflow in operating activities. 8) Change in non-cash items, including depreciation, non-cash lease expenses, gain/loss from disposal of fixed assets, deferred income taxes and stock-based compensation expenses, provided a total of US$4.0 million net cash inflow for the year ended September 30, 2022.
The Ohio CAT is a business tax levied based on the gross receipts from sales. The federal income tax is based on a flat rate of 21%. 33 Canada Under the current Canadian income tax, the Company’s Canadian subsidiaries, HHI and RIL, are subject to a combined provincial and federal corporate income tax rate of 27%.
The Ohio CAT is a business tax levied based on the gross receipts from sales. The federal income tax is based on a flat rate of 21%. Canada Under the current Canadian income tax, the Company’s Canadian subsidiaries, HHI and RIL, are subject to a combined provincial and federal corporate income tax rate of 27%.
For the year ended September 30, 2021, change in deferred revenue generated net cash inflow of US$1.0 million, which led to a US$2.2 million decrease in net cash inflow from operating activities. 6) Change in income tax receivable in total generated US$0.01 million net cash inflow for the year ended September 30, 2022.
For the year ended September 30, 2021, change in deferred revenue generated net cash inflow of US$1.0 million, which led to a US$2.2 million decrease in net cash inflow from operating activities. 6) Change in income tax receivable in total used US$0.01 million net cash inflow for the year ended September 30, 2022.
Additionally, upon payments of dividends to the shareholders, no BVI withholding tax will be imposed. US Under the current Ohio state and US federal income tax, the Company’s Ohio subsidiaries, QHI, QIE, SUPC and AMC are subject to the Ohio state’s Commercial Activity Tax (“CAT”) and federal income tax.
Additionally, upon payments of dividends to the shareholders, no BVI withholding tax will be imposed. 34 US Under the current Ohio state and US federal income tax, the Company’s Ohio subsidiaries, QHI, QIE, SUPC and AMC are subject to the Ohio state’s Commercial Activity Tax (“CAT”) and federal income tax.
The increase in net cash outflow in operating activities was primarily due to the following: 1) We had net loss of US$6.2 million for the year ended September 30, 2022.
The increase in net cash outflow in operating activities was primarily due to the following: 1) We had net loss of US$6.1 million for the year ended September 30, 2022.
Our general administrative expenses increased by $7.4 million in 2022 compared to 2021, mainly due to the two new expense items, management service fees and stock-based compensation expenses with total amount of US$7.0 million incurred in fiscal 2022.
Our general administrative expenses increased by $7.3 million in 2022 compared to 2021, mainly due to the two new expense items, management service fees and stock-based compensation expenses with total amount of US$7.0 million incurred in fiscal 2022.
For the year ended September 30, 2021, the change was a net cash outflow of US$0.5 million, which led to a US$0.5 million decrease in net cash outflow from operating activities. 7) Change in student deposits used US$0.6 million net cash outflow for the year ended September 30, 2022.
For the year ended September 30, 2021, the change was a net cash outflow of US$0.5 million, which led to a US$0.5 million increase in net cash outflow from operating activities. 7) Change in student deposits used US$0.6 million net cash outflow for the year ended September 30, 2022.
As of September 30, 2022, 2021 and 2020, we had US$11.4 million, US$16.5 million, and US$7.4 million, respectively, in cash, which primarily consist of cash deposited in banks. The Company’s working capital requirements mainly comprise cost of English learning program fees, student recruitment fees, office expenses, professional fees, rental expenses, and salary expenses.
As of September 30, 2023, 2022 and 2021, we had US$5.0 million, US$11.4 million, and US$16.5 million, respectively, in cash, which primarily consist of cash deposited in banks. The Company’s working capital requirements mainly comprise cost of English learning program fees, student recruitment fees, office expenses, professional fees, rental expenses, and salary expenses.
For the year ended September 30, 2021, the Company had net cash provided by financing activities of US$9.3 million, which was solely attributable to net cash proceeds from the IPO completed in March 2021.
Financing Activities: September 30, 2023, 2022 and 2021 For the year ended September 30, 2021, the Company had net cash provided by financing activities of US$9.3 million, which was solely attributable to net cash proceeds from the IPO completed in March 2021.
Historically, we mainly derived our cash inflow from operating activities. For the year ended September 30, 2022, we also derived US$0.2 million (2021: US$9.3 million) from financing activities in relation to our IPO.
Historically, we mainly derived our cash inflow from operating activities. For the year ended September 30, 2021, we also derived US$9.3 million from financing activities in relation to our IPO.
Our costs of sales in 2022 increased by US$0.1 million or 4% compared to fiscal 2021, which is in line with the increase in our revenue in 2022. Our costs of sales in 2021 decreased by US$0.4 million or 17% compared to fiscal 2020, which is in line with the decrease in our revenue in 2021.
Our costs of sales in 2022 increased by US$0.1 million or 4% compared to fiscal 2021, which is in line with the increase in our revenue in 2022.
These increases were mainly due to the easing of Covid 19 travel restrictions in 2022 since the U.S. has lifted most of the Covid 19 restrictions during 2022. As such, students were able to return to the U.S. to attend classes.
These increases were mainly due to ease of COVID-19 travel restrictions in 2022 since US has lifted most of the COVID-19 restrictions during 2022. As such, students were able to return to US to attend classes.
Operating Activities: September 30, 2021 vs. 2020 Net cash generated from operating activities was US$0.3 million for the year ended September 30, 2021, compared to net cash used in operating activities of US$0.1 million for the year ended September 30, 2020, represented a US$0.4 million increase in the net cash inflow generated from operating activities.
Operating Activities: September 30, 2022 vs. 2021 Net cash used in operating activities was US$4.6 million for the year ended September 30, 2022, compared to net cash generated from operating activities of US$0.3 million for the year ended September 30, 2021, represented a US$4.9 million increase in the net cash outflow in operating activities.
For the year ended September 30, 2020, the change was a net cash inflow of US$1.0 million, which led to a US$1.3 million decrease in net cash inflow from operating activities. 35 September 30, 2022 vs. 2021 Net cash used in operating activities was US$4.6 million for the year ended September 30, 2022, compared to net cash generated from operating activities of US$0.3 million for the year ended September 30, 2021, represented a US$4.9 million increase in the net cash outflow in operating activities.
For the year ended September 30, 2021, the change was a net cash outflow of US$0.1 million, which led to a US$4.1 million increase in net cash inflow in operating activities. 36 September 30, 2023 vs. 2022 Net cash used in operating activities was US$5.3 million for the year ended September 30, 2023, compared to net cash used in operating activities of US$4.6 million for the year ended September 30, 2022, represented a US$0.6 million increase in the net cash outflow in operating activities.
For the year ended September 30, 2020, the change was a net cash outflow of US$0.7 million, which led to a US$0.1 million increase in net cash outflow from operating activities. 7) Change in student deposits used US$0.3 million net cash outflow for the year ended September 30, 2021.
For the year ended September 30, 2022, the change was a net cash inflow of US$0.01 million, which led to a US$0.3 million increase in net cash inflow from operating activities. 7) Change in student deposits used US$0.04 million net cash outflow for the year ended September 30, 2023.
For the year ended September 30, 2021, the change was a net cash inflow of US$0.1 million, which led to a US$4.2 million increase in net cash inflow in operating activities. Investing Activities: September 30, 2022, 2021 and 2020 Net cash used in investing activities was US$0.3 million for the year ended September 30, 2020.
For the year ended September 30, 2022, the change was a net cash inflow of US$4.0 million, which led to a US$1.1 million decrease in net cash inflow in operating activities. 37 Investing Activities: September 30, 2023, 2022 and 2021 Net cash used in investing activities was US$0.5 million for the year ended September 30, 2021.
Selling expenses For The Year Ended For The Year Ended For The Year Ended September 30, 2022 September 30, 2021 September 30, 2020 Selling expenses $ 952,888 $ 1,732,758 $ 2,310,188 The Company’s selling expenses primary relate to the student recruitment commission fees paid to agents who provided student recruitment services to the Company and expenses related to business development.
Selling expenses For The Year Ended For The Year Ended For The Year Ended September 30, 2023 September 30, 2022 September 30, 2021 Selling expenses $ 1,018,894 $ 952,888 $ 1,732,758 The Company’s selling expenses primarily relate to the student recruitment commission fees paid to agents who provided student recruitment services to the Company and expenses related to business development.
Our operating expenses increased by 135% compared to fiscal 2021 primarily due to the increase in our general administrative expenses as a result of stock-based compensations granted to our directors, officers and employees and new management service fee incurred in fiscal 2022.
Our operating expenses increased by US$6.6 million compared to fiscal 2021 primarily due to the increase in our general administrative expenses as a result of stock-based compensations granted to our directors, officers and employees in fiscal 2022.
The increase in net cash generated from operating activities was primarily due to the following: 1) We had net loss of US$1.1 million for the year ended September 30, 2021.
The increase in net cash outflow in operating activities was primarily due to the following: 1) We had a net loss of US$7.2 million for the year ended September 30, 2023.
The following table sets forth a breakdown of the income tax expense for the Company. For The Year Ended For The Year Ended For The Year Ended September 30, 2022 September 30, 2021 September 30, 2020 Income tax expenses (recovery) $ (83,355 ) $ (307,168 ) $ 397,553 The Company had an operating loss in 2021.
The following table sets forth a breakdown of the income tax expense for the Company. For The Year Ended For The Year Ended For The Year Ended September 30, 2023 September 30, 2022 September 30, 2021 Income tax expenses (recovery) $ 289,464 $ (191,029 ) $ (307,168 ) The Company had an operating loss in 2022.
It was primarily attributable to the net effects of: (i) US$0.3 million net repayment of notes receivable; (ii) $0.3 million used in long-term investment; (iii) net amount of US$1.9 million used in business and asset acquisitions; and (iv) proceeds of US$1.9 million from sale of a real estate property. 36 Financing Activities: September 30, 2022, 2021 and 2020 For the year ended September 30, 2020, the Company had net cash used in financing activities of US$0.4 million, which was attributable to cash used in IPO activities.
It was attributable to the net effects of: i) US$0.3 million net repayment of notes receivable; ii) net amount of US$1.9 million used in business and asset acquisitions; and iii) proceeds of US$1.9 million from sale of a real estate property. Net cash used in investing activities was US$0.9 million for the year ended September 30, 2023.
