| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 2 — SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES Basis of consolidation The accompanying consolidated financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”)
pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). Principles of consolidation The consolidated financial statements include
the financial statements of the Company and its subsidiaries. All intercompany transactions and balances are eliminated upon consolidation. Non-controlling interests Non-controlling interest represents the portion
of the net assets of subsidiaries attributable to interests that are not owned or controlled by the Company. The non-controlling interest
is presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Non-controlling
interest’s operating results are presented on the face of the consolidated statements of income and comprehensive income as an allocation
of the total income for the year between non-controlling shareholders and the shareholders of the Company. As of September 30, 2022 and
2021, non-controlling interests represent two non-controlling shareholders’ proportionate share of equity interests in Hongkou School
and Xianjin Technology. Uses of estimates In preparing the consolidated financial statements
in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant
estimates required to be made by management include, but are not limited to, determinations of the useful lives and valuation of long-lived
assets, estimates of allowances for doubtful accounts, refund liabilities, revenue recognition, and valuation allowance for deferred tax
assets. Cash Cash comprise cash at banks and on hand, which are unrestricted as to withdrawal and use. Fair value of financial instruments ASC 825-10 requires certain disclosures regarding
the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes
the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of
unobservable inputs. The three levels of inputs used to measure fair value are as follows:
● Level
1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active
markets.
● Level
2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets,
quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable
and inputs derived from or corroborated by observable market data.
● Level
3 — inputs to the valuation methodology are unobservable. Unless otherwise disclosed, the fair value of
the Company’s financial instruments, including cash, Accounts receivable, prepayments and other current assets, accounts payable,
deferred revenue, accrued liabilities, due to related parties, short term bank loans and taxes payable, approximates their recorded values
due to their short-term maturities. The Company determined that the carrying value of the long-term liabilities approximated their present
value as the interest rates applied reflect the current quoted market yield for comparable financial instruments. Accounts receivable, net Accounts receivable are recognized and carried
at original invoiced amount less an estimated allowance for uncollectible accounts. The Company determines the adequacy of reserves for
doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful
receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s
best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is
recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of income and comprehensive
income. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the
likelihood of collection is not probable. For the year ended September 30, 2022 and 2021, $23,384 and $31,440 was written off against
accounts receivables, respectively. Allowance for uncollectible balances amounted to $92,086 and $ nil Prepayment and other assets Prepayment and other assets primarily consist
of prepaid rents, prepaid service fee, advances to vendors for purchasing goods or services that have not been received or provided, loans
to third-parties, security deposits made to customers and advances to employees. Prepayment and other assets are classified as either
current or non-current based on the terms of the respective agreements. These advances are unsecured and are reviewed periodically to
determine whether their carrying value has become impaired. The Company considers the assets to be impaired if the collectability of the
advance becomes doubtful. The Company uses the aging method to estimate the allowance for uncollectible balances. The allowance
is also based on management’s best estimate of specific losses on individual exposures, as well as a provision on historical trends
of collections and utilizations. Actual amounts received or utilized may differ from management’s estimate of credit worthiness
and the economic environment. Other receivables are written off against the allowances only after exhaustive collection efforts. For the
year ended September 30, 2022 and 2021 $48,373 and $56,059 was written off against other receivables, respectively. Allowance for doubtful
accounts amounted to $92,086 and $ nil Property and equipment Property and equipment are recorded at cost less
accumulated depreciation. Depreciation is provided in the amounts sufficient to depreciate the cost of the related assets over their useful
lives using the straight-line method, as follows:
Useful life
Transport Equipment 5 years
Office Equipment 3-5 years
Leasehold Improvement 3-5 years Expenditures for maintenance and repairs, which
do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments
which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired
or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income and other
comprehensive income in other income or expenses. Impairment of long-lived assets Long-lived assets are evaluated for impairment
whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use
of the assets) indicate that the carrying amount may not be fully recoverable or that the useful life is shorter than the Company had
originally estimated. When these events occur, the Company evaluates the impairment by comparing the carrying value of the assets to an
estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the
sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Company recognizes an impairment
loss based on the excess of the carrying value of the assets over the fair value of the assets. No impairment charge was recognized for
the years ended September 30, 2022, 2021 and 2020, respectively. Revenue recognition The Company generates revenues primarily from
tuitions fees and other fees collected from services provided. Revenue is recognized when the price is fixed or determinable, persuasive
evidence of the arrangement exists, the service is performed or the product is delivered and collectability of the resulting receivable
is reasonably assured. The Company has adopted ASC 606, “Revenue
from Contracts with Customers” and all subsequent ASUs that modified ASC 606, using the modified retrospective approach for the
year ended September 30, 2019 and has elected to apply it retrospectively for the year ended September 30, 2018. ASC 606 establishes principles
for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts
to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods
or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those
goods or services recognized as performance obligations are satisfied. This new guidance provides a five-step analysis in determining
when and how revenue is recognized. Under the new guidance, revenue is recognized when a customer obtains control of promised goods or
services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods
or services. In addition, the new guidance requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows
arising from contracts with customers. The Company’s continuing operations currently
generated its revenue from the following main sources: Tutorial services The Company offers various off-campus small-group
foreign language tutoring programs. Each contract of tutorial service programs represents a series of distinct services, which is delivery
of various courses. The services have substantially the same pattern of transfer to the students, as such, they are considered as a single
performance obligation, which is satisfied proportionately based on a straight-line basis over the program term as students simultaneously
receive and consume the benefits of these services throughout the program term. The Company is the principal in providing tutorial services
as it controls such services before the services are transferred to the customer. The program fees are generally collected in advance
and are initially recorded as deferred revenue. Generally, the Company approves refunds for any remaining classes to students who decide
to withdraw from a course within the predetermined period in the contract. The refund is equal to and limited to the amount related to
the undelivered classes. The Company estimates and records refund liability for the portion the Company does not expect to be entitled
based on historical refund ratio on a portfolio basis using the expected value method. Logistic and consulting services The Company also provides logistic and consulting
services to schools and kindergartens, including but not limited to logistic, catering, branding, academic management, basic education
resources, human resources, procurement and logistics management services. The promised services in each logistic and consulting service
contract are combined and accounted as a single performance obligation, as the promised services in a contract are not distinct and are
considered as a significant integrated service. The revenue is recognized on a straight-line basis over the period of the logistic and
consulting service, as customers simultaneously receive and consume the benefits of these services throughout the service period. Practical expedient As a practical expedient, the Company elects to
record the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity
otherwise would have recognized is one year or less. The Company has applied the new revenue standard requirements to a portfolio of contracts
(or performance obligations) with similar characteristics for transactions where it is expected that the effects on the financial statements
of applying the revenue recognition guidance to the portfolio would not differ materially from applying this guidance to the individual
contracts (or performance obligations) within that portfolio. Therefore, the Company elects the portfolio approach in applying the new
revenue guidance. Disaggregation of revenue Revenues from tutorial service and logistic and
consulting services are recognized over time, based on a straight-line basis as the Company’s customers including students and schools
as well as kindergartens simultaneously receive the Company’s services throughout the service period. Revenues attributable to educational
materials and canteen foods are recognized at point in time when control of the promised goods are transferred to the customers. As the
Company’s long-lived assets are all located in Yangtze River Delta, which is a triangle-shaped megalopolis comprising areas of Shanghai,
southern Jiangsu province and northern Zhejiang province and substantially all of the Company’s revenues are derived from this area,
