Document And Entity Information
Document And Entity Information - shares | 12 Months Ended | |
Sep. 30, 2021 | Dec. 23, 2021 | |
Document Information Line Items | ||
Entity Registrant Name | Elite Education Group International Limited | |
Trading Symbol | EEIQ | |
Document Type | 20-F | |
Current Fiscal Year End Date | --09-30 | |
Entity Common Stock, Shares Outstanding | 10,915,313 | |
Amendment Flag | false | |
Entity Central Index Key | 0001781397 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Well-known Seasoned Issuer | No | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | FY | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Document Registration Statement | false | |
Document Annual Report | true | |
Document Transition Report | false | |
Document Shell Company Report | false | |
Entity File Number | 001-40280 | |
Entity Address, Country | VG | |
Entity Address, Address Line One | 1209 N. University Blvd | |
Entity Address, City or Town | Middletown | |
Entity Incorporation, State or Country Code | OH | |
Entity Address, Postal Zip Code | 45042 | |
Title of 12(b) Security | Common Stock, $0.016 par value per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
Document Accounting Standard | U.S. GAAP | |
Business Contact | ||
Document Information Line Items | ||
Entity Address, Address Line One | 1209 N. University Blvd | |
Entity Address, City or Town | Middletown | |
Entity Address, Postal Zip Code | 45042 | |
Contact Personnel Name | Jianbo Zhang, CEO | |
Entity Address, State or Province | OH | |
City Area Code | +1(513) | |
Local Phone Number | 649-8350 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 16,537,174 | $ 7,407,990 |
Accounts receivables | 154,537 | 149,361 |
Prepaid expenses | 1,560,847 | 1,632,647 |
Deferred IPO costs | 783,889 | |
Notes receivable | 180,000 | |
Income tax receivable | 1,149,506 | 668,639 |
Total current assets | 19,582,064 | 10,642,526 |
Non-current assets | ||
Property and equipment, net | 3,479,922 | 3,120,564 |
Long term prepaid expenses | 159,382 | |
Deferred income tax assets | 321,057 | |
Note receivable | 280,000 | |
Right-of-use assets | 626,596 | |
Total assets | 24,009,639 | 14,202,472 |
Current liabilities | ||
Accounts payable and other liabilities | 2,960,915 | 1,976,668 |
Student deposits | 681,818 | 994,940 |
Due to related party | 140,000 | 140,000 |
Lease liabilities – current | 259,297 | |
Deferred revenue | 4,569,664 | 3,608,237 |
Total current liabilities | 8,611,694 | 6,719,845 |
Non-current liabilities | ||
Lease liabilities – non current | 461,997 | |
Total liabilities | 9,073,691 | 6,719,845 |
Commitments and contingencies | ||
Shareholders’ equity | ||
Common shares, US$0.0015873 par value, 31,500,000 shares authorized, 10,412,843 and 7,938,000 shares issued and outstanding as of September 30, 2021 and 2020, respectively | 16,528 | 12,600 |
Additional paid-in capital | 11,464,979 | 2,731,273 |
Subscription receivable | (200,000) | |
Retained earnings | 3,654,441 | 4,738,754 |
Total shareholders’ equity | 14,935,948 | 7,482,627 |
Total liabilities and shareholders’ equity | $ 24,009,639 | $ 14,202,472 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2021 | Sep. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock par value (in Dollars per share) | $ 0.0015873 | $ 0.0015873 |
Common stock, shares authorized | 31,500,000 | 31,500,000 |
Common stock, shares issued | 10,412,843 | 7,938,000 |
Common stock, shares outstanding | 10,412,843 | 7,938,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | |||
Revenues | $ 5,341,850 | $ 9,063,137 | $ 8,700,332 |
Costs of services | 1,934,237 | 2,342,276 | 2,228,307 |
Gross profit | 3,407,613 | 6,720,861 | 6,472,025 |
Operating costs and expenses: | |||
Selling expenses | 1,732,758 | 2,310,188 | 1,965,102 |
General and administrative | 3,148,256 | 3,115,120 | 1,863,290 |
Total operating costs and expenses | 4,881,014 | 5,425,308 | 3,828,392 |
Income (loss) from operations | (1,473,401) | 1,295,553 | 2,643,633 |
Other (income) expenses: | |||
Other income | (71,640) | (55,000) | |
Interest income | (9,537) | (35,293) | (79,921) |
Foreign exchange gain | (743) | (23,262) | |
Total other (income) expenses | (81,920) | (113,555) | (79,921) |
Income (loss) before provision for income taxes | (1,391,481) | 1,409,108 | 2,723,554 |
Current income tax expense | 13,889 | 397,553 | 572,082 |
Deferred income tax expense (recovery) | (321,057) | 96,714 | |
Income taxes expense | (307,168) | 397,553 | 668,796 |
Net income | (1,084,313) | 1,011,555 | 2,054,758 |
Comprehensive income (loss) | $ (1,084,313) | $ 1,011,555 | $ 2,054,758 |
Basic & diluted net income (loss) per share (in Dollars per share) | $ (0.12) | $ 0.13 | $ 0.26 |
Weighted average number of ordinary shares-basic and diluted (in Shares) | 9,160,447 | 7,938,000 | 7,938,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders’ Equity - USD ($) | Common shares | Additional paid-in capital | Subscription receivable | Retained earnings | Total |
Balance at Sep. 30, 2018 | $ 12,600 | $ 2,731,273 | $ 1,672,441 | $ 4,416,314 | |
Balance (in Shares) at Sep. 30, 2018 | 7,938,000 | ||||
Net income | 2,054,758 | 2,054,758 | |||
Balance at Sep. 30, 2019 | $ 12,600 | 2,731,273 | 3,727,199 | 6,471,072 | |
Balance (in Shares) at Sep. 30, 2019 | 7,938,000 | ||||
Net income | 1,011,555 | 1,011,555 | |||
Balance at Sep. 30, 2020 | $ 12,600 | 2,731,273 | 4,738,754 | 7,482,627 | |
Balance (in Shares) at Sep. 30, 2020 | 7,938,000 | ||||
Net income | (1,084,313) | (1,084,313) | |||
Share issues – transaction costs | $ 3,928 | 8,733,706 | (200,000) | 8,537,634 | |
Share issues – transaction costs (in Shares) | 2,474,843 | ||||
Balance at Sep. 30, 2021 | $ 16,528 | $ 11,464,979 | $ (200,000) | $ 3,654,441 | $ 14,935,948 |
Balance (in Shares) at Sep. 30, 2021 | 10,412,843 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Cash Flows from Operating Activities: | |||
Net income | $ (1,084,313) | $ 1,011,555 | $ 2,054,758 |
Adjustments for items not affecting cash: | |||
Depreciation and amortization | 126,234 | 87,593 | 91,814 |
Non-cash lease expenses | 94,698 | ||
Deferred income tax expense | (321,057) | 96,714 | |
Gain from disposal of fixed assets | (4,000) | ||
Changes in operating assets and liabilities | |||
Accounts receivable | (5,176) | 89,521 | (207,602) |
Prepaid expenses | 71,800 | 428,592 | (384,997) |
Long-term prepaid expenses | 159,382 | 584,356 | 547,487 |
Accounts payable & accrued liabilities | 1,117,184 | 545,606 | 849,228 |
Deferred revenue | 961,426 | (3,221,807) | 1,210,943 |
Income tax receivable | (480,866) | (664,399) | |
Student deposits | (313,122) | 994,940 | 411,354 |
Net cash provided from (used in) operating activities | 322,190 | (144,043) | 4,669,699 |
Cash Flows from Investing Activities: | |||
Purchase of property and equipment | (618,529) | (288,555) | (203,172) |
Notes receivable | 100,000 | ||
Proceeds from sale of fixed assets | 4,000 | ||
Net cash used in investing activities | (514,529) | (288,555) | (203,172) |
Cash Flows from Financing Activities: | |||
Amount advanced from related parties | 140,000 | ||
Deferred costs related to initial public offering | (432,035) | (351,854) | |
Share issuances, net of issuance costs | 9,321,523 | ||
Net cash provided from (used in) financing activities | 9,321,523 | (432,035) | (211,854) |
Net increase/(decrease) in cash, cash equivalents and restricted cash | 9,129,184 | (864,633) | 4,254,673 |
Cash and cash equivalents, beginning of period | 7,407,990 | 8,272,623 | 4,017,950 |
Cash and cash equivalents, end of period | 16,537,174 | 7,407,990 | 8,272,623 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | |||
Interest paid | |||
Income taxes paid | $ 490,250 | $ 1,053,360 | $ 160,728 |
Organization and principal acti