The decrease is due to reduction in the Company’s marketing development activities during fiscal 2022. 32 General and administrative expense General and administrative expense consist primarily of the following expenses: For the Year Ended September 30, 2022 For the Year Ended September 30, 2021 For the Year Ended September 30, 2020 Bank charges $ 8,982 $ 7,058 $ 7,586 Depreciation expenses 252,097 126,234 87,593 Insurance 70,515 57,057 79,303 Office expenses 190,338 629,771 555,176 Professional 1,131,745 439,790 185,990 Rental expenses 496,054 396,263 405,195 Repairs and maintenance 64,317 33,883 89,520 Salary and benefits 1,043,343 1,328,671 1,515,799 Management service fee 2,160,000 - - Stock-based compensation 4,813,049 - - Sundry 177,153 35,634 66,813 Tax and licenses 87,942 85,321 111,471 Vehicle expenses 26,016 8,574 10,674 Total 10,521,551 3,148,256 3,115,120 Our general administrative (“G&A”) expenses are generally fixed and will not significantly vary according to the changes of our revenue.
The decrease is due to reduction in the Company’s marketing development activities during fiscal 2022. 33 General and administrative expense General and administrative expense consist primarily of the following expenses: For the Year Ended September 30, 2023 For the Year Ended September 30, 2022 For the Year Ended September 30, 2021 Bank charges $ 9,156 $ 8,982 $ 7,058 Depreciation expenses 407,384 252,097 126,234 Insurance 64,393 70,515 57,057 Office expenses 721,419 190,338 629,771 Professional 1,581,541 1,131,745 439,790 Rental expenses 694,067 496,054 396,263 Repairs and maintenance 3,169 64,317 33,883 Salary and benefits 2,246,993 1,043,343 1,328,671 Management service fee 2,430,000 2,160,000 - Stock-based compensation 1,920,573 4,813,049 - Sundry 121,915 177,153 35,634 Tax and licenses 34,362 87,942 85,321 Vehicle expenses 35,296 26,016 8,574 Impairment 14,019 - - Bad debt 29,936 - - Total 10,314,223 10,521,551 3,148,256 Our general administrative (“G&A”) expenses are generally fixed and will not significantly vary according to the changes of our revenue.
Our revenues increased by US$1.0 million or 19% in fiscal 2022 compared to fiscal 2021. The increase was mainly due to the ease of the Covid 19 travel restrictions during fiscal 2022. As a result, there were more students registered in our program in 2021 compared to those registered in 2020.
Our revenues increased by US$1.0 million or 18% in fiscal 2022 compared to fiscal 2021. The increase was mainly due to the ease of the COVID-19 travel restrictions during fiscal 2022.
Hence, our net loss for the year ended September 30, 2022 increased by 475% as compared to that of the year ended September 30, 2021. Our revenue for the year ended September 30, 2021 decreased by 41% as compared to that of the year ended September 30, 2020.
Hence, our net loss for the year ended September 30, 2023 increased by US$1.0 million as compared to that of the year ended September 30, 2022. Our revenue for the year ended September 30, 2022 increased by US$1.0 million as compared to that of the year ended September 30, 2021.
Net income (loss) Net loss for the year ended September 30, 2021 was US$1.1 million, compared to the net income of US$1.0 million for the year ended September 30, 2020, representing a decrease in net income of US$2.1 million.
Net income (loss) Net loss for the year ended September 30, 2022 was US$6.1 million, compared to the net loss of US$1.1 million for the year ended September 30, 2021, representing an increase in net loss of US$5.0 million.
For the year ended September 30, 2020, change in accounts payable and accrued liabilities provided net cash inflow of US$0.5 million, which led to a US$0.6 million increase in net cash inflow from operating activities. 5) Change in deferred revenue, provided US$1.0 million net cash inflow for the year ended September 30, 2021.
For the year ended September 30, 2022, change in accounts payable and accrued liabilities used net cash outflow of US$1.3 million, which led to a US$1.1million decrease in net cash outflow from operating activities. 5) Change in deferred revenue generated US$0.2 million net cash inflow for the year ended September 30, 2023.
Our gross margin in 2022 increased to 68% from 64% of 2021 primarily due to our students starting to resume physical attendance of the English Program courses in the U.S. due to the lifting of Covid 19 travel restrictions, and more students using dormitory services instead of attending the English courses online.
Our gross margin in 2022 increased to 68% from 64% of 2021 primarily due to our students started to resume physical attendance of the English Program courses in the US due to the lifting of COVID-19 travel restrictions.
For the year ended September 30, 2020, change in long-term prepaid expenses provided US$0.6 million cash inflow, which led to a US$0.4 million decrease in net cash inflow from operating activities. 4) Change in accounts payable and accrued liabilities provided US$1.1 million net cash inflow for the year ended September 30, 2021.
For the year ended September 30, 2022, change in accounts receivable provided US$0.1 million cash inflow, which led to a US$0.1 million increase in net cash inflow from operating activities. 4) Change in accounts payable and accrued liabilities used US$0.2 million net cash outflow for the year ended September 30, 2023.
For the year ended September 30, 2022, the Company had net cash provided by financing activities of US$0.2 million, which was attributable to collection of remaining IPO proceeds of US$0.2 million previously held in trust account. Commitments The Company had certain office leases and car leases in relation to its operations. These leases are classified as operating leases.
For the year ended September 30, 2022, the Company had net cash provided by financing activities of US$0.2 million, which was attributable to collection of remaining IPO proceeds of US$0.2 million previously held in trust account. For the year ended September 30, 2023, the Company did not have financing activities.
Therefore, we did not need to pay the additional costs to a local university in China to provide online courses to students who went to the U.S. for in-class courses.
Therefore, we did not need to pay the additional costs to a local university in China to provide online courses to students who went to the US for in-class courses. Operating expenses Our operating expenses consist of selling and marketing expenses, and general and administrative expenses.
For the year ended September 30, 2020, change in deferred revenue used net cash flow of US$3.2 million, which led to a US$4.2 million increase in net cash inflow from operating activities. 6) Change in current and deferred income taxes in total used US$0.8 million net cash outflow for the year ended September 30, 2021.
For the year ended September 30, 2022, change in deferred revenue used net cash outflow of US$1.3 million, which led to a US$1.5 million increase in net cash inflow from operating activities. 6) Change in income tax receivable provided US$0.3 million net cash inflow for the year ended September 30, 2023.
Hence, our net income for the year ended September 30, 2021 decreased by 207% as compared to that of the year ended September 30, 2020. As of September 30, 2022, our cash was US$11.4 million, representing a decrease of US$5.1 million from US$16.5 million as of September 30, 2021.
Hence, our net loss for the year ended September 30, 2022 increased by US$5.0 million as compared to that of the year ended September 30, 2021. As of September 30, 2023, our cash was US$5.3 million, including restricted cash. This represents a decrease of US$6.1 million from US$11.4 million as of September 30, 2022.
For the year ended September 30, 2020, we had net income of US$1.0 million which led to a US$2.1 million decrease in net cash inflow from operating activities. 2) Change in prepaid expenses was US$0.1 million cash inflow for the year ended September 30, 2021.
For the year ended September 30, 2022, we had a net loss of US$6.1 million which led to a US$1.1 million increase in net cash outflow in operating activities. 2) Change in prepaid expenses used US$1.3 million cash outflow for the year ended September 30, 2023.
For the year ended September 30, 2020, change in prepaid expenses was a US$0.5 million cash inflow, which led to a US$0.4 million decrease in net cash inflow from operating activities. 3) Change in long-term prepaid expenses provided US$0.2 million net cash inflow for the year ended September 30, 2021.
For the year ended September 30, 2022, change in prepaid expenses provided a US$0.6 million cash inflow, which led to a US$1.9 million increase in net cash outflow from operating activities. 3) Change in accounts receivable generated US$0.2 million net cash inflow for the year ended September 30, 2023.
We continually evaluate these estimates and assumptions based on historical experience, knowledge and assessment of current business and other conditions, expectations regarding the future based on available information and reasonable assumptions, which together form a basis for making judgments about matters not readily apparent from other sources.
We continually evaluate these estimates and assumptions based on historical experience, knowledge and assessment of current business and other conditions, expectations regarding the future based on available information and reasonable assumptions, which together form a basis for making judgments about matters not readily apparent from other sources. 38 The following discussion of critical accounting policies and estimates is intended to supplement the significant accounting policies presented in the notes to our consolidated financial statements included in “Item 18: Financial Statements” presented in this Form 20-F, which summarize the accounting policies and methods used in the preparation of those consolidated financial statements.
Research and development, patents and licenses As an education service provider, our business does not rely on research and development. Therefore, we have not incurred research and development expenses for the years ended September 30, 2022, 2021 and 2020. D.
Therefore, we have not incurred research and development expenses for the years ended September 30, 2023, 2022 and 2021. D.
We expect that the Company’s capital requirements will be met by cash generated from its own operating activities. 34 Cash Flow Summary Years Ended September 30, 2022, 2021 and 2020 For the year ended September 30, 2022 For the year ended September 30, 2021 For the year ended September 30, 2020 Net cash provided by (used in) operating activities (4,613,697 ) 322,190 (144,043 ) Net cash provided by (used in) investing activities (651,480 ) (514,529 ) (288,555 ) Net cash provided by (used in) financing activities 200,000 9,321,523 (432,035 ) Effect of exchange rate changes on cash (28,938 ) - - Net increase (decrease) in cash (5,094,115 ) 9,129,184 (864,633 ) Cash at beginning of year 16,537,174 7,407,990 8,272,623 Cash at end of year 11,443,059 16,537,174 7,407,990 We had a balance of cash and cash equivalents of US11.4 million as of September 30, 2022, US$16.5 million as of September 30, 2021, and a balance of US$7.4 million as of September 30, 2020.