no geographical disaggregation is presented. For the years ended September 30, 2022, 2021 and 2020, the disaggregation of revenue by major
revenue stream and time of the revenue recognition is as follows:
For the years ended
2022 2021 2020
Category of Revenue:
Tutorial service revenue $ 9,279,210 $ 13,518,061 $ 6,827,677
Logistic and consulting services and others 1,535,446 1,508,930 907,508
Total $ 10,814,656 $ 15,026,991 $ 7,735,185
Timing of Revenue Recognition:
Services transferred over time $ 10,156,547 $ 13,883,717 $ 7,194,705
Goods transferred at a point in time 658,109 1,143,274 540,480
$ 10,814,656 $ 15,026,991 $ 7,735,185 Contract assets In accordance with ASC340-40-25-1, an entity shall
recognize as an asset the incremental costs of obtaining a contract with a customer if the entity expects to recover those costs. Entities
sometimes incur costs to obtain a contract that otherwise would not have been incurred. Entities also may incur costs to fulfill a contract
before a good or service is provided to a customer. The revenue standard provides guidance on costs to obtain and fulfill a contract that
should be recognized as assets. Costs that are recognized as assets are amortized over the period that the related goods or services transfer
to the customer, and are periodically reviewed for impairment. Only incremental costs should be recognized as assets. Incremental costs
of obtaining a contract are those costs that the entity would not have incurred if the contract had not been obtained. As of September 30, 2022, in order to develop
non-English foreign language tutorial service for middle school students, the Company incurred total of approximately $2.0 million (RMB14.3
million) commission type fee and administration costs paid to agents to facilitate the related contracts with students for the tutorial
service period, generally from 4 to 30 months tutorial service periods. The Company will not incur such costs if the Company does not
enter into the tutorial service contracts with the students, as a result, the cost of approximately $2.0 million (RMB14.3 million) is
considered as the incremental costs of obtaining contracts and shall be capitalized and amortize over tutorial service period. For the
years ended September 30, 2022, 2021 and 2020, the Company amortized related amount of $1,141,544, $1,097,346 and $122,144 into selling
expense, respectively. As of September 30, 2022 and 2021, the contract assets amounted to $333,314 and $672,506, respectively. Contract liability Contract liabilities are presented as deferred
revenue in the consolidated balance sheets, which represents service fee payment received from students in advance of completion of performance
obligations under a contract. The balance of deferred revenue is recognized as revenue upon the completion of performance obligations.
As of September 30, 2022 and 2021, the balance of deferred revenue amounted to $4,435,393 and $6,324,472, respectively. Substantially
all of which will be recognized as revenue during the Company’s following fiscal year. Refund liability Refund liability mainly relates to the estimated
refunds that are expected to be provided to students if they decide they no longer want to take the course. Refund liability estimates
are based on historical refund ratio on a portfolio basis using the expected value method. As of September 30, 2022 and 2021, refund liability
amounted to $237,691 and $348,472, respectively. Cost of revenues Cost of revenues mainly consists of salaries to
instructors and tutors, rental expenses for office space and learning centers, depreciation and amortization of properties and equipment
and teaching materials used in the provision of educational services. Government subsidies Government subsidies are recognized when there
is reasonable assurance that the Company will comply with the conditions attach to it and the grant will be received. Government grant
for the purpose of giving immediate financial support to the Company with no future related costs or obligation is recognized in the Company’s
consolidated statements of comprehensive income when the grant becomes receivable. For the years ended September 30, 2022, 2021 and 2020,
government subsidies income amounted to $ nil nil Advertising expenditures Advertising expenditures are expensed as incurred
for the periods presented. Advertising expenditures have been included as part of selling and marketing expenses. For the years ended
September 30, 2022, 2021 and 2020, the advertising expenses amounted to $276,767, $247,952 and $142,134, respectively. Operating leases A lease for which substantially all the benefits
and risks incidental to ownership remain with the lessor is classified by the lessee as an operating lease. All leases of the Company
are currently classified as operating leases. Value added tax (“VAT”) Revenue represents the invoiced value of goods
and services, net of VAT. The VAT is based on gross sales price and VAT rates range up to 6%, depending on the type of products sold or
service provided. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output
VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in taxes payable. All of the VAT returns filed by the Company’s
subsidiaries in PRC remain subject to examination by the tax authorities for five years from the date of filing. Income taxes The Company accounts for current income taxes
in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between
the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected
to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the
period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount
expected to be realized. An uncertain tax position is recognized as a benefit only if it is