Organization and principal activities | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Organization and principal activities | 1. Organization and principal activities The Company was incorporated in the British Virgin Island (“BVI”) on December 13, 2017. The Company principally engages in the business of foreign language educations. The Company’s revenue is primarily derived from foreign education programs and student accommodation services. |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | 2. Summary of significant accounting policies Basis of presentation The consolidated financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Principal of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. Principal activities Percentage Date of Place of Elite Education International Co., Ltd (the “Company”) Investment holding — December 13, 2017 BVI Quest Holdings International LLC (“QHI”) Foreign education programs and student dormitory services 100 % December 19, 2012 Ohio, US Miami International Education Center LLC (“MIE”) Collection of tuition payments from oversea students 100 % January 23, 2017 Ohio, US Highrim Holding International Limited (“HHI”) Investing holding 100 % July 9, 2021 BC, Canada Use of estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Actual amounts could differ from those estimates and differences could be material. Changes in estimates are recorded in the period they are identified. There were no significant accounting estimates reflected in the Company’s consolidated financial statements. Foreign currency and foreign currency translation The Company’s reporting currency is the United States dollar (“US$”). The US$ is the functional currency of the Company and all of its subsidiaries. Transactions denominated in other than the functional currencies are re-measured into the functional currency of the entity at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional currency at the prevailing rates of exchange at the balance date. The resulting exchange differences are reported in the consolidated statements of operations and comprehensive income. Certain risks and concentration The Company’s financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and notes receivable. As of September 30, 2021 and 2020, substantially all of the Company’s cash and cash equivalents were held in major financial institutions located in the US. The Company does not have trades receivable related to students as they are required to prepay service fees. Accounts receivable at September 30, 2021 primarily consist of receivable of $82,500 in relation to student recruitment services that the Company performed for third parties and interest receivable of $70,000 related to a note receivable. The remaining $180,000 note receivable balance as at September 30, 2021 is related to a third party borrower. Although the Company is directly affected by the financial conditions of the borrower, the Company does not believe significant credit risk exist since the borrower is also the Company’s student recruitment agent who charges the Company recruitment commission fees for its services. The Company can delay or withhold its payments of recruitment commission fees to the recruitment agent borrower to mitigate the credit risk. Subsequent to September 30, 2021, the Company has collected $180,000 of the note receivable from the borrower. Therefore, there was no significant concentration risk for the Company as at September 30, 2021 and 2020. Cash and cash equivalents Cash and cash equivalents consist of petty cash on hand and cash held in banks, which are highly liquid and have original maturities of three months or less and are unrestricted as to withdrawal or use. Revenue recognition The Company adopted ASC 606 for its fiscal year beginning on October 1, 2020 using the modified retrospective approach. There were no material unfinished contracts with customers on the adoption date of ASC 606. Prior to the adoption of ASC 606, under ASC 605, the basic criteria necessary for revenue recognition were: (i) Persuasive evidence of an arrangement exists, (ii) Delivery has occurred or services have been rendered (iii) The selling price is fixed or determinable, and (iv) Collectability is reasonably assured. ASC 606 provides for a five-step model for recognizing revenue from contracts with customers. These five steps include: (i) Identify the contract (ii) Identify performance obligations (iii) Determine transaction price (iv) Allocate transaction price (v) Recognize revenue Under ASC 606, revenue is recognized when the customer obtains control of a good or service. A customer obtains control of a good or service if it has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. The Company’s revenue streams contain two primary performance obligations, which are the: i) English education programs; and ii) the accommodation services. The transfer of control of the Company’s English education programs occurs over time upon the delivery of the services to the students based on the terms of the semester. Similar, the transfer of the accommodation services occurs over time as the students receive the benefits of the accommodation services based on the terms of the semester. Therefore, revenues for English education programs and accommodation services are both recognized over time as the students simultaneously receive the services and consume the benefits provided by the Company’s performance of the services. Funds received from student prior to provision of our education and accommodation services are recognized as deferred revenue. The deferred revenue is subsequently released into revenue once the registered semester starts and is released using straight-line method based on the semester period, which is generally three months. The release of the deferred revenue is to match the timing of the cost of our services, which is generally also based on the semester term. Costs of services Costs of services are primarily comprised of the tuition fees paid to our partnered education institution, Miami University (“MU”), for the provision of our English language programs and fees paid to a third-party university located in China for using its facility to hold our MU English language programs online due to Covid-19 travel restrictions. These fees are recognized into costs of services when such fees are incurred based on semester terms in direct relation to MU’s conducting of the English language education services for us. Fair value measurement Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value as follows: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Observable, market-based inputs, other than quoted prices, in active markets for identical assets or liabilities. Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company’s financial instruments include cash and cash equivalents, accounts receivable, notes receivables, accounts payable and accrued liabilities and taxes payable. The carrying amounts of cash and cash equivalents, accounts receivable, note receivable, accounts payable and accrued liabilities and due to related party approximate their fair values due to the short-term nature of these instruments. For lease liabilities, fair value approximates their carrying value at the year-end as the interest rates used to discount the host contracts approximate market rates. The Company noted no transfers between levels during any of the periods presented. The Company did not have any instruments that were measured at fair value on a recurring nor non-recurring basis as of September 30, 2021 and 2020. Property and equipment Property and equipment are recorded at cost, less accumulated depreciation and impairment. Depreciation of property and equipment is calculated on a straight-line basis, after consideration of expected useful lives and estimated residual values. The estimated annual deprecation rate of these assets are generally as follows: Category Depreciation Estimated Buildings 33 to 39 $Nil Machinery & equipment 3 $Nil Vehicles 5 $Nil Furniture and fixtures 7 $Nil Software 5 $Nil Expenditures for maintenance and repairs are expensed as incurred. Gains and losses on disposals are the differences between net sales proceeds and carrying amount of the relevant assets and are recognized in the consolidated statements of operations and comprehensive income. Leases The Company adopted ASC 842 – Leases The Company determines if an arrangement is a lease at inception. The Company may have lease agreements with lease and non-lease components, which are generally accounted for separately. Leases are classified as either operating leases or finance leases pursuant to ASC 842. i) Operating leases Operating leases are recognized as right-of-use assets (“ROU”) in non-current assets and lease liabilities in non-current liabilities in the consolidated balance sheets if the initial lease term is greater than 12 months. For leases with an initial term of 12 months or less the Company recognizes those lease payments on a straight-line basis over the lease term. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, management uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Management uses the implicit rate when readily determinable. Lease expense for lease payments is recognized on a straight-line basis over the lease term and are included in general and administrative (“G&A”) expenses. ii) Finance leases Finance lease ROU assets are included in property, plant and equipment, trade and other payables, and other non-current liabilities in the consolidated balance sheets. Finance lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, management uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Management uses the implicit rate when readily determinable. Finance lease ROU assets are generally amortized over the lease term and are included in depreciation expense. The interest on the finance lease liabilities is included in interest expense. Impairment of long-lived assets The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amounts to the expected future undiscounted cash flows attributable to these assets. If it is determined that an asset is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the assets exceeds the expected discounted cash flows arising from those assets. There were no impairment losses for the years ended September 30, 2021 and 2020. Taxation Current income taxes are provided on the basis of net profit for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are recognized for temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements, net operating loss carry forwards and credits. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in which temporary differences are expected to be reversed or settled. The effect on deferred tax assets and liabilities of changes in tax rates is recognized in the statement of operation and comprehensive income in the period of the enactment of the change. The Company considers positive and negative evidence when determining whether a portion or all of its deferred tax assets will more likely than not be realized. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry-forward periods, its experience with tax attributes expiring unused, and its tax planning strategies. The ultimate realization of deferred tax assets is dependent upon its ability to generate sufficient future taxable income within the carry-forward periods provided for in the tax law and during the periods in which the temporary differences become deductible. When assessing the realization of deferred tax assets, the Company has considered possible sources of taxable income including (i) future reversals of existing taxable temporary differences, (ii) future taxable income exclusive of reversing temporary differences and carry-forwards, (iii) future taxable income arising from implementing tax planning strategies, and (iv) specific known trend of profits expected to be reflected within the industry. The Company recognizes a tax benefit associated with an uncertain tax position when, in its judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority. For a tax position that meets the more-likely-than-not recognition threshold, the Company initially and subsequently measures the tax benefit as the largest amount that the Company judges to have a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority. The Company’s liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances, such as the progress of tax audits, case law developments and new or emerging legislation. Such adjustments are recognized entirely in the period in which they are identified. The Company’s effective tax rate includes the net impact of changes in the liability for unrecognized tax benefits and subsequent adjustments as considered appropriate by management. The Company classifies interest and penalties recognized on the liability for unrecognized tax benefits as income tax expense. Earnings per share Basic earnings per share is computed by dividing net income attributable to shareholders by the weighted average number of common shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between common shares and other participating securities based on their participating rights. Net loss is not allocated to other participating securities if based on their contractual terms they are not obligated to share in the losses. Diluted earnings per share is calculated by dividing net income attributable to common shareholders by the weighted average number of common and dilutive common equivalent shares outstanding during the period. Common equivalent shares are not included in the denominator of the diluted loss per share calculation when inclusion of such shares would be anti-dilutive. Defined contribution plans The Company contributes to defined contribution retirement schemes which are available to all employees. Contributions to the schemes by the Company and employees are calculated as a percentage of employees’ basic salaries. The retirement benefit scheme cost charged to profit or loss represents contributions payable by the Company to the funds. Recently issued accounting standards Effective October 1, 2020, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which clarifies the principles of recognizing revenue and create common revenue recognition guidance between U.S. GAAP and International Financial Reporting Standards (“IFRS”). The adoption of the new standard did not have material adjustment to the Company’s consolidated financial statements. Effective October 1, 2020, the Company adopted ASU 2016-02, Leases (Topic 842). The Company adopted the new standard utilizing the “optional transition method”, which permits the Company to apply the new lease standard at the adoption date. As the optional transition method is being utilized, the Company’s reporting for the comparative periods presented in the financial statements in which it adopts Topic 842 will continue to be reported pursuant to Topic 840. On adoption, the Company elected to utilize the package of practical expedients permitted within the new standard, which among other things, allows the Company to carryforward the historical lease classification. The Company also elected not to recognize the lease assets and liabilities for leases with an initial term of 12 months or less and will recognize those lease payments on a straight-line basis over the lease term. On adoption of the new standard the Company recognized ROU assets of $799,760 with a corresponding increase in operating lease liability. There was no impact on retained earnings or cash flows. Effective October 1, 2020, the Company adopted ASU 2016-13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which a Group recognizes an allowance based on the estimate of expected credit loss. The adoption of the new standard did not have material adjustment to the Company’s consolidated financial statements. Effective October 1, 2020, the Company adopted ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 provides guidance for targeted changes with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. The ASU provides guidance on eight specific cash flow issues: i. Debt Prepayment or Debt Extinguishment Costs; ii. Settlement of Zero-Coupon Debt Instruments or Other Debt Instruments with Coupon Interest Rates That Are Insignificant in Relation to the Effective Interest Rate of the Borrowing; iii. Contingent Consideration Payments Made after a Business Combination; iv. Proceeds from the Settlement of Insurance Claims; v. Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, including Bank-Owned Life Insurance Policies; vi. Distributions Received from Equity Method Investees; vii. Beneficial Interests in Securitization Transactions; and viii. Separately Identifiable Cash Flows and Application of the Predominance Principle The adoption of the Company ASU 2016-15 did not have material adjustments to the Company’s consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for scope exception, and it simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for public business entities that meet the definition of an SEC filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows. |
Prepaid Expenses
Prepaid Expenses | 12 Months Ended |
Sep. 30, 2021 | |
Prepaid And Other Assets Current Disclosure [Abstract] | |
Prepaid Expenses | 3 Prepaid Expenses Prepaid expenses consist of the following: September 30, September 30, US$ US$ Prepaid recruitment fees 159,883 762,367 Prepaid tuition fees to Miami University 550,613 534,791 Prepaid fees to Renda for Beijing office expenses 558,356 - Prepaid fees to Dongbei University of Finance and Economics 181,829 220,621 Prepaid insurance 39,448 44,150 Other prepaid expenses 70,718 70,718 Total 1,560,847 1,632,647 Prepaid recruitment fees represent the prepaid student recruitment fees to agents who help the Company promote and recruit students to enroll in the English education programs offered by the Company. The prepaid expenses are deferred as they represent payments for future services to be rendered by our service agents and future economic benefits to the Company are anticipated. Prepaid tuition fees represent the tuition fees that the Company prepaid to Miami University for services have yet to be provided by Miami University. The prepaid tuition fees will be recognized into costs of services when such fees are incurred based on semester terms in direct relation to Miami University’s conducting of the English language education services for us. Prepaid fees to Renda for Beijing office expenses represent the fees that the Company prepaid to Beijing Renda Finance and Education Technology Co., Ltd (“Renda”) for services have yet to be provided by Renda. The prepaid tuition fees will be recognized into costs of services when such fees are incurred based on the actual costs incurred by Renda on behalf of the Company’s Beijing office. Prepaid fees Dongbei University of Finance and Economics (“DUFE”) represent fees that the Company paid to DUFE, a university in China, for using DUFE’s facilities, including student dormitories, to host remote online English education programs and provide accommodation to students during their studies. Due to the impacts from the Covid-19 pandemic, a majority of the Company’s students were unable to travel to US to physically attend the in-class programs. Therefore, the Company entered into an agreement with DUFE to use DUFE’s facilities to continue its English education programs in China using online conferences with the Miami University. |