On December 26, 2023, the Company completed a unit offering private placement and issued 400,000 units with unit price of $2.00, raising total gross proceeds of US0.8 million. 35 Cash Flow Summary Years Ended September 30, 2023, 2022 and 2021 For the year ended September 30, 2023 For the year ended September 30, 2022 For the year ended September 30, 2021 Net cash provided by (used in) operating activities (5,252,527 ) (4,613,697 ) 322,190 Net cash provided by (used in) investing activities (877,635 ) (651,480 ) (514,529 ) Net cash provided by (used in) financing activities - 200,000 9,321,523 Effect of exchange rate changes on cash (7,346 ) (28,938 ) - Net increase (decrease) in cash (6,137,508 ) (5,094,115 ) 9,129,184 Cash at beginning of period 11,443,059 16,537,174 7,407,990 Cash at end of period 5,305,551 11,443,059 16,537,174 We had a balance of cash and cash equivalents of US5.3 million (including restricted cash) as of September 30, 2023, US11.4 million as of September 30, 2022, and a balance of US$16.5 million as of September 30, 2021.
The decrease is mainly due to the net operating loss in fiscal 2022. 30 Results of Operations Years Ended September 30, 2022, 2021 and 2020 For The Year Ended For The Year Ended For The Year Ended September 30, 2022 September 30, 2021 September 30, 2020 Revenues $ 6,330,428 $ 5,341,850 $ 9,063,137 Costs of services 2,021,058 1,934,237 2,342,276 Gross profit 4,309,370 3,407,613 6,720,861 Operating costs and expenses: Selling expenses 952,888 1,732,758 2,310,188 General and administrative 10,521,551 3,148,256 3,115,120 Total operating costs and expenses 11,474,439 4,881,014 5,425,308 Income (loss) from operations (7,165,069 ) (1,473,401 ) 1,295,553 Other income (845,598 ) (81,920 ) (113,555 ) Income (loss) before provision for income taxes (6,319,471 ) (1,391,481 ) 1,409,108 Income taxes expense (recovery) (83,355 ) (307,168 ) 397,553 Net income (6,236,116 ) (1,084,313 ) 1,011,555 Revenue, costs of sales and gross profit margin The following table sets forth the revenue, costs of sales and gross profit margin of the Company: For The Year Ended For The Year Ended For The Year Ended September 30, 2022 September 30, 2021 September 30, 2020 Revenues $ 6,330,428 $ 5,341,850 $ 9,063,137 Costs of services 2,021,058 1,934,237 2,342,276 Gross profit 4,309,370 3,407,613 6,720,861 Gross profit margin % 68 % 64 % 74 % Nearly all our revenue is attributable to our tuition fees and dormitory rental fees that we collected from our students.
The decrease is mainly due to the net operating loss in fiscal 2023. 31 Results of Operations Years Ended September 30, 2023, 2022 and 2021 For The Year Ended For The Year Ended For The Year Ended September 30, 2023 September 30, 2022 September 30, 2021 Revenues $ 5,712,480 $ 6,330,428 $ 5,341,850 Costs of services 1,502,255 2,021,058 1,934,237 Gross profit 4,210,225 4,309,370 3,407,613 Operating costs and expenses: Selling expenses 1,018,894 952,888 1,732,758 General and administrative 10,314,223 10,521,551 3,148,256 Total operating costs and expenses 11,333,117 11,474,439 4,881,014 Income (loss) from operations (7,122,892 ) (7,165,069 ) (1,473,401 ) Other income (239,231 ) (845,598 ) (81,920 ) Income (loss) before provision for income taxes (6,883,661 ) (6,319,471 ) (1,391,481 ) Income taxes expense (recovery) 289,464 (191,029 ) (307,168 ) Net loss (7,173,125 ) (6,128,442 ) (1,084,313 ) Revenue, costs of sales and gross profit margin The following table sets forth the revenue, costs of sales and gross profit margin of the Company: For The Year Ended For The Year Ended For The Year Ended September 30, 2023 September 30, 2022 September 30, 2021 Revenues – English education program $ 3,946,380 $ 6,330,428 $ 5,341,850 Revenues – professional training programs 1,766,100 - - Costs of services English education programs 837,055 2,021,058 1,934,237 Costs of services professional training programs 665,200 - - Gross profit 4,210,225 4,309,370 3,407,613 Gross profit margin % 74 % 68 % 64 % Revenue Our revenues decreased by US$0.6 million or 10% in fiscal 2023 compared to fiscal 2022.
The Company relies on agents to promote and recruit potential students to enroll in its English learning programs. The total selling expenses decreased by US$0.6 million in 2021 compared to 2020. The decrease is in line with the decrease of our revenue in 2021 as compared to 2020.
The Company relies on agents to promote and recruit potential students to enroll in its English learning programs. Total selling expenses increased by US$0.07 million in 2023 compared to 2022. The increase is primary due to inclusion of the operating expenses of the newly acquired Davis University in 2023.
Operating Results We were founded in 2012. Our revenue is primarily derived from foreign education program fees paid and student accommodation services. Our revenue for the year ended September 30, 2022 increased by 19% as compared to that of the year ended September 30, 2021.
Operating Results We were founded in 2012. Our revenue is primarily derived from English education programs for the years ended September 30, 2022 and 2021 and from English education programs and professional training programs for the year ended September 30, 2023.
Our general administrative expenses remained relatively stable in 2021 compared to 2020, only slightly increased by US$0.03 million. This was because there were no significant changes in our G&A activities in 2021.
Our general administrative expenses remained relatively stable in 2023 compared to 2022, only slightly decreased by US$0.2 million. This was because there were no significant changes in our G&A activities in 2023 other than certain items such as salary and benefits. The significant increase in salary and benefits was due to the inclusion of the newly acquired Davis College subsidiary.
This was mainly due to the acquisitions and incorporations of four new subsidiaries in total during 2022. As a result, business activities also increased. Income Tax BVI Under the current laws of the BVI, the Company is not subject to tax on income or capital gain.
This was mainly due to the acquisitions and incorporations of four new subsidiaries in total during 2022. As a result, business activities also increased. Other income Other income of US$0.2 million in fiscal 2023 is mainly related to government grant for COVID-19 relief.
Net loss for the year ended September 30, 2022 was US$6.2 million, compared to the net loss of US$1.1 million for the year ended September 30, 2021, representing an increase in net loss of US$5.1 million. B. Liquidity and Capital Resources Cash Flows and Working Capital To date, we have financed our operations primarily through cash generated by operating activities.
Net loss for the year ended September 30, 2023 was US$7.2 million, compared to the net loss of US$6.1 million for the year ended September 30, 2022, representing an increase in net loss of US$1.1 million. B.
As a result of the Covid 19 impacts, there were less student registered in our program in 2020 compared to those registered in 2019. 31 Costs of sales (services) mainly related to the program fees that we paid to our partnered university which provides the English learning programs to our students and fees paid to Dongbei University of Finance and Economics (“DUFE”) for using DUFE’s facilities, to host remote online English education programs and provide accommodation to students during their studies.
As a result, there were more students (230 students) registered in our 2021 Fall program compared to the 105 students registered in our 2020 Fall program. 32 Costs of services Costs of services for English education program mainly related to the program fees that we paid to our partnered university which provides the English learning program to our students.
The income tax recovery in 2021 is related to the deferred income tax assets recognized for the loss carryforward. The Company had an operating loss in 2022. The income tax recovery in 2022 is related to the deferred income tax assets recognized for the loss carryforward.
The income tax recovery in 2022 is related to the deferred income tax assets recognized for the loss carryforward. The Company had an operating loss in 2023. The income tax expense in 2023 is related to new valuation allowance provide based on the Company’s assessment of its ability to use the temporary deductible differences in foreseeable future.
It was solely attributable to the cash used for purchase of property and equipment during the year. Net cash used in investing activities was US$0.5 million for the year ended September 30, 2021.
It was attributable to the net effects of: i) US$1.2 million used for share buyback; and ii) US$0.2 million used in acquisition of 20% share of a subsidiary; iii) net cash of US$0.6 million acquired from business and asset acquisitions; and iv) US$0.01 million used for purchase of property and equipment.
These decreases were mainly due to the impacts from Covid 19 travel restrictions. Our operating expenses decreased by 10% compared to fiscal 2020 primarily due to the decrease in our selling expenses as a result of the decrease in our revenue.
Our revenue for the year ended September 30, 2023 decreased by US$0.6 million as compared to that of the year ended September 30, 2022. These decreases were mainly due to the net effect of: i) a US$2.4 million decrease in revenue from our English education program due to the continuing effects of the COVID-19 pandemic.
Removed
Our revenues decreased by US$3.7 million or 41% in fiscal 2021 compared to fiscal 2020. The decrease was mainly due to the impacts of Covid 19.
Added
When a new wave of COVID-19 pandemic occurred in China starting in November 2022, our recruiting activities for the spring and summer semesters of the 2022-23 academic year were again significantly affected; and ii) a US$1.8 million increase in revenue from professional training programs due to the inclusion of our newly acquired Davis College subsidiary in 2023.
Removed
The program fees are based on semester terms and are generally fixed per student and per semester. Our English learning programs contain five competence levels. Generally, the last level (Level-five) generally has a lower cost of services and therefore has higher gross margin than programs offered for the first four competence level programs.
Added
Our operating expenses decreased by US$0.1 million compared to fiscal 2022 primarily due to the decrease in our general administrative expenses. Our income tax expenses increased by US$0.5 million compared to fiscal 2022 primarily due to the new valuation allowance provided in 2023 based on the Company’s assessment of its ability to use the temporary deductible differences in foreseeable future.
Removed
Our gross margin in 2021 decreased to 64% from 74% of 2020 primarily due to our students could not physically attend the English Program courses in the U.S. due to the Covid 19 travel restrictions. Therefore, we had to engage a local university in China and used their facility to continue provide our English Program courses locally.
Added
These decreases were mainly due to the net effect of: i) a US$2.4 million decrease in revenue from our English education program due to the continuing effects of the COVID-19 pandemic.
Removed
The use of the facility of the local university represented incremental costs for us and therefore reduced our gross margin. Operating expenses Our operating expenses consist of selling and marketing expenses, and general and administrative expenses.
Added
When a new wave of COVID-19 pandemic occurred in China starting in November 2022, our recruiting activities for the spring and summer semesters of the 2022-23 academic year were again significantly affected; and ii) a US$1.8 million increase in revenue from professional training programs due to the inclusion of our newly acquired Davis College subsidiary in 2023.