“more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest
amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more
likely than not” test, no tax benefit is recorded. As of September 30, 2022 and 2021, there are $2,573,831 and $2,475,474 respectively
of unrecognized tax benefits included in income tax payable that if recognized would impact the effective tax rate. Penalties and interest
incurred related to underpayment of income tax are classified as income tax expense in the period incurred. No significant penalties or
interest relating to income taxes have been incurred for the years ended September 30, 2022, 2021 and 2020. All of the tax returns of
the Company’s subsidiaries in the PRC remain subject to examination by the tax authorities for five years from the date of filing. Employee benefits Full-time employees of the Company in the PRC
participate in a government-mandated employer contribution social insurance plan pursuant to which certain pension benefits, medical care,
unemployment insurance, employee housing fund and other welfare benefits are provided to eligible full-time employees. Chinese labor regulations
require that the Company make contributions to the government for these benefits based on government prescribed percentage of the employee’s
salaries. The contributions to the plan are expensed as incurred. Obligations for contributions to employer contribution social insurance
plans are recognized as an employee benefit expenses in the period during which services are rendered by employees. Earnings (loss) per Share The Company computes earnings per share (“EPS”)
in accordance with ASC 260, “Earnings per Share”. ASC 260 requires companies to present basic and diluted EPS. Basic EPS
is measured as net income divided by the weighted average common share outstanding for the period. Diluted EPS presents the dilutive
effect on a per-share basis of the potential Ordinary Shares (e.g., convertible securities, options and warrants) as if they had been
converted at the beginning of the periods presented, or issuance date, if later. Potential Ordinary Shares that have an anti-dilutive
effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. Warrants The Company accounts for warrants as either equity-classified
or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance
in Financial Accounting Standards Board (“FASB”) ASC 480 “Distinguishing Liabilities from Equity” (“ASC
480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding
financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants
meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s
own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside
of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional
judgment, is conducted at the time of warrant issuance and as of each subsequent annually period end date while the warrants are outstanding. For issued or modified warrants that meet all
of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance.
For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded
as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair
value of the warrants are recognized as a non-cash gain or loss on the statements of operations. Foreign currency translation The functional currencies of the Company are the
local currency of the county in which the subsidiaries operate. The Company’s financial statements are reported using U.S. Dollars.
The results of operations and the consolidated statements of cash flows denominated in foreign currencies are translated at the average
rates of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are
translated at the applicable rates of exchange in effect on that date. The equity denominated in the functional currencies is translated
at the historical rates of exchange at the time of capital contributions. Because cash flows are translated based on the average translation
rates, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with
changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange
rates from period to period are included as a separate component in accumulated other comprehensive income included in consolidated statements
of changes in equity. Gains and losses from foreign currency transactions are included in the consolidated statement of income and comprehensive
income. Since the Company operates primarily in the PRC,
the Company’s functional currency is the Chinese Yuan (“RMB”). The Company’s consolidated financial statements
have been translated into the reporting currency of U.S. Dollars (“US$”). The RMB is not freely convertible into foreign currency
and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts
could have been, or could be, converted into US$ at the rates used in the translation. The following table outlines the currency exchange
rates that were used in creating the consolidated financial statements in this report:
September 30, September 30, September 30,
Balance sheet items, except for equity accounts US$1=RMB 7.1135 US$1=RMB 6.4580 US$1=RMB 6.8033
Items in the statements of income and cash flows US$1=RMB 6.5332 US$1=RMB 6.5095 US$1=RMB 7.0077 Comprehensive (loss) income Comprehensive income consists of two components,
net income and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that
under U.S. GAAP are recorded as an element of shareholders’ equity but are excluded from net income. Other comprehensive income
(loss) consists of foreign currency translation adjustment resulting from the Company not using US$ as its functional currency. Risks and uncertainties Beginning in late 2019, an outbreak of a novel
strain of coronavirus (COVID-19) first emerged in China and has spread globally. In March 2020, the World Health Organization (“WHO”)