Deferred Costs
Deferred Costs | 12 Months Ended |
Sep. 30, 2021 | |
Deferred Costs Disclosure [Abstract] | |
Deferred costs | 4. Deferred costs Deferred costs as of September 30, 2020 represented the incremental costs incurred for the Company’s initial public offering (“IPO”). These costs primary include specific legal costs, accounting costs and professional consulting costs. These costs were charged against the gross proceeds of the IPO during the year ended September 30, 2021 upon the Company’s completion of its IPO on March 30, 2021. |
Long Term Prepaid Expenses
Long Term Prepaid Expenses | 12 Months Ended |
Sep. 30, 2021 | |
Long Term Prepaid Expenses [Abstract] | |
Long Term Prepaid Expenses | 5. Long Term Prepaid Expenses Long term prepaid expenses represent the long-term portion of the prepaid student recruitment fees to agents for their long-term recruitment services. |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | 6. Property and Equipment, net Property and equipment, net consist of the following: September 30, September 30, US$ US$ Land 1,007,273 1,007,273 Buildings 2,131,945 2,113,415 Machinery & equipment 84,542 84,542 Vehicles 127,997 156,175 Furniture and fixtures 71,301 71,301 Software 698,000 230,938 Total 4,121,058 3,663,644 Less: Accumulated depreciation $ (641,136 ) $ (543,080 ) Property and equipment, net 3,479,922 3,120,564 Depreciation expenses was recorded in general and administrative expense. The Company recorded depreciation expenses of US$126,234 and US$87,593 for the year ended September 30, 2021 and 2020, respectively. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 12 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | 7. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities primarily consist of the following: September 30, September 30, US$ US$ Accounts payable 148,761 51,774 Rent payables - - Student refundable deposits 2,096,073 1,151,473 Accrued commission expenses 233,528 152,821 Salary payables - 225,910 Other payables 482,553 394,690 Total 2,960,915 1,976,668 |
Student Deposits
Student Deposits | 12 Months Ended |
Sep. 30, 2021 | |
Student Deposits Disclosure [Abstract] | |
Student Deposits | 8. Student Deposits Student deposits represented application deposits and dormitory fees prepaid by students during the years ended September 30, 2021 and 2020. These student deposits historically were not refundable under normal circumstances. Due to the impacts of the Covid-19 pandemic, the Company has adjusted the policy to provide refunds to prospective students who decide to withdraw their applications and to admitted students who decide to take online courses at home. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes BVI Under the current laws of the BVI, the Company is not subject to tax on income or capital gain. 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 and MIE, are subject to the Ohio state’s Commercial Activity Tax (“CAT”) and federal income tax. 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% for the calendar year of 2021 (2020: 21%). The Company’s provision for income taxes consists of the following: September 30, September 30, September 30, US$ US$ US$ Current 13,889 397,553 572,082 Deferred (321,057 ) - 96,714 Total income tax (recovery) (307,168 ) 397,553 668,796 Reconciliation of the differences between statutory tax rate and the effective tax rate The Company operates in serval tax jurisdictions. Therefore, its income is subject to various rates of taxation. The income tax expense differs from the amount that would have resulted from applying the BVI statutory income tax rates to the Company’s pre-tax income as follows: September 30, September 30, September 30, US$ US$ US$ Income before income tax expenses 1,391,481 1,409,108 2,723,554 BVI statutory income tax rate - % - % - % Income tax calculated at statutory rate - - - (Increase) decrease in income tax expense resulting from: Rate differences in various jurisdictions 13,889 397,553 668,796 Utilization of loss carryforward - - (96,714 ) Change in deferred income tax assets due to US reform - - - Change in deferred income tax assets due to use of loss carryforward (321,057 ) - 96,714 Income tax expense/Effective tax rate (307,168 ) 397,553 668,796 Income tax receivable balance as of September 30, 2021 represents amount the Company expects to receive due to the Company overpayment of its income taxes for the current year and overpayments of income taxes for its previous fiscal years as well as a result of the Company’s change of its tax fiscal yearend from December 31 to match its accounting fiscal yearend of September 30. Uncertain tax positions The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of September 30, 2021 and 2020, the Company did not have any significant unrecognized uncertain tax positions. |
Ordinary Shares
Ordinary Shares | 12 Months Ended |
Sep. 30, 2021 | |
Ordinary Shares Disclosure [Abstract] | |
Ordinary Shares | 10. Ordinary Shares The Company’s ordinary share’s par value is US$0.001 and is authorized to issue 50,000,000 shares and 12,600,000 shares had been issued and outstanding as of September 30, 2020. On October 27, 2020, the Company executed a 1-for-0.63 reverse stock split. As a result of the stock split, the number of authorized shares to be issued becomes 31,500,000 and the issued and outstanding shares becomes 7,938,000 shares as of September 30, 2020. During the year ended September 30, 2021, the Company issued 2,474,843 common shares in relation to its IPO and warrant exercises (“Equity Transactions”). The net proceeds from the Equity Transactions were US$8,737,634. Of the amount, $200,000 is held in the escrow trust account of the Company’s transfer agent for the purposes of clearing out any potential unsettled IPO costs. The $200,000 will be held in the escrow trust account for a period of 18 months from the IPO completion date. This amount was recognized as subscription receivable as of September 30, 2021. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per share | 11. Earnings per share Basic and diluted net earnings per share for each of the years presented are calculated as follows: September 30, September 30, September 30, US$ US$ US$ Numerator: Net Income (loss) attributable to ordinary shareholders—basic and diluted (1,084,313 ) 1,011,555 2,054,758 Denominator: Weighted average number of ordinary shares outstanding—basic and diluted 9,160,447 7,938,000 7,938,000 Earning (loss) per share attributable to ordinary shareholders—basic and diluted (0.12 ) 0.13 0.26 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Other than a residential apartment building lease with a lease term of 5 years that the Company entered into during 2019 as below, the Company did not have significant commitments, long-term obligations, or guarantees as of September 30, 2021 and 2020. Operating lease The future aggregate minimum lease payments under the non-cancellable residential apartment building operating lease are as follows: 2022 $ 269,248 2023 274,633 2024 256,355 Total future minimum lease payments $ 800,236 Less: imputed interest (78,942 ) Total operating lease liability $ 721,294 Less: operating lease liability - current 259,297 Total operating lease liability – non current $ 461,997 Contingencies The Company is subject to legal proceedings and regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted with certainty, but the Company does not anticipate that the final outcome arising out of any such matter will have a material adverse effect on our consolidated business, financial position, cash flows or results of operations taken as a whole. As of September 30, 2021, the Company is not a party to any material legal or administrative proceedings. |
Related Party Transactions and