Removed
Other than these operating leases, the Company does not have significant commitments, long-term obligations, or guarantees as of September 30, 2022 and 2021.
Added
The program fees are based on semester terms and are generally fixed per student and per semester. Costs of services for professional training programs mainly related to salary expenses incurred for instructors and employees that are directly involved in assisting the provisions of the program services.
Removed
Operating lease The future aggregate minimum lease payments under the non-cancellable residential apartment building operating lease are as follows: 2023 $ 484,739 2024 469,120 2025 and thereafter 230,461 Total future minimum lease payments $ 1,184,320 Less: imputed interest (161,262 ) Total operating lease liability $ 1,023,058 Less: operating lease liability - current 461,161 Total operating lease liability – non current $ 561,897 C.
Added
Our costs of services in 2023 decreased by US$0.5 million or 25% compared to fiscal 2022, which is due to the net effect of: i) costs of services for English education programs decreased by US$1.2 million due to the decrease in revenue from English education program and the termination of cooperation with Dongbei University of Finance and Economics; and ii) costs of services for professional training programs increased by US0.7 million due to inclusion of the newly acquired Davis College’s operations in fiscal 2023.
Removed
The use of estimates is an integral component of the financial reporting process, though actual results could differ from those estimates.
Added
Gross margins Our gross margin in 2023 increased to 74% from 68% of 2022 primarily due to the net effect of: i) our gross margin for English education program for 2023 is 79% compared to 68% of 2022 due to more students resumed physical attendance of the English Program courses in the US due to the lifting of COVID-19 travel restrictions.
Removed
Please refer to Note 2 of consolidated financial statements included in this 20-F annual report for the accounting policies critical to an understanding of our consolidated financial statements as their application places the most significant demands on the judgment of our management. 37
Added
Therefore, we did not need to pay the additional costs to a local university in China to provide online courses to students who went to US for in-class courses; and ii) our gross margin for professional training programs is 62% for 2023, which is the first year we had revenue from this revenue stream.
Added
The significant decrease in stock-based compensation in 2023 compared to 2022 was due to the share prices were lower in 2023 and the Company’s share-based compensation was mostly related to direct common shares granted to directors, officers and employees.
Added
Other income of $0.8 million in fiscal 2022 is mainly related to gain from disposal of fixed assets. Other income for fiscal 2021 was immaterial. Income Tax BVI Under the current laws of the BVI, the Company is not subject to tax on income or capital gain.
Added
Liquidity and Capital Resources Cash Flows and Working Capital To date, we have financed our operations primarily through cash raised from our last initial public offering, US$9.3 million, and cash generated by operating activities.
Added
We expect that the Company’s capital requirements will be met by cash generated from its own operating activities and equity financing.
Added
For the year ended September 30, 2022, the change was a net cash outflow of US$0.6 million, which led to a US$0.6 million decrease in net cash outflow in operating activities. 8) Change in non-cash items, including depreciation, goodwill impairment, accretion of lease expenses, gain/loss from disposal of fixed assets, deferred income taxes and stock-based compensation expenses, provided a total of US$2.9 million net cash inflow for the year ended September 30, 2023.
Added
Off-balance Sheet Arrangements The Company had not entered into any off-balance sheet transactions or arrangements as at the latest practicable date. C. Research and development, patents and licenses As an education service provider, our business does not rely on research and development.
Added
The policies and the estimates discussed below are included here because they require more significant judgments and estimates in the preparation and presentation of our consolidated financial statements than other policies and estimates. Actual amounts could differ materially from those estimated by us at the time our consolidated financial statements are prepared.
Added
Business Combinations Accounting for business combinations requires management to make significant estimates and assumptions, particularly for the valuation of intangible assets. The fair value of intangible assets are based upon widely-accepted valuation techniques, including discounted cash flows, multi period excess earnings method, replacement costs, and relief from royalty method, depending on the nature of the assets acquired or liabilities assumed.
Added
Inherent in each valuation technique are critical assumptions, including future cash flows and growth rates, gross margins, attrition rates, royalty rates, discount rates, and terminal value and forecast period assumptions. The discount rates used to discount expected cash flows to present values are typically derived from a weighted average cost of capital analysis and adjusted to reflect inherent risks.
Added
Unanticipated events and circumstances may occur that could affect either the accuracy or validity of such assumptions, estimates or actual results. Goodwill Goodwill is not amortized, but it is tested annually for impairment as of September 30, or more frequently if events or changes in circumstances indicate that those assets might be impaired.
Added
Goodwill is tested for impairment at a reporting unit level, which is at the same level or one level below an operating segment. The reporting units that contain goodwill include Professional Training Program reporting unit and Other reporting unit.
Added
We have the option of performing a qualitative assessment of a reporting unit to determine whether a quantitative impairment test is necessary.
Added
A qualitative assessment involves evaluating factors to determine the existence of events or circumstances that would indicate whether it is more likely than not that the fair value of the reporting unit to which goodwill belongs is less than its carrying amount.
Added
If the qualitative assessment indicates that the fair value of the reporting unit is more likely than not less than the carrying amount, then a quantitative impairment test would be performed. If a quantitative impairment test is required, the process is to identify potential impairment by comparing the reporting unit’s fair value with its carrying amount.
Added
The reporting unit’s fair value is determined using various valuation methodologies including assets-based, income or market approaches. In determining the reporting unit’s fair value, management is required to make judgments and assumptions relating to future cash flows, growth rates and economic and market conditions.
Added
Professional Training Program reporting unit goodwill For the year ended September 30, 2023, we performed a qualitative assessment of the Professional Training Program reporting unit and we concluded there were no indicators of impairment that existed.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

52 edited+19 added−3 removed37 unchanged
The term of the agreement shall expire on October 1, 2026, which term will automatically extend for additional 12-month periods unless a party to the agreement terminates it upon 90 days’ notice.
The term of the agreement shall expire on October 1, 2026, which term will automatically extend for additional 12-month periods unless a party to the agreement terminates it upon 90 days’ notice.
If the executive’s employment with the Company is terminated for any reason, the Company will pay to such executive any unpaid portion of his salary through the date of his termination, and any unpaid bonus through the date of termination, as well as any unpaid or unused portions of his benefits under the agreement.
If the executive’s employment with the Company is terminated for any reason, the Company will pay to such executive any unpaid portion of his salary through the date of his termination, and any unpaid bonus through the date of termination, as well as any unpaid or unused portions of his benefits under the agreement.
If his employment is terminated at the Company’s election without “cause” (as defined in the agreement), which requires 90 days’ advanced notice, or by him for “good reason” (as defined in the agreement), he shall be entitled to receive severance payments equal to 9 months’ of his base salary and a pro rata portion of his target annual bonus for the year when termination occurs.
If his employment is terminated at the Company’s election without “cause” (as defined in the agreement), which requires 90 days’ advanced notice, or by him for “good reason” (as defined in the agreement), he shall be entitled to receive severance payments equal to 9 months’ of his base salary and a pro rata portion of his target annual bonus for the year when termination occurs.
Employment Agreement with Yunxia Xu On November 1, 2021, the Company entered into an amendment and restated employment agreement, effective as of October 1, 2021, with Yunxia Xu pursuant to which she agreed to serve as the Company’s Chief Operating Officer and Chief Marketing Officer.
Yunxia Xu On November 1, 2021, the Company entered into an amendment and restated employment agreement, effective as of October 1, 2021, with Yunxia Xu pursuant to which she agreed to serve as the Company’s Chief Operating Officer and Chief Marketing Officer.
She is also entitled to reimbursement of reasonable expenses, and vacation, sick leave, health and other benefits customary to the agreements of this nature. Under the terms of the agreement, commencing with the year ending September 30, 2022, Ms.
She is also entitled to reimbursement of reasonable expenses, and vacation, sick leave, health and other benefits customary to the agreements of this nature. Under the terms of the agreement, commencing with the year ending September 30, 2022, Ms.
If the executive’s employment with the Company is terminated for any reason, the Company will pay to such executive any unpaid portion of her salary through the date of her termination, and any unpaid bonus through the date of termination, as well as any unpaid or unused portions of her benefits under the agreement.
If the executive’s employment with the Company is terminated for any reason, the Company will pay to such executive any unpaid portion of her salary through the date of her termination, and any unpaid bonus through the date of termination, as well as any unpaid or unused portions of her benefits under the agreement.
If the executive’s employment with the Company is terminated for any reason, the Company will pay to such executive any unpaid portion of his salary through the date of his termination, and any unpaid bonus through the date of termination, as well as any unpaid or unused portions of his benefits under the agreement.
If the executive’s employment with the Company is terminated for any reason, the Company will pay to such executive any unpaid portion of his salary through the date of his termination, and any unpaid bonus through the date of termination, as well as any unpaid or unused portions of his benefits under the agreement.
If his employment is terminated at the Company’s election without “cause” (as defined in the agreement), which requires 90 days’ advanced notice, or by him for “good reason” (as defined in the agreement), he shall be entitled to receive severance payments equal to 9 months’ of his base salary and a pro rata portion of his target annual bonus for the year when termination occurs.
If his employment is terminated at the Company’s election without “cause” (as defined in the agreement), which requires 90 days’ advanced notice, or by him for “good reason” (as defined in the agreement), he shall be entitled to receive severance payments equal to 9 months’ of his base salary and a pro rata portion of his target annual bonus for the year when termination occurs.
He holds a Ph.D. in Anthropology, Case Western Reserve University, Cleveland, Ohio (1981), a Master’s degree in Anthropology, Case Western Reserve University (1975) and an undergraduate degree in Anthropology, Miami University, Oxford, Ohio (1973). Mr. Pratt’s academic background and long-standing connections to our key partner, Miami University, represent an important contribution to the Board’s skillset. M.
He holds a Ph.D. in Anthropology, Case Western Reserve University, Cleveland, Ohio (1981), a Master’s degree in Anthropology, Case Western Reserve University (1975) and an undergraduate degree in Anthropology, Miami University, Oxford, Ohio (1973). Mr. Pratt’s academic background and long-standing connections to our key partner, Miami University, represent an important contribution to the Board’s skillset.
He also holds a B.A. degree in Economics from Nankai University, Tianjin, China (1999). Mr. Wu’s knowledge of the Company’s operations as well as his financial and accounting expertise are critical to the Company’s success. 38 Yunxia Xu is the Company’s Chief Operating Officer and Chief Marketing Officer.