declared the COVID-19 as a pandemic. Governments in affected countries are imposing travel bans, quarantines and other emergency
public health measures, which have caused material disruption to businesses globally resulting in an economic slowdown. A new COVID-19 subvariant (Omicron) outbreak hit
China in March 2022, spreading more quickly and easily than previous strains. As a result, a new round of lockdowns, quarantines, or travel
restrictions has been imposed to date upon different provinces or cities in China by the relevant local government authorities. The Company
temporarily closed Shanghai office and the related tutorial centers and suspended offline marketing activities starting from April 1,
2022 as well, as required by the local authorities in Shanghai, and had employees located in Shanghai work remotely. Starting from June
1, 2022, the Company reopened Shanghai office and resumed offline marketing activities. During the fiscal years ended September 30, 2022,
the COVID-19 pandemic had a material negative impact on the Company’s financial positions and operating results. For the year ended
September 30, 2022, the Company’s tutorial service revenue decreased by $4,238,851 as compared to the year ended September 30, 2021
and the Company incurred net loss of $2,118,349 for the year ended September 30, 2022. The extent to which the COVID-19 pandemic may
impact the Company’s future financial results will depend on future developments, such as new information on the effectiveness of
the mitigation strategies, the duration, spread, severity, and recurrence of COVID-19 and any COVID-19 variants, the related travel advisories
and restrictions, the overall impact of the COVID-19 pandemic on the global economy and capital markets, and the efficacy of COVID-19
vaccines, which may also take extended time to be widely and adequately distributed, all of which remain highly uncertain and unpredictable.
Given this uncertainty, the Company is currently unable to quantify the expected impact of the COVID-19 pandemic on future operations,
financial condition, liquidity, and results of operations if the current situation continues. Segment reporting The Company’s chief operating decision-maker
(“CODM”) has been identified as its Chief Executive Officer, who reviews the consolidated results when making decisions about
allocating resources and assessing the performance of the Company as a whole and the management of the Company concludes that it has only
one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. The Company’s
long-lived assets are all located in the PRC and substantially all of the Company’s revenues are derived from the PRC. Therefore,
no geographical segments are presented. Concentrations of risks (a)
Concentration of credit risk Assets that potentially subject the Company to
a significant concentration of credit risk primarily consist of cash, accounts receivable and other current assets. The maximum exposure
of such assets to credit risk is their carrying amounts as at the balance sheet dates. As of September 30, 2022 and 2021, the aggregate
amount of cash of $2,155,389 and $1,165,735, respectively, was held at major financial institutions in mainland PRC, where there is a
RMB 500,000 deposit insurance limit for a legal entity’s aggregated balance at each bank. As of September 30, 2022 and 2021, cash
of $18,181,099 and $ nil (b)
Foreign currency risk A majority of the Company’s expense transactions
are denominated in RMB and a significant portion of the Company and its subsidiaries’ assets and liabilities are denominated in
RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be
transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances
in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies
which require certain supporting documentation in order to affect the remittance. It is difficult to predict how market forces or
PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. The change in the value
of the RMB relative to the U.S. dollar may affect the Company’s financial results reported in the U.S. dollar terms without giving
effect to any underlying changes in the Company’s business or results of operations. Currently, the Company’s assets, liabilities,
revenues and costs are denominated in RMB. To the extent that the Company needs to convert U.S. dollars into RMB for capital expenditures
and working capital and other business purposes, appreciation of RMB against U.S. dollar would have an adverse effect on the RMB amount
the Company would receive from the conversion. Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making
payments for dividends, strategic acquisition or investments or other business purposes, appreciation of U.S. dollar against RMB would
have a negative effect on the U.S. dollar amount available to the Company. Reclassifications The assets and liabilities related to the discontinued
operations were retroactively classified as assets/liabilities held for sale as of September 30, 2020, while results of operations related
to the discontinued operations for the years ended September 30, 2021 and 2020, were retroactively reported as income (loss) from discontinued
operations. Certain items in the financial statements of comparative
period have been reclassified to conform to the financial statements for the current period. The reclassification has no impact on net
earnings and financial position. Recent accounting pronouncements The Company considers the applicability and impact
of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. In February 2016, the FASB issued ASU 2016-02,
Leases (Topic 842), which requires less |