Related Party Transactions and Balances | 12 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Balances | 13. Related Party Transactions and Balances Related Parties Name of related parties Relationship with the Company Jianbo Zhang Founder and ultimate controlling shareholder, CEO Beijing Renda Finance and Education Technology Co., Ltd (“Renda”) A company controlled by the founder and ultimate controlling shareholder, CEO from March 23, 3009 to April 26, 2018 Jinan Wanze Education Information Consulting Co., Ltd. (“Jinan Wanze”) A company controlled by the founder and ultimate controlling shareholder, CEO from May 10, 2011 to July 26, 2018 Due to related party balance The related party balances of $140,000 as of September 30, 2021 and 2020 relate to IPO costs paid by Jianbo Zhang on behalf of the Company. The due to related party balance is unsecured, non-interest bearing and due on demand. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events The Company has evaluated the impact of events that have occurred subsequent to September 30, 2021, through the date the consolidated financial statements were available to issue, and concluded that no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the notes to the consolidated financial statements, except as follow: ● On October 13, 2021, the Company’s subsidiary, MIE, changed its name to Quest International Education Center LLC. ● On November 1, 2021, the Company awarded a total of 300,857 shares to its directors, officers, and other employees. ● On November 17, 2021, the Company disposed of one of its buildings located in Middletown Ohio to an arm’s length party for gross proceeds of $2,000,000. ● On November 24, 2021, Elite Education Group International Limited (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”). Pursuant to the Stock Purchase Agreement and Subscription Agreement, which were consummated on November 26, 2021, the Company acquired 70% of the equity of Ameri-Can and 77.78% of the voting equity of Ameri-Can for an aggregate purchase price of: (i) $1.25 million in cash and the issuance of 201,613 shares of Company common stock (the “Purchaser Shares”) to the Sellers; and (ii) $2.5 million in cash to Ameri-Can. 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. Prior to the expiration of the foregoing six-month period, each such Seller agreed to enter into a sales plan pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, to sell the Purchaser Shares at a price of not less than $6.20 (subject to adjustment for any share splits, share dividends, or similar events) per Purchaser Share. On the one-year anniversary of the closing date, the Company agreed to repurchase any Purchaser Shares not sold at a price of $6.20 (subject to adjustment for any share splits, share dividends, or similar events) per Purchaser Share. Ameri-Can’s primary asset is convertible debt with Davis College, Inc., which operates Davis College in Toledo, Ohio, pursuant to which Ameri-Can has the right to convert its convertible debt security into 100% of the shares of Davis College, Inc. prior to March 31, 2022. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The consolidated financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Principal of consolidation | Principal of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. Principal activities Percentage Date of Place of Elite Education International Co., Ltd (the “Company”) Investment holding — December 13, 2017 BVI Quest Holdings International LLC (“QHI”) Foreign education programs and student dormitory services 100 % December 19, 2012 Ohio, US Miami International Education Center LLC (“MIE”) Collection of tuition payments from oversea students 100 % January 23, 2017 Ohio, US Highrim Holding International Limited (“HHI”) Investing holding 100 % July 9, 2021 BC, Canada |
Use of estimates | Use of estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Actual amounts could differ from those estimates and differences could be material. Changes in estimates are recorded in the period they are identified. There were no significant accounting estimates reflected in the Company’s consolidated financial statements. |
Foreign currency and foreign currency translation | Foreign currency and foreign currency translation The Company’s reporting currency is the United States dollar (“US$”). The US$ is the functional currency of the Company and all of its subsidiaries. Transactions denominated in other than the functional currencies are re-measured into the functional currency of the entity at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional currency at the prevailing rates of exchange at the balance date. The resulting exchange differences are reported in the consolidated statements of operations and comprehensive income. |
Certain risks and concentration | Certain risks and concentration The Company’s financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and notes receivable. As of September 30, 2021 and 2020, substantially all of the Company’s cash and cash equivalents were held in major financial institutions located in the US. The Company does not have trades receivable related to students as they are required to prepay service fees. Accounts receivable at September 30, 2021 primarily consist of receivable of $82,500 in relation to student recruitment services that the Company performed for third parties and interest receivable of $70,000 related to a note receivable. The remaining $180,000 note receivable balance as at September 30, 2021 is related to a third party borrower. Although the Company is directly affected by the financial conditions of the borrower, the Company does not believe significant credit risk exist since the borrower is also the Company’s student recruitment agent who charges the Company recruitment commission fees for its services. The Company can delay or withhold its payments of recruitment commission fees to the recruitment agent borrower to mitigate the credit risk. Subsequent to September 30, 2021, the Company has collected $180,000 of the note receivable from the borrower. Therefore, there was no significant concentration risk for the Company as at September 30, 2021 and 2020. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents consist of petty cash on hand and cash held in banks, which are highly liquid and have original maturities of three months or less and are unrestricted as to withdrawal or use. |
Revenue recognition | Revenue recognition The Company adopted ASC 606 for its fiscal year beginning on October 1, 2020 using the modified retrospective approach. There were no material unfinished contracts with customers on the adoption date of ASC 606. Prior to the adoption of ASC 606, under ASC 605, the basic criteria necessary for revenue recognition were: (i) Persuasive evidence of an arrangement exists, (ii) Delivery has occurred or services have been rendered (iii) The selling price is fixed or determinable, and (iv) Collectability is reasonably assured. ASC 606 provides for a five-step model for recognizing revenue from contracts with customers. These five steps include: (i) Identify the contract (ii) Identify performance obligations (iii) Determine transaction price (iv) Allocate transaction price (v) Recognize revenue Under ASC 606, revenue is recognized when the customer obtains control of a good or service. A customer obtains control of a good or service if it has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. The Company’s revenue streams contain two primary performance obligations, which are the: i) English education programs; and ii) the accommodation services. The transfer of control of the Company’s English education programs occurs over time upon the delivery of the services to the students based on the terms of the semester. Similar, the transfer of the accommodation services occurs over time as the students receive the benefits of the accommodation services based on the terms of the semester. Therefore, revenues for English education programs and accommodation services are both recognized over time as the students simultaneously receive the services and consume the benefits provided by the Company’s performance of the services. Funds received from student prior to provision of our education and accommodation services are recognized as deferred revenue. The deferred revenue is subsequently released into revenue once the registered semester starts and is released using straight-line method based on the semester period, which is generally three months. The release of the deferred revenue is to match the timing of the cost of our services, which is generally also based on the semester term. |