He also holds a B.A. degree in Economics from Nankai University, Tianjin, China (1999). Mr. Wu’s knowledge of the Company’s operations as well as his financial and accounting expertise are critical to the Company’s success. Yunxia Xu is the Company’s Chief Operating Officer and Chief Marketing Officer.
Zhang will be eligible to receive an annual bonus of restricted stock units for up to 100,000 common shares, in the determination of the Company’s Compensation Committee, if the Company’s sales revenue increased by 20% during the fiscal year in question. Mr.
Zhang will be eligible to receive an annual bonus of restricted stock units for up to 100,000 common shares, in the determination of the Company’s Compensation Committee, if the Company’s sales revenue increased by 20% during the fiscal year in question. 43 Mr.
Mr. Wu has agreed not to compete with the Company for 9 months after the termination of his employment; he also executed certain non-solicitation, confidentiality and other covenants customary for agreements of this nature. In November 2021, for services Mr.
Mr. Wu has agreed not to compete with the Company for 9 months after the termination of his employment; he also executed certain non-solicitation, confidentiality and other covenants customary for agreements of this nature. 44 In November 2021, for services Mr.
There are no family relationships among our directors or officers. The business address of each party described above is c/o EpicQuest Education Group International Limited 1209 N. University Blvd, Middletown, OH 45042. 39 Board Diversity The table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.
There are no family relationships among our directors or officers. The business address of each party described above is c/o EpicQuest Education Group International Limited 1209 N. University Blvd, Middletown, OH 45042. 41 Board Diversity The table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.
Yu was issued 40,000 common shares, as well as restricted stock units for 30,000 common shares vesting in three equal installments in the period between October 1, 2021 and October 1, 2022, under the terms of the Company’s 2019 Equity Incentive Plan. C. Board Practices The term of each director is until their resignation or removal.
Yu was issued 40,000 common shares, as well as restricted stock units for 30,000 common shares vesting in three equal installments in the period between October 1, 2021 and October 1, 2022, under the terms of the Company’s 2019 Plan. C. Board Practices The term of each director is until their resignation or removal.
Zhang was issued restricted stock units for 250,000 common shares vesting in five equal installments in the period between October 1, 2021 and October 1, 2023, as well as an additional option to purchase 150,000 common shares, under the terms of the Company’s 2019 Equity Incentive Plan. On December 30, 2022, for services Mr.
Zhang was issued restricted stock units for 250,000 common shares vesting in five equal installments in the period between October 1, 2021 and October 1, 2023, as well as an additional option to purchase 150,000 common shares, under the terms of the Company’s 2019 Plan. On December 30, 2022, for services Mr.
Wu was issued restricted stock units for 150,000 common shares vesting in three equal installments on in the period between October 1, 2021 and October 1, 2022, as well as an additional option to purchase 125,000 common shares, under the terms of the Company’s 2019 Equity Incentive Plan. On December 30, 2022, for services Mr.
Wu was issued restricted stock units for 150,000 common shares vesting in three equal installments on in the period between October 1, 2021, and October 1, 2022, as well as an additional option to purchase 125,000 common shares, under the terms of the Company’s 2019 Plan. On December 30, 2022, for services Mr.
Li will be entitled to receive an annual cash bonus in the amount of up to US$15,000 if, in the determination of the Company’s Compensation Committee, the Company’s sales revenue increased by 20% during the fiscal year in question. This milestone was not achieved during the fiscal year ended September 30, 2022.
Yu will be entitled to receive an annual cash bonus in the amount of up to US$15,000 if, in the determination of the Company’s Compensation Committee, the Company’s sales revenue increased by 20% during the fiscal year in question. This milestone was not achieved during the fiscal year ended September 30, 2022.
Currently, three committees have been established under the board: the Audit Committee, the Compensation Committee and the Nominating Committee. 43 The Audit Committee is responsible for overseeing the accounting and financial reporting processes of our company and audits of the financial statements of our company, including the appointment, compensation and oversight of the work of our independent auditors.
Currently, three standing committees have been established under the board: the Audit Committee, the Compensation Committee and the Nominating Committee. The Audit Committee is responsible for overseeing the accounting and financial reporting processes of our company and audits of the financial statements of our company, including the appointment, compensation and oversight of the work of our independent auditors.
Officer Compensation; Employment Agreements Employment Agreement with Jianbo Zhang On November 1, 2021, the Company entered into an amendment and restated employment agreement, effective as of October 1, 2021, with Jianbo Zhang pursuant to which he agreed to serve as the Company’s Chief Executive Officer.
Jianbo Zhang On November 1, 2021, the Company entered into an amendment and restated employment agreement, effective as of October 1, 2021, with Jianbo Zhang pursuant to which he agreed to serve as the Company’s Chief Executive Officer.
The agreement provides for an annual base salary of US$35,000 payable in accordance with the Company’s common payroll practices. Under the terms of the agreement, Ms.
The agreement provides for an annual base salary of US$35,000 payable in accordance with the Company’s common payroll practices. Under the terms of the agreement, Mr.
Under the terms of the agreement, Mr. Yu will be entitled to receive an annual cash bonus in the amount of up to US$15,000 if, in the determination of the Company’s Compensation Committee, the Company’s sales revenue increased by 20% during the fiscal year in question. This milestone was not achieved during the fiscal year ended September 30, 2022.
Under the terms of the agreement, Ms. Li will be entitled to receive an annual cash bonus in the amount of up to US$15,000 if, in the determination of the Company’s Compensation Committee, the Company’s sales revenue increased by 20% during the fiscal year in question. This milestone was not achieved during the fiscal year ended September 30, 2022.
Compensation Director and Officer Compensation In October 2021, the Company’ Board of Directors, upon recommendation of the Compensation Committee of the Board of Directors, approved a non-employee director compensation plan, pursuant to which each non-employee director: (i) will be granted annually a number of restricted stock units equal to $30,000 divided by the closing price of the Company’s common shares, under the Company’s 2019 Equity Incentive Plan (the “Stock Plan”), on the date of the Company’s annual meeting of stockholders (the “Annual Grant”); and (ii) will receive the following cash compensation: (A) base compensation of $18,000 per year; (B) the chairperson of the Audit Committee, Compensation Committee and Nominating and Governance Committee shall receive annual compensation of $12,000, $6,000 and $6,000, respectively; and (C) each member (other than chairperson) of such committees shall receive annual compensation of $6,000.
Compensation Director Compensation In October 2021, the Board, upon the recommendation of the Compensation Committee of the Board of Directors, approved a non-employee director compensation plan (the “2021 Director Compensation Plan”), pursuant to which each non-employee director: (i) will be granted annually a number of restricted stock units equal to $30,000 divided by the closing price of the Company’s common shares, under the Company’s 2019 Equity Incentive Plan (the “2019 Plan”), on the date of the Company’s annual meeting of shareholders (the “Annual Grant”); and (ii) will receive the following cash compensation: (A) base compensation of $18,000 per year; (B) the chairperson of the Audit Committee, Compensation Committee and Nominating and Governance Committee shall receive annual compensation of $12,000, $6,000 and $6,000, respectively; and (C) each member (other than chairperson) of such committees shall receive annual compensation of $6,000.
Since December 2017, she held the position of General Manager at EpicQuest Education Group Ltd. Prior to that, from September 2016 to December 2017, she held the position of General Manager at QHI responsible for coordination and management of the U.S. offices.
Since December 2017, she held the position of General Manager at EpicQuest Education Group International Limited. Prior to that, from September 2016 to December 2017, she held the position of General Manager at QHI responsible for coordination and management of the U.S. offices.
Board Diversity Matrix for EpicQuest Education Group Limited As of 1/13/2023 Total Number of Directors 5 Did Not Part I: Gender Identity Female Male Non-Binary Disclose Gender Directors 1 4 0 0 Part II: Demographic Background Asian 0 2 0 0 White 1 2 0 0 B.
Board Diversity Matrix for EpicQuest Education Group Limited As of 1/31/2024 Total Number of Directors 5 Did Not Part I: Gender Identity Female Male Non-Binary Disclose Gender Directors 1 4 0 0 Part II: Demographic Background Asian 1 2 0 0 White 0 2 0 0 B.
In addition, to the creation of the foregoing plan, for the Company’ Compensation Committee approved a one-time grant of Company common shares to each of the non-employee directors as follows: (i) Mr.
In addition, to the creation of the foregoing plan, in October 2021 the Compensation Committee approved a one-time grant of Company common shares to each of the non-employee directors as follows: (i) Mr.
Audit Committee The Audit Committee will be responsible for, among other matters: ● appointing, compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm; ● discussing with our independent registered public accounting firm the independence of its members from its management; ● reviewing with our independent registered public accounting firm the scope and results of their audit; ● approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm; ● overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC; ● reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls, and compliance with legal and regulatory requirements; ● coordinating the oversight by our board of directors of our code of business conduct and our disclosure controls and procedures; ● establishing procedures for the confidential and or anonymous submission of concerns regarding accounting, internal controls or auditing matters; and ● reviewing and approving related-party transactions.
The Audit Committee’s responsibilities include the following functions: ● appointing, compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm; ● discussing with our independent registered public accounting firm the independence of its members from its management; ● reviewing with our independent registered public accounting firm the scope and results of their audit; ● approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm; ● overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC; ● reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls, and compliance with legal and regulatory requirements; 46 ● coordinating the oversight by our Board of our code of business conduct and our disclosure controls and procedures; ● establishing procedures for the confidential and or anonymous submission of concerns regarding accounting, internal controls or auditing matters; and ● reviewing and approving related-party transactions.
Zhang is also entitled to reimbursement of reasonable expenses, and vacation, sick leave, health and other benefits customary to the agreements of this nature. Mr. Zhang was also issued an option to purchase 50,000 common shares under the terms of the Company’s 2019 Equity Incentive Plan.
Zhang is also entitled to reimbursement of reasonable expenses, and vacation, sick leave, health and other benefits customary to the agreements of this nature. On October 1, 2022, Mr. Zhang was also issued an option to purchase 50,000 common shares under the terms of the Company’s 2019 Plan.
Wu is also entitled to reimbursement of reasonable expenses, and vacation, sick leave, health and other benefits customary to the agreements of this nature. Mr. Wu was also issued an option to purchase 40,000 common shares under the terms of the Company’s 2019 Equity Incentive Plan.
Wu is also entitled to reimbursement of reasonable expenses, and vacation, sick leave, health and other benefits customary to the agreements of this nature. On October 1, 2022, Mr. Wu was also issued an option to purchase 40,000 common shares under the terms of the Company’s 2019 Plan.
Our Nominating Committee consists of consists of Craig Wilson, G. Michael Pratt and Kelly Cowan, with Ms. Cowan serving as chair of the Nominating Committee. Our board has affirmatively determined that each of the members of the Nominating Committee meets the definition of “independent director” for purposes of serving on a Nominating Committee under Nasdaq rules.
Our Nominating Committee consists of consists of Xiaojun Cui, G. Michael Pratt and Craig Wilson, with Xiaojun Cui serving as chair of the Nominating Committee. Our Board has affirmatively determined that each of the members of the Nominating Committee meets the definition of “independent director” for purposes of serving on a Nominating Committee under NASDAQ rules. M.
Craig Wilson received a grant of shares equal to $27,000 (based on the Company’s common share price as of November 1, 2021) of which one-third of such shares were issued and the remaining two-thirds will be issued in equal installments on April 1, 2022 and October 1, 2022; and (ii) Ms. Cowan and Mr.
Craig Wilson received a grant of shares equal to $27,000 (based on the Company’s common share price as of November 1, 2021) of which one-third of such shares were issued and the remaining two-thirds were issued in equal installments on April 1, 2022 and October 1, 2022; and (ii) M. Kelly Cowan and G.
Employment Agreement with Bo Yu On November 1, 2021, the Company entered into an amendment and restated employment agreement, effective as of October 1, 2021, with Bo Yu pursuant to which he agreed to serve as the Company’s Chief Programs Officer. The agreement provides for an annual base salary of US$35,000 payable in accordance with the Company’s common payroll practices.
Jing Li On November 1, 2021, the Company entered into an amendment and restated employment agreement, effective as of October 1, 2021, with Jing Li pursuant to which she agreed to serve as the Company’s Chief Development Officer. The agreement provides for an annual base salary of US$35,000 payable in accordance with the Company’s common payroll practices.
Directors and senior management MANAGEMENT The following table sets forth our executive officers and directors, their ages and the positions held by them: Name Age Position Jianbo Zhang 58 Chairman, Chief Executive Officer Zhenyu Wu 43 Chief Financial Officer, Director Yunxia Xu 41 Chief Operating Officer and Chief Marketing Officer Jing Li 41 Chief Development Officer Bo Yu 48 Chief Programs Officer Craig Wilson (1)(4) 51 Independent Director G.
Directors and senior management MANAGEMENT The following table sets forth our executive officers and directors, their ages and the positions held by them: Name Age* Position Jianbo Zhang 59 Chairman, Chief Executive Officer Zhenyu Wu 44 Chief Financial Officer, Director Yunxia Xu 42 Chief Operating Officer and Chief Marketing Officer Jing Li 42 Chief Development Officer Bo Yu 49 Chief Programs Officer Craig Wilson (1‡)(2)(3)(4)** 52 Independent Director G.
Michael Pratt and Kelly Cowan, with Mr. Pratt serving as chair of the Compensation Committee. Our board has affirmatively determined that each of the members of the Compensation Committee meets the definition of “independent director” for purposes of serving on Compensation Committee under Nasdaq rules.
Our Compensation Committee consists of G. Michael Pratt, Craig Wilson and Xiaojun Cui, with Mr. Pratt serving as chair of the Compensation Committee. Our Board has affirmatively determined that each of the members of the Compensation Committee meets the definition of “independent director” for purposes of serving on Compensation Committee under NASDAQ rules. M.
Nominating Committee The Nominating Committee will be responsible for, among other matters: ● selecting or recommending for selection candidates for directorships; ● evaluating the independence of directors and director nominees; ● reviewing and making recommendations regarding the structure and composition of our board and the board committees; ● developing and recommending to the board corporate governance principles and practices; ● reviewing and monitoring the Company’s Code of Business Conduct and Ethics; and ● overseeing the evaluation of the Company’s management.
The Nominating Committee’s responsibilities include the following functions: ● selecting or recommending for selection candidates for directorships; ● evaluating the independence of directors and director nominees; 47 ● reviewing and making recommendations regarding the structure and composition of our board and the board committees; ● developing and recommending to the board corporate governance principles and practices; ● reviewing and monitoring the Company’s Code of Business Conduct and Ethics; and ● overseeing the evaluation of the Company’s management.
On December 30, 2022, the Company issued each non-employee director the Annual Grant, which was a RSU grant for 15,575 common shares (based on the closing price of the Company’s common shares on December 30, 2022 of $2.21) vesting upon the earlier of the first anniversary after the date of the grant or the date of the Company’s next annual meeting of stockholders, subject to the director’s continued service on the Board of Directors on such vesting date. 40 Retirement Benefits The Company contributes to defined contribution retirement schemes which are available to all employees.
On December 30, 2022, the Company issued each non-employee director the Annual Grant, which was a RSU grant for 13,575 common shares (based on the closing price of the Company’s common shares on December 30, 2022 of $2.21) vesting upon the earlier of the first anniversary after the date of the grant or the date of the Company’s next annual meeting of shareholders, subject to the director’s continued service on the Board of Directors on such vesting date.
Our board has affirmatively determined that each of the members of the Audit Committee meets the definition of “independent director” for purposes of serving on an Audit Committee under Rule 10A-3 of the Exchange Act and Nasdaq rules. In addition, our board has determined that Mr.
Our Board has affirmatively determined that each of the members of the Audit Committee meets the definition of “independent director” for purposes of serving on an Audit Committee under Rule 10A-3 of the Exchange Act and NASDAQ rules. Our Audit Committee consists of Craig Wilson, G. Michael Pratt and Xiaojun Cui, with Mr.
Wilson qualifies as an “audit committee financial expert” as such term is currently defined in Item 407(d)(5) of Regulation S-K and meets the financial sophistication requirements of the Nasdaq rules.
Wilson serving as chair of the Audit Committee. In addition, our Board has determined that Mr. Wilson qualifies as an “audit committee financial expert” as such term is currently defined in Item 407(d)(5) of Regulation S-K and meets the financial sophistication requirements of the NASDAQ rules. M.
Wu was issued an option to purchase 40,000 common shares with an exercise price of $2.21 vesting in four equal installments on the first calendar day of each full fiscal quarter under the terms of the Company’s 2019 Equity Incentive Plan.
Wu was issued an option to purchase 40,000 common shares with an exercise price of $2.21 vesting in four equal installments on the first calendar day of each full fiscal quarter under the terms of the Company’s 2019 Plan. On October 19, 2023, the Board, upon the recommendation of the Compensation Committee, approved the following compensation for Mr.
Xu was issued 60,000 common shares, as well as restricted stock units for 80,000 common shares vesting in four equal installments in the period between October 1, 2021 and April 1, 2023, under the terms of the Company’s 2019 Equity Incentive Plan. 42 Employment Agreement with Jing Li On November 1, 2021, the Company entered into an amendment and restated employment agreement, effective as of October 1, 2021, with Jing Li pursuant to which she agreed to serve as the Company’s Chief Development Officer.
Li was issued 5,000 common shares, as well as restricted stock units for 30,000 common shares vesting in three equal installments in the period between October 1, 2021 and October 1, 2022, under the terms of the Company’s 2019 Plan. 45 Bo Yu On November 1, 2021, the Company entered into an amendment and restated employment agreement, effective as of October 1, 2021, with Bo Yu pursuant to which he agreed to serve as the Company’s Chief Programs Officer.
Compensation Committee The Compensation Committee will be responsible for, among other matters: ● reviewing and approving, or recommending to the board of directors to approve the compensation of our CEO and other executive officers and directors; ● reviewing key employee compensation goals, policies, plans and programs; ● administering incentive and equity-based compensation; ● reviewing and approving employment agreements and other similar arrangements between us and our executive officers; and ● appointing and overseeing any compensation consultants or advisors. 44 Our Compensation Committee consists of Craig Wilson, G.
The Compensation Committee’s responsibilities include the following functions: ● reviewing and approving, or recommending to the Board to approve the compensation of our CEO and other executive officers and directors; ● reviewing key employee compensation goals, policies, plans and programs; ● administering incentive and equity-based compensation; ● reviewing and approving employment agreements and other similar arrangements between us and our executive officers; and ● appointing and overseeing any compensation consultants or advisors.
Pratt each received a grant of shares equal to $22,500 (based on the Company’s common share price as of November 1, 2021) of which one-third of such shares were issued and the remaining two-thirds will be issued in equal installments on April 1, 2022 and October 1, 2022. The Company held its annual meeting on November 28, 2022.
Michael Pratt each received a grant of shares equal to $22,500 (based on the Company’s common share price as of November 1, 2021) of which one-third of such shares were issued and the remaining two-thirds were issued in equal installments on April 1, 2022 and October 1, 2022. M. Kelly Cowan resigned from the Board on March 16, 2023.
Michael Pratt (2) 72 Independent Director M. Kelly Cowan (3) 61 Independent Director (1) Chair of the Audit Committee. (2) Chair of the Compensation Committee. (3) Chair of the Nominating Committee. (4) Audit Committee financial expert. Zhang Jianbo is the founding Chairman and Chief Executive Officer of the Company.
Michael Pratt (1)(2‡)(3) 73 Independent Director Xiaojun Cui (1)(2)(3‡) 53 Independent Director * As of January 22, 2024 ** Lead Independent Director ‡ Committee Chair (1) Audit Committee. (2) Compensation Committee. (3) Nominating Committee. (4) Audit Committee financial expert. Zhang Jianbo is the founding Chairman and Chief Executive Officer of the Company.
The Compensation Committee did not issue the Annual Grant on such date.
The Company held its annual meeting on November 28, 2022. The Compensation Committee did not issue the Annual Grant on such date.
Cowan’s academic background and long-standing connections to the Ohio university community represent an important contribution to the Board’s skillset. None of the events listed in Item 401(f) of Regulation S-K has occurred during the past ten years that is material to the evaluation of the ability or integrity of any of our directors, director nominees or executive officers.