Costs of services | Costs of services Costs of services are primarily comprised of the tuition fees paid to our partnered education institution, Miami University (“MU”), for the provision of our English language programs and fees paid to a third-party university located in China for using its facility to hold our MU English language programs online due to Covid-19 travel restrictions. These fees are recognized into costs of services when such fees are incurred based on semester terms in direct relation to MU’s conducting of the English language education services for us. |
Fair value measurement | Fair value measurement Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value as follows: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Observable, market-based inputs, other than quoted prices, in active markets for identical assets or liabilities. Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company’s financial instruments include cash and cash equivalents, accounts receivable, notes receivables, accounts payable and accrued liabilities and taxes payable. The carrying amounts of cash and cash equivalents, accounts receivable, note receivable, accounts payable and accrued liabilities and due to related party approximate their fair values due to the short-term nature of these instruments. For lease liabilities, fair value approximates their carrying value at the year-end as the interest rates used to discount the host contracts approximate market rates. The Company noted no transfers between levels during any of the periods presented. The Company did not have any instruments that were measured at fair value on a recurring nor non-recurring basis as of September 30, 2021 and 2020. |
Property and equipment | Property and equipment Property and equipment are recorded at cost, less accumulated depreciation and impairment. Depreciation of property and equipment is calculated on a straight-line basis, after consideration of expected useful lives and estimated residual values. The estimated annual deprecation rate of these assets are generally as follows: Category Depreciation Estimated Buildings 33 to 39 $Nil Machinery & equipment 3 $Nil Vehicles 5 $Nil Furniture and fixtures 7 $Nil Software 5 $Nil Expenditures for maintenance and repairs are expensed as incurred. Gains and losses on disposals are the differences between net sales proceeds and carrying amount of the relevant assets and are recognized in the consolidated statements of operations and comprehensive income. |
Leases | Leases The Company adopted ASC 842 – Leases The Company determines if an arrangement is a lease at inception. The Company may have lease agreements with lease and non-lease components, which are generally accounted for separately. Leases are classified as either operating leases or finance leases pursuant to ASC 842. i) Operating leases Operating leases are recognized as right-of-use assets (“ROU”) in non-current assets and lease liabilities in non-current liabilities in the consolidated balance sheets if the initial lease term is greater than 12 months. For leases with an initial term of 12 months or less the Company recognizes those lease payments on a straight-line basis over the lease term. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, management uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Management uses the implicit rate when readily determinable. Lease expense for lease payments is recognized on a straight-line basis over the lease term and are included in general and administrative (“G&A”) expenses. ii) Finance leases Finance lease ROU assets are included in property, plant and equipment, trade and other payables, and other non-current liabilities in the consolidated balance sheets. Finance lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, management uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Management uses the implicit rate when readily determinable. Finance lease ROU assets are generally amortized over the lease term and are included in depreciation expense. The interest on the finance lease liabilities is included in interest expense. |
Impairment of long-lived assets | Impairment of long-lived assets The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amounts to the expected future undiscounted cash flows attributable to these assets. If it is determined that an asset is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the assets exceeds the expected discounted cash flows arising from those assets. There were no impairment losses for the years ended September 30, 2021 and 2020. |
Taxation | Taxation Current income taxes are provided on the basis of net profit for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are recognized for temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements, net operating loss carry forwards and credits. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in which temporary differences are expected to be reversed or settled. The effect on deferred tax assets and liabilities of changes in tax rates is recognized in the statement of operation and comprehensive income in the period of the enactment of the change. The Company considers positive and negative evidence when determining whether a portion or all of its deferred tax assets will more likely than not be realized. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry-forward periods, its experience with tax attributes expiring unused, and its tax planning strategies. The ultimate realization of deferred tax assets is dependent upon its ability to generate sufficient future taxable income within the carry-forward periods provided for in the tax law and during the periods in which the temporary differences become deductible. When assessing the realization of deferred tax assets, the Company has considered possible sources of taxable income including (i) future reversals of existing taxable temporary differences, (ii) future taxable income exclusive of reversing temporary differences and carry-forwards, (iii) future taxable income arising from implementing tax planning strategies, and (iv) specific known trend of profits expected to be reflected within the industry. The Company recognizes a tax benefit associated with an uncertain tax position when, in its judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority. For a tax position that meets the more-likely-than-not recognition threshold, the Company initially and subsequently measures the tax benefit as the largest amount that the Company judges to have a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority. The Company’s liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances, such as the progress of tax audits, case law developments and new or emerging legislation. Such adjustments are recognized entirely in the period in which they are identified. The Company’s effective tax rate includes the net impact of changes in the liability for unrecognized tax benefits and subsequent adjustments as considered appropriate by management. The Company classifies interest and penalties recognized on the liability for unrecognized tax benefits as income tax expense. |
Earnings per share | Earnings per share Basic earnings per share is computed by dividing net income attributable to shareholders by the weighted average number of common shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between common shares and other participating securities based on their participating rights. Net loss is not allocated to other participating securities if based on their contractual terms they are not obligated to share in the losses. Diluted earnings per share is calculated by dividing net income attributable to common shareholders by the weighted average number of common and dilutive common equivalent shares outstanding during the period. Common equivalent shares are not included in the denominator of the diluted loss per share calculation when inclusion of such shares would be anti-dilutive. |
Defined contribution plans | Defined contribution plans The Company contributes to defined contribution retirement schemes which are available to all employees. Contributions to the schemes by the Company and employees are calculated as a percentage of employees’ basic salaries. The retirement benefit scheme cost charged to profit or loss represents contributions payable by the Company to the funds. |