Cui possesses extensive knowledge and expertise in the Higher Education sectors of the UK and China. None of the events listed in Item 401(f) of Regulation S-K has occurred during the past ten years that is material to the evaluation of the ability or integrity of any of our directors, director nominees or executive officers.
From 2018 to present, he has held the position of the Head of Department of Finance & Management Science, Edwards School of Business, University of Saskatchewan, and from 2008 to present – of an Associate Professor of Finance at the same School of Business. Mr.
From July 1, 2018 to June 30, 2023, he held the position of the Head of Department of Finance & Management Science, Edwards School of Business, University of Saskatchewan. Mr.
Employees As of September 30, 2022, we had 58 employees, of which 11 were located in the United States, 14 were located in Canada, and the remaining employees were located in China. There is no labor union for our employees. We believe our relations with our employees are good. E. Share Ownership See Item 7 below. 45
Employees As of September 30, 2023, the Company had 38 full-time and 22 part-time employees, of which 49 were located in the U.S., 10 were located in Canada, and 1 was located in Sri Lanka. There is no labor union for our employees. We believe our relations with our employees are good. E. Share Ownership See Item 7 below. F.
Li was issued 5,000 common shares, as well as restricted stock units for 30,000 common shares vesting in three equal installments in the period between October 1, 2021 and October 1, 2022, under the terms of the Company’s 2019 Equity Incentive Plan.
Xu was issued 60,000 common shares, as well as restricted stock units for 80,000 common shares vesting in four equal installments in the period between October 1, 2021, and April 1, 2023, under the terms of the Company’s 2019 Plan. On October 19, 2023, the Board, upon the recommendation of the Compensation Committee, approved the following compensation for Ms.
He obtained the Global Teacher Certificate – TEFL (Teaching English as a Foreign Language) from Trinity College, London, U.K. in 1999, and the Global Advanced English Trainer Certificate – LTCL in Sheffield, U.K. in 2000. He studied in the Master’s Degree in Education Program (TESOL MA) at Sheffield Harlem University, U.K. in 2001.
Prior to joining the Company in 2018, he held multiple positions with Global IELTS, Beijing School of Shinyway Education, and Meten English. He obtained the Global Teacher Certificate - TEFL (Teaching English as a Foreign Language) from Trinity College, London, U.K. in 1999, and the Global Advanced English Trainer Certificate - LTCL in Sheffield, U.K. in 2000.
From March 2013 to present, she has held the offices of Managing Director at QHI, responsible for marketing and partnership development, and team management. She holds a Bachelor’s degree in Polymer Materials from Institute of Clothing Technology, Beijing, China (2000-2004) and a Master’s degree in Polymers and Surface Coatings Science and Technology from University of Leeds, UK (2005-2007).
She holds a Bachelor’s degree in Polymer Materials from Institute of Clothing Technology, Beijing, China (2000-2004) and a Master’s degree in Polymers and Surface Coatings Science and Technology from University of Leeds, UK (2005-2007). 40 Bo Yu is the Company’s Chief Programs Officer.
Craig Wilson is an independent director of the Company. He is currently a Professor of Finance at Edwards School of Business, University of Saskatchewan.
He studied in the Master’s Degree in Education Program (TESOL MA) at Sheffield Harlem University, U.K. in 2001. Craig Wilson is an independent director of the Company. He is currently a Professor of Finance at Edwards School of Business, University of Saskatchewan, having worked there since July 1, 2002.
Zhang was issued an option to purchase 50,000 common shares with an exercise price of $2.21 vesting in four equal installments on the first calendar day of each full fiscal quarter under the terms of the Company’s 2019 Equity Incentive Plan. 41 Employment Agreement with Zhenyu Wu On November 1, 2021, the Company entered into an amendment and restated employment agreement, effective as of October 1, 2021, with Zhenyu Wu pursuant to which he agreed to serve as the Company’s Chief Financial Officer.
Zhang was issued an option to purchase 50,000 common shares with an exercise price of $2.21 vesting in four equal installments on the first calendar day of each full fiscal quarter under the terms of the Company’s 2019 Plan. On October 19, 2023, the Board, upon the recommendation of the Compensation Committee, approved the following compensation for Mr.
Director Independence Our board has reviewed the independence of our directors, applying the Nasdaq independence standards. Based on this review, the board determined that each of Craig Wilson, G. Michael Pratt and Kelly Cowan are “independent” within the meaning of the Nasdaq rules.
Kelly Cowan was the chair of the Nominating Committee prior to her resignation from the Board on March 16, 2023. Director Independence The Board has determined that Craig Wilson, G. Michael Pratt and Xiaojun Cui are each an independent director as defined in Rule 5605(a)(2) of the Listing Rules of the NASDAQ Stock Market LLC.
Removed
Bo Yu is the Company’s Chief Programs Officer. Prior to joining the Company in 2018, he held multiple positions with Global IELTS, Beijing School of Shinyway Education, and Meten English.
Added
From March 2013 to present, she has held the offices of Managing Director at QHI, responsible for marketing and partnership development, and team management.
Removed
Kelly Cowan is an independent director of the Company. From October 2015 to September 2016, Ms. Cowan held the position of Director of Middletown Campus at Cincinnati State Technical and Community College. Prior to that, from 1993 to 2014, she was a professor and Dean at Miami University Middletown Campus. Ms.
Added
Xiaojun Cui is an independent director of the Company and was appointed to the Board on October 19, 2023, to fill a vacancy created by the resignation of a prior director. Ms.
Removed
Our Audit Committee consists of Craig Wilson, G. Michael Pratt and Kelly Cowan, with Mr. Wilson serving as chair of the Audit Committee.
Added
Cui served as the Regional Manager for East Asia at Lancaster University since November 1, 2016, where her responsibilities included implementing international recruitment strategy, building international university partnerships and managing the recruitment agent network.
Added
She has degree in MSc Marketing from Edinburgh Napier University, where she worked, beginning in 2002 as the international Student Advisor, until leaving Napier in 2016 after serving as the International Partnership Manager for 9 years. Prior to working at Napier, Xiao worked at Dalian University of Foreign Languages as Project Manager, managing Study Abroad Language training Center. Ms.
Added
For the year ended September 30, 2023, the total compensation paid to the Company’s non-employee directors was as follows: Name (1) Fees earned or paid in cash ($) Stock Awards($) (2) Total ($) Craig Wilson $ 36,000 $ 30,000 $ 66,000 G. Michael Pratt $ 30,000 $ 30,000 $ 60,000 M.
Added
Kelly Cowan (3) $ 15,000 $ 30,000 $ 45,000 Xiaojun Cui (4) NA NA NA (1) Compensation paid to Jianbo Zhang, our Chairman and Chief Executive Officer, and Zhenyu Wu, our Chief Financial Officer, for their service on the Board of Directors is set forth below under the section titled Executive Officer Compensation.
Added
(2) Based on the Company’s common share price of $2.21, the closing price of the common shares on the date of grant. (3) M. Kelly Cowan resigned from the Board on March 16, 2023.
Added
(4) Xiaojun Cui was appointed to the Board on October 16, 2023, and did not receive compensation for the fiscal year ended September 30, 2023. 42 On October 19, 2023, the Board, upon the recommendation of the Compensation Committee, approved an updated director compensation plan for non-employee directors (the “2023 Director Compensation Plan”) that replaced the 2021 Director Compensation Plan.
Added
The 2023 Director Compensation Plan provides for the following: (i) annual cash retention payment of $40,000; (ii) the Committee chair-Audit: additional $15,000; (iii) Committee chair-Compensation: additional $10,000; (iii) Committee chair- Nominating and Governance: additional $10,000; (iv) Committee member-Audit: additional $6,000; (v) Committee member-Compensation: additional $6,000; (vi) Committee member- Nominating and Governance: additional $6,000; (vii) each director received a ten-year option to purchase 45,000 common shares options at an exercise price of $1.16 per share (the closing price of the common shares on the date of grant) vesting in one year for existing non-employee Board members and in three years for initial Board members; and (viii) for the Lead Independent Director a ten-year option to purchase 15,000 common shares options at an exercise price of $1.16 per share (the closing price of the common shares on the date of grant) vesting in one year.
Added
The Company held its annual meeting on November 24, 2023. The Compensation Committee did not issue the Annual Grant on such date, but expects to do so in the near future. Retirement Benefits The Company contributes to defined contribution retirement schemes which are available to all employees.
Added
Officer Compensation; Employment Agreements and Arrangements The total cash compensation paid by us or our significant subsidiaries during the years ended September 30, 2023 and September 30, 2022, to our officers for such persons’ services as officers (including contingent or deferred compensation accrued during the years ended September 30, 2023 and September 30, 2022, but not including any amounts paid to such persons for their services as directors), as well as equity-based compensation paid to our executive officers during the fiscal years ended September 30, 2022, and September 30, 2023, are described below.
Added
Zhang: (i) base salary: $1.00; (ii) issuance of restricted stock units for 200,000 common shares vesting in four equal quarterly installments during the fiscal year ending September 30, 2024; (iii) issuance of an option to purchase 500,000 common shares at an exercise price of $1.16 per share (the closing price of the common shares on the date of grant) vesting in four annual installments; and (iv) issuance of restricted stock units for 100,000 common shares vesting if the Company’s sales revenue increases by 20% during the year ending September 30, 2024.
Added
Zhenyu Wu On November 1, 2021, the Company entered into an amendment and restated employment agreement, effective as of October 1, 2021, with Zhenyu Wu pursuant to which he agreed to serve as the Company’s Chief Financial Officer.
Added
Wu: (i) base salary: $1.00; (ii) issuance of restricted stock units for 160,000 common shares vesting in four equal quarterly installments during the fiscal year ending September 30, 2024; (iii) issuance of an option to purchase 360,000 common shares at an exercise price of $1.16 per share (the closing price of the common shares on the date of grant) vesting in four annual installments; and (iv) issuance of restricted stock units for 80,000 common shares vesting if the Company’s sales revenue increases by 20% during the year ending September 30, 2024.