Recently issued accounting standards | Recently issued accounting standards Effective October 1, 2020, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which clarifies the principles of recognizing revenue and create common revenue recognition guidance between U.S. GAAP and International Financial Reporting Standards (“IFRS”). The adoption of the new standard did not have material adjustment to the Company’s consolidated financial statements. Effective October 1, 2020, the Company adopted ASU 2016-02, Leases (Topic 842). The Company adopted the new standard utilizing the “optional transition method”, which permits the Company to apply the new lease standard at the adoption date. As the optional transition method is being utilized, the Company’s reporting for the comparative periods presented in the financial statements in which it adopts Topic 842 will continue to be reported pursuant to Topic 840. On adoption, the Company elected to utilize the package of practical expedients permitted within the new standard, which among other things, allows the Company to carryforward the historical lease classification. The Company also elected not to recognize the lease assets and liabilities for leases with an initial term of 12 months or less and will recognize those lease payments on a straight-line basis over the lease term. On adoption of the new standard the Company recognized ROU assets of $799,760 with a corresponding increase in operating lease liability. There was no impact on retained earnings or cash flows. Effective October 1, 2020, the Company adopted ASU 2016-13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which a Group recognizes an allowance based on the estimate of expected credit loss. The adoption of the new standard did not have material adjustment to the Company’s consolidated financial statements. Effective October 1, 2020, the Company adopted ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 provides guidance for targeted changes with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. The ASU provides guidance on eight specific cash flow issues: i. Debt Prepayment or Debt Extinguishment Costs; ii. Settlement of Zero-Coupon Debt Instruments or Other Debt Instruments with Coupon Interest Rates That Are Insignificant in Relation to the Effective Interest Rate of the Borrowing; iii. Contingent Consideration Payments Made after a Business Combination; iv. Proceeds from the Settlement of Insurance Claims; v. Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, including Bank-Owned Life Insurance Policies; vi. Distributions Received from Equity Method Investees; vii. Beneficial Interests in Securitization Transactions; and viii. Separately Identifiable Cash Flows and Application of the Predominance Principle The adoption of the Company ASU 2016-15 did not have material adjustments to the Company’s consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for scope exception, and it simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for public business entities that meet the definition of an SEC filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows. |
Summary of significant accoun_2
Summary of significant accounting policies (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of subsidiaries | Principal activities Percentage Date of Place of Elite Education International Co., Ltd (the “Company”) Investment holding — December 13, 2017 BVI Quest Holdings International LLC (“QHI”) Foreign education programs and student dormitory services 100 % December 19, 2012 Ohio, US Miami International Education Center LLC (“MIE”) Collection of tuition payments from oversea students 100 % January 23, 2017 Ohio, US Highrim Holding International Limited (“HHI”) Investing holding 100 % July 9, 2021 BC, Canada |
Schedule of property and equipment | Category Depreciation Estimated Buildings 33 to 39 $Nil Machinery & equipment 3 $Nil Vehicles 5 $Nil Furniture and fixtures 7 $Nil Software 5 $Nil |
Prepaid Expenses (Tables)
Prepaid Expenses (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Prepaid And Other Assets Current Disclosure [Abstract] | |
Schedule of Prepaid expenses | September 30, September 30, US$ US$ Prepaid recruitment fees 159,883 762,367 Prepaid tuition fees to Miami University 550,613 534,791 Prepaid fees to Renda for Beijing office expenses 558,356 - Prepaid fees to Dongbei University of Finance and Economics 181,829 220,621 Prepaid insurance 39,448 44,150 Other prepaid expenses 70,718 70,718 Total 1,560,847 1,632,647 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment net | September 30, September 30, US$ US$ Land 1,007,273 1,007,273 Buildings 2,131,945 2,113,415 Machinery & equipment 84,542 84,542 Vehicles 127,997 156,175 Furniture and fixtures 71,301 71,301 Software 698,000 230,938 Total 4,121,058 3,663,644 Less: Accumulated depreciation $ (641,136 ) $ (543,080 ) Property and equipment, net 3,479,922 3,120,564 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts payable and accrued liabilities | September 30, September 30, US$ US$ Accounts payable 148,761 51,774 Rent payables - - Student refundable deposits 2,096,073 1,151,473 Accrued commission expenses 233,528 152,821 Salary payables - 225,910 Other payables 482,553 394,690 Total 2,960,915 1,976,668 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income taxes | September 30, September 30, September 30, US$ US$ US$ Current 13,889 397,553 572,082 Deferred (321,057 ) - 96,714 Total income tax (recovery) (307,168 ) 397,553 668,796 |
Schedule of statutory income tax rates | September 30, September 30, September 30, US$ US$ US$ Income before income tax expenses 1,391,481 1,409,108 2,723,554 BVI statutory income tax rate - % - % - % Income tax calculated at statutory rate - - - (Increase) decrease in income tax expense resulting from: Rate differences in various jurisdictions 13,889 397,553 668,796 Utilization of loss carryforward - - (96,714 ) Change in deferred income tax assets due to US reform - - - Change in deferred income tax assets due to use of loss carryforward (321,057 ) - 96,714 Income tax expense/Effective tax rate (307,168 ) 397,553 668,796 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted net earnings per share | September 30, September 30, September 30, US$ US$ US$ Numerator: Net Income (loss) attributable to ordinary shareholders—basic and diluted (1,084,313 ) 1,011,555 2,054,758 Denominator: Weighted average number of ordinary shares outstanding—basic and diluted 9,160,447 7,938,000 7,938,000 Earning (loss) per share attributable to ordinary shareholders—basic and diluted (0.12 ) 0.13 0.26 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future aggregate minimum lease payments | 2022 $ 269,248 2023 274,633 2024 256,355 Total future minimum lease payments $ 800,236 Less: imputed interest (78,942 ) Total operating lease liability $ 721,294 Less: operating lease liability - current 259,297 Total operating lease liability – non current $ 461,997 |
Related Party Transactions an_2
Related Party Transactions and Balances (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of related parties | Name of related parties Relationship with the Company Jianbo Zhang Founder and ultimate controlling shareholder, CEO Beijing Renda Finance and Education Technology Co., Ltd (“Renda”) A company controlled by the founder and ultimate controlling shareholder, CEO from March 23, 3009 to April 26, 2018 Jinan Wanze Education Information Consulting Co., Ltd. (“Jinan Wanze”) A company controlled by the founder and ultimate controlling shareholder, CEO from May 10, 2011 to July 26, 2018 |
Summary of significant accoun_3
Summary of significant accounting policies (Details) | 12 Months Ended |
Sep. 30, 2021USD ($) | |
Accounting Policies [Abstract] | |
Commission receivable | $ 82,500 |
Interest receivable | 70,000 |
Remaining note receivable | 180,000 |
Collection of note receivable from borrower | $ 180,000 |
Tax benefit percentage | 50.00% |
Summary of significant accoun_4
Summary of significant accounting policies (Details) - Schedule of subsidiaries | 12 Months Ended |
Sep. 30, 2021 | |
Elite Education International Co., Ltd (the “Company”) [Member] | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Principal activities | Investment holding |
Percentage of ownership | |
Date of incorporation | Dec. 13, 2017 |
Place of incorporation | BVI |
Quest Holdings International LLC (“QHI”) [Member] | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Principal activities | Foreign education programs and student dormitory services |
Percentage of ownership | 100.00% |
Date of incorporation | Dec. 19, 2012 |
Place of incorporation | Ohio, US |
Miami International Education Center LLC (“MIE”) [Member] | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Principal activities | Collection of tuition payments from oversea students |
Percentage of ownership | 100.00% |
Date of incorporation | Jan. 23, 2017 |
Place of incorporation | Ohio, US |
Highrim Holding International Limited (“HHI”) [Member] | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Principal activities | Investing holding |
Percentage of ownership | 100.00% |
Date of incorporation | Jul. 9, 2021 |
Place of incorporation | BC, Canada |
Summary of significant accoun_5
Summary of significant accounting policies (Details) - Schedule of property and equipment | 12 Months Ended |
Sep. 30, 2021USD ($) | |