Added
Xu: (i) base salary: $50,000; (ii) issuance of restricted stock units for 60,000 common shares vesting in four equal quarterly installments during the fiscal year ending September 30, 2024; (iii) issuance of an option to purchase 20,000 common shares at an exercise price of $1.16 per share (the closing price of the common shares on the date of grant) vesting in four annual installments; and (iv) issuance of restricted stock units for 20,000 common shares vesting if the Company’s sales revenue increases by 20% during the year ending September 30, 2024.
Added
Audit Committee We have a separate-designed standing Audit Committee established in accordance with section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Audit Committee operates under a written charter, which is available on our website at https://ireei-global.net . The information on our corporate website is not a part of this Proxy Statement.
Added
Kelly Cowan was a member of the Audit Committee prior to her resignation from the Board on March 16, 2023. Compensation Committee The Compensation Committee operates under a written charter, which is available on our website at https://www.epicquesteducation.com/investor-relations/governance/governance-documents.html.
Added
Kelly Cowan was a member of the Compensation Committee prior to her resignation from the Board on March 16, 2023. Nominating Committee The Nominating Committee operates under a written charter, which is available on our website at https://www.epicquesteducation.com/investor-relations/governance/governance-documents.html .
Added
Disclosure of a registrant’s action to recover erroneously awarded compensation The Company, during or after the last completed fiscal year, was not required to prepare an accounting restatement that required recovery of erroneously awarded compensation.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

10 edited+10 added−9 removed1 unchanged
The number of individual holders of record is based exclusively upon our share register and does not address whether a share or shares may be held by the holder of record on behalf of more than one person or institution who may be deemed to be the beneficial owner of a share or shares in our company. B.
The number of individual holders of record is based exclusively upon our share register and does not address whether a share or shares may be held by the holder of record on behalf of more than one person or institution who may be deemed to be the beneficial owner of a share or shares in our company.
(1) Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the common shares or the power to receive the economic benefit of the common shares. (2) Independent director.
(1) Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the common shares or the power to receive the economic benefit of the common shares.
None of the stockholders listed in the table are a broker-dealer or an affiliate of a broker dealer. None of the stockholders listed in the table are located in the United States and none of the common shares held by them are located in the United States.
None of the shareholders listed in the table are a broker-dealer or an affiliate of a broker dealer. With the exception of Mr. Pratt, none of the shareholders listed in the table are located in the United States and none of the common shares held by them are located in the United States.
Applicable percentage ownership is based on 11,439,206 common shares outstanding as of December 31, 2022. Unless otherwise indicated, the address of each beneficial owner listed in the table below is to the Company c/o 1209 N. University Blvd, Middletown, OH 45042.
Applicable percentage ownership is based on 12,702,173 common shares outstanding as of January 25, 2024. Unless otherwise indicated, the address of each beneficial owner listed in the table below is to the Company c/o 1209 N.
Michael Pratt (2) 12,825 * Kelly Cowan (2) 12,825 * All directors and executive officers as a group (8 persons) 2,935,157 25.41 % 5% or greater beneficial owners as a group Wonderland Holdings International Limited (3) 5,159,700 45.11 % * Less than 1%.
Michael Pratt (10) 26,400 * Xiaojun Cui (11) -- * All directors and executive officers as a group (8 persons) (12) 9,122,182 71.82 % 5% or greater beneficial owners as a group Wonderland Holdings International Limited (3) 5,159,700 40.62 % * Less than 1%.
Related Party Transactions The following is a description of transactions since September 30, 2019, to which any of our related parties, had or will have a direct or indirect material interest. Name of related parties Relationship with the Company Jianbo Zhang Founder, CEO and ultimate controlling shareholder of the Company.
All of the Company’s shareholders have the same voting rights. B. Related Party Transactions The following is a description of transactions since September 30, 2019, to which any of our related parties, had or will have a direct or indirect material interest.
Amount of Beneficial Ownership (1) Name of Beneficial Owner Common shares Percentage Jianbo Zhang, CEO (3)(4) 6,967,416 60.64 % Zhenyu Wu, CFO (5) 666,900 5.81 % Yunxia Xu, COO & CMO (6) 258,000 2.25 % Jing Li, CDO (7) 79,000 * Bo Yu, CPO (7) 82,500 * Craig Wilson (2) 15,391 * G.
University Blvd, Middletown, OH 45042. 48 Amount of Beneficial Ownership (1) Name of Beneficial Owner (2) Common shares Percentage Jianbo Zhang, CEO (3)(4) 7,517,416 59.18 % Zhenyu Wu, CFO (5) 1,031,900 8.12 % Yunxia Xu, COO & CMO (6) 338,000 2.66 % Jing Li, CDO (7) 89,000 * Bo Yu, CPO (8) 92,500 * Craig Wilson (9) 28,966 * G.
Due to related party balance The related party balances of $140,000 as of September 30, 2022 and 2021 relate to IPO costs paid by Jianbo Zhang on behalf of the Company. The related party balance is unsecured, non-interest bearing and due on demand. C. Interests of Experts and Counsel Not required.
Name of related parties Relationship with the Company Jianbo Zhang Founder, CEO and ultimate controlling shareholder of the Company. Due to related party balance The related party balances of $140,000 as of September 30, 2023, 2022 and 2021 relate to IPO costs paid by Jianbo Zhang on behalf of the Company.
(3) A BVI incorporated entity with the mailing address of c/o No. 36, Daxing Hutong, Fongcheng District, Beijing City, PRC.
(2) Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o EpicQuest Education Group International Limited, 1209 N. University Blvd. Middletown. (3) A BVI incorporated entity with the mailing address of c/o No. 36, Daxing Hutong, Fongcheng District, Beijing City, PRC.
Major shareholders The following tables set forth certain information with respect to the beneficial ownership of our common shares for: ● each stockholder known by us to be the beneficial owner of more than 5% of our outstanding common shares; ● each of our directors; ● each of our named executive officers; and ● all of our directors and executive officers as a group.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major shareholders The following table sets forth certain information regarding beneficial ownership of our shares by each person who is known by us to beneficially own more than 5% of our shares.
Removed
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A.
Added
The table also identifies the share ownership of each of our directors, each of our executive officers, and all directors and officers as a group. Except as otherwise indicated, the shareholders listed in the table have sole voting and investment powers with respect to the shares indicated.
Removed
We have determined beneficial ownership in accordance with the rules of the SEC.
Added
Our major shareholders do not have different voting rights than any other holder of our shares.
Removed
Under such rules, beneficial ownership includes any shares over which the individual has sole or shared voting power or investment power as well as any shares that the individual has the right to subscribe for within 60 days of December 31, 2022 through the exercise of any warrants or other rights.
Added
Beneficial ownership is determined in accordance with the rules of the SEC, which generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities and includes our common shares issuable pursuant to the exercise of stock options, warrants, or other securities that are immediately exercisable or convertible or exercisable or convertible within 60 days of January 25, 2024.
Removed
Does not include an RSU grant for 15,575 common shares granted to each independent director on December 30, 2022, and vesting upon the earlier of the first anniversary after the date of the grant or the date of the Company’s next annual meeting of stockholders, subject to the director’s continued service on the Board of Directors on such vesting date.
Added
As Jianbo Zhang is the sole shareholder and director of the entity, he is deemed the beneficial owner of the Company’s securities held by Wonderland Holdings.
Removed
As Jianbo Zhang is the sole shareholder and director of the entity, he is deemed the beneficial owner of the Company’s securities held by Wonderland Holdings. 46 (4) Includes 50,000 vested RSUs for common shares approved on December 30, 2022 (out of a total approved award of 200,000 RSUs), and does not include 150,000 unvested RSUs for common shares from the same award, which was made under the 2019 Equity Incentive Plan, that vest in three equal installments on the last calendar day of each of the last three full fiscal quarters.
Added
(4) Consists of 2,057,716 common shares directly held by Jianbo Zhang, 50,000 shares issued on December 31, 2023, 250,000 common shares underlying stock options exercisable within 60 days of January 25, 2024, and 5,159,700 common shares directly held by Wonderland Holdings International of which Mr. Zhang is deemed to be the beneficial owner.
Removed
(5) Includes 40,000 vested RSUs for common shares approved on December 30, 2022 (out of a total approved award of 160,000 RSUs), and does not include 120,000 unvested RSUs for common shares from the same award, which was made under the 2019 Equity Incentive Plan, that vest in three equal installments on the last calendar day of each of the last three full fiscal quarters.
Added
(5) Consists of 786,900 common shares directly held by Zhenyu Wu, 40,000 shares issued on December 31, 2023, and 205,000 common shares underlying stock options exercisable within 60 days of January 25, 2024. (6) Consists of 323,000 common shares directly held by Yunxia Xu, and 15,000 shares issued on December 31, 2023.
Removed
(6) Includes 15,000 vested RSUs for common shares approved on December 30, 2022 (out of a total approved award of 60,000 RSUs), and does not include 45,000 unvested RSUs for common shares from the same award, which was made under the 2019 Equity Incentive Plan, that vest in three equal installments on the last calendar day of each of the last three full fiscal quarters.
Added
(7) Consists of 86,500 common shares directly held by Jing Li, and 2,500 shares issued on December 31, 2023. (8) Consists of 90,000 common shares directly held by Bo Yu, and 2,500 sharesissued on December 31, 2023. (9) Consists of 28,966 common shares directly held by Craig Wilson. (10) Consists of 26,400 common shares directly held by G. Michael Pratt.
Removed
(7) Includes 2,500 vested RSUs for common shares approved on December 30, 2022 (out of a total approved award of 10,000 RSUs), and does not include 7,500 unvested RSUs for common shares from the same award, which was made under the 2019 Equity Incentive Plan, that vest in three equal installments on the last calendar day of each of the last three full fiscal quarters.
Added
(11) Xiaojun Cui does not currently own any common shares of the Company.
Removed
As of December 31, 2022, there were 39 holders of record entered in our share register, of which 7 holders were U.S. residents.
Added
(12) Does not include 5,159,700 common shares held by Wonderland Holdings International Limited described in footnote 3. 49 As of January 25, 2024, there were 36 holders of record (excluding the beneficial shareholders held through the intermediaries) entered in our share register, of which 4 holders were U.S. residents.
Added
The related party balance is unsecured, non-interest bearing and due on demand. C. Interests of Experts and Counsel Not required.

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