Buildings [Member] | |
Summary of significant accounting policies (Details) - Schedule of property and equipment [Line Items] | |
Estimated residual value (in Dollars) | |
Machinery & equipment [Member] | |
Summary of significant accounting policies (Details) - Schedule of property and equipment [Line Items] | |
Depreciation years | 3 years |
Estimated residual value (in Dollars) | |
Vehicles [Member] | |
Summary of significant accounting policies (Details) - Schedule of property and equipment [Line Items] | |
Depreciation years | 5 years |
Estimated residual value (in Dollars) | |
Furniture and fixtures [Member] | |
Summary of significant accounting policies (Details) - Schedule of property and equipment [Line Items] | |
Depreciation years | 7 years |
Estimated residual value (in Dollars) | |
Software [Member] | |
Summary of significant accounting policies (Details) - Schedule of property and equipment [Line Items] | |
Depreciation years | 5 years |
Estimated residual value (in Dollars) | |
Minimum [Member] | Buildings [Member] | |
Summary of significant accounting policies (Details) - Schedule of property and equipment [Line Items] | |
Depreciation years | 33 years |
Maximum [Member] | Buildings [Member] | |
Summary of significant accounting policies (Details) - Schedule of property and equipment [Line Items] | |
Depreciation years | 39 years |
Prepaid Expenses (Details) - Sc
Prepaid Expenses (Details) - Schedule of Prepaid expenses - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Schedule of Prepaid expenses [Abstract] | ||
Prepaid recruitment fees | $ 159,883 | $ 762,367 |
Prepaid tuition fees to Miami University | 550,613 | 534,791 |
Prepaid fees to Renda for Beijing office expenses | 558,356 | |
Prepaid fees to Dongbei University of Finance and Economics | 181,829 | 220,621 |
Prepaid insurance | 39,448 | 44,150 |
Other prepaid expenses | 70,718 | 70,718 |
Total | $ 1,560,847 | $ 1,632,647 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expenses | $ 126,234 | $ 87,593 |
Property and Equipment, net (_2
Property and Equipment, net (Details) - Schedule of property and equipment net - Property and Equipment [Member] - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 4,121,058 | $ 3,663,644 |
Less: Accumulated depreciation | (641,136) | (543,080) |
Property and equipment, net | 3,479,922 | 3,120,564 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 1,007,273 | 1,007,273 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 2,131,945 | 2,113,415 |
Machinery & equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 84,542 | 84,542 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 127,997 | 156,175 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 71,301 | 71,301 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 698,000 | $ 230,938 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - Schedule of Accounts payable and accrued liabilities - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Schedule of Accounts payable and accrued liabilities [Abstract] | ||
Accounts payable | $ 148,761 | $ 51,774 |
Rent payables | ||
Student refundable deposits | 2,096,073 | 1,151,473 |
Accrued commission expenses | 233,528 | 152,821 |
Salary payables | 225,910 | |
Other payables | 482,553 | 394,690 |
Total | $ 2,960,915 | $ 1,976,668 |
Income Taxes (Details)
Income Taxes (Details) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||
Federal income tax rate | 21.00% | 21.00% |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of provision for income taxes - USD ($) | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Schedule of provision for income taxes [Abstract] | |||
Current | $ 13,889 | $ 397,553 | $ 572,082 |
Deferred | (321,057) | 96,714 | |
Total income tax (recovery) | $ (307,168) | $ 397,553 | $ 668,796 |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of statutory income tax rates - USD ($) | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Schedule of statutory income tax rates [Abstract] | |||
Income before income tax expenses | $ 1,391,481 | $ 1,409,108 | $ 2,723,554 |
BVI statutory income tax rate | |||
Income tax calculated at statutory rate | |||
(Increase) decrease in income tax expense resulting from: | |||
Rate differences in various jurisdictions | 13,889 | 397,553 | 668,796 |
Utilization of loss carryforward | (96,714) | ||
Change in deferred income tax assets due to US reform | |||
Change in deferred income tax assets due to use of loss carryforward | (321,057) | 96,714 | |
Income tax expense/Effective tax rate | $ (307,168) | $ 397,553 | $ 668,796 |
Ordinary Shares (Details)
Ordinary Shares (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Oct. 27, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Ordinary Shares (Details) [Line Items] | |||
Ordinary shares, par value (in Dollars per share) | $ 0.001 | ||
Ordinary shares, authorized | 50,000,000 | ||
Ordinary shares, outstanding | 12,600,000 | ||
Ordinary shares, issued | 12,600,000 | ||
Amount held in trust account (in Dollars) | $ 200,000 | ||
Ordinary Shares [Member] | |||
Ordinary Shares (Details) [Line Items] | |||
Reverse stock split, description | the Company executed a 1-for-0.63 reverse stock split. As a result of the stock split, the number of authorized shares to be issued becomes 31,500,000 and the issued and outstanding shares becomes 7,938,000 shares as of September 30, 2020. | ||
IPO [Member] | |||
Ordinary Shares (Details) [Line Items] | |||
Common shares issued | 2,474,843 | ||
Net proceeds (in Dollars) | $ 8,737,634 | ||
Amount held in trust account (in Dollars) | $ 200,000 |
Earnings Per Share (Details) -
Earnings Per Share (Details) - Schedule of basic and diluted net earnings per share - USD ($) | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | |||
Net Income (loss) attributable to ordinary shareholders—basic and diluted | $ (1,084,313) | $ 1,011,555 | $ 2,054,758 |
Denominator: | |||
Weighted average number of ordinary shares outstanding—basic and diluted | 9,160,447 | 7,938,000 | 7,938,000 |
Earning (loss) per share attributable to ordinary shareholders—basic and diluted | $ (0.12) | $ 0.13 | $ 0.26 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | |
Lease term | 5 years |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of future aggregate minimum lease payments | 12 Months Ended |
Sep. 30, 2021USD ($) | |
Schedule of future aggregate minimum lease payments [Abstract] | |
2022 | $ 269,248 |
2023 | 274,633 |
2024 | 256,355 |
Total future minimum lease payments | 800,236 |
Less: imputed interest | (78,942) |
Total operating lease liability | 721,294 |
Less: operating lease liability - current | 259,297 |
Total operating lease liability – non current | $ 461,997 |
Related Party Transactions an_3
Related Party Transactions and Balances (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Related Party Transactions [Abstract] | ||
Related party balances | $ 140,000 | $ 140,000 |
Related Party Transactions an_4
Related Party Transactions and Balances (Details) - Schedule of related parties | 12 Months Ended |
Sep. 30, 2021 | |
Jianbo Zhang [Member] | |
Related Party Transaction [Line Items] | |
Name of related parties | Founder and ultimate controlling shareholder, CEO |
Beijing Renda Finance and Education Technology Co., Ltd (“Renda”) [Member] | |
Related Party Transaction [Line Items] | |
Name of related parties | A company controlled by the founder and ultimate controlling shareholder, CEO from March 23, 3009 to April 26, 2018 |
Jinan Wanze Education Information Consulting Co., Ltd. (“Jinan Wanze”) [Member] | |
Related Party Transaction [Line Items] | |
Name of related parties | A company controlled by the founder and ultimate controlling shareholder, CEO from May 10, 2011 to July 26, 2018 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) | 1 Months Ended | ||
Nov. 24, 2021 | Nov. 17, 2021 | Nov. 01, 2021 | |
Subsequent Events (Details) [Line Items] | |||
Gross proceeds (in Dollars) | $ 2,000,000 | ||
Stock purchase agreement and subscription agreement, description | Pursuant to the Stock Purchase Agreement and Subscription Agreement, which were consummated on November 26, 2021, the Company acquired 70% of the equity of Ameri-Can and 77.78% of the voting equity of Ameri-Can for an aggregate purchase price of: (i) $1.25 million in cash and the issuance of 201,613 shares of Company common stock (the “Purchaser Shares”) to the Sellers; and (ii) $2.5 million in cash to Ameri-Can. Of the remaining 30% of the equity Ameri-Can, 10% is held by one Seller and represents non-voting and non-dilutable equity. | ||
Purchase price per share | $ 6.2 | ||
Repurchase price per share | $ 6.2 | ||
Convertible debt, percentage | 100.00% | ||
Director [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Total shares (in Shares) | 300,857 |