| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 2 — SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES Emerging Growth Company Status The Company is an “emerging growth company,”
as defined in Section2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”),
and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that
are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and
proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder
approval of any golden parachute payments not previously approved. Further, Section102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company
can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but
any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that
when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging
growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison
of the Company’s financial statement with another public company which is neither an emerging growth company nor an emerging growth
company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting
standards used. 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, 2023 and 2022, non-controlling interests represented non-controlling shareholders’ proportionate share of the equity interests
in Hongkou School, Xianjin Technology, Fuyouyuan and Shanghai Jinheyu. 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. Although
these estimates are based on our knowledge of current events and actions we may undertake in the future, actual results may ultimately
differ from these estimates and assumptions. Furthermore, when testing assets for impairment in future periods, if management uses different
assumptions or if different conditions occur, impairment charges may result. 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, valuation of inventories, estimates of
allowances for doubtful accounts, contract assets, commission payables, refund liabilities, revenue recognition, and valuation allowance
for deferred tax assets. Cash Cash comprises cash at banks and on hand, which is 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 receivables 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. In June 2016, the FASB issued ASU
No. 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,”
which requires the Company to measure and recognize expected credit losses for financial assets held and not accounted for at fair value
through net income. The Company adopted this guidance effective October 1, 2022.The Company establishes a provision for doubtful receivables
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. As of September 30, 2023, accounts receivable aging
within 3 months amounted to $14,145, aging between 4 months to 6 months amounted to $11,239, aging between 7 months to 12 months amounted
to $ nil Inventories The Company values its inventories at the lower of cost, determined
on a first-in first out basis,
or net realizable value. The Company reviews its inventories periodically to determine if any markdown is necessary for potential obsolescence
or if a write-down is necessary if the carrying value exceeds net realizable value. As of September 30, 2023 and 2022, inventories
consisted of the following:
September 30, September 30,
Raw materials $ 153,851 $ -
Inventories $ 153,851 $ - 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, advances to employees, and prepayment for acquisition. 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, 2023 and 2022, $10,378 and $48,373 was written off against other receivables, respectively.
No allowance for doubtful accounts was recorded as of September 30, 2023 and 2022, respectively. Property and equipment, net 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
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, 2023, 2022 and 2021, respectively. Long-term investments Long-term investments are primarily consisted
of equity investments in privately held entities accounted for using the measurement alternative and equity investments accounted for
using the equity method. On October 1,2022, the Company adopted ASU 2016-01 Financial Instruments-Overall (Subtopic 825-10): Recognition
and Measurement of Financial Assets and Financial Liabilities. According to the guidance, the Company started to record equity investments
at fair value, with gains and losses recorded through net earnings. And the Company elected to measure certain equity investments without
readily determinable fair value at cost, less impairments, plus or minus observable price changes and assess for impairment quarterly. Equity investments without readily determinable
fair values After the adoption of this new accounting standard,
the Company elected to record equity investments without readily determinable fair values and not accounted for under the equity method
at cost, less impairment, adjusted for subsequent observable price changes on a nonrecurring basis, and report changes in the carrying
value of the equity investment in current earnings. Changes in the carrying value of the equity investment are required to be made whenever
there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. Reasonable efforts
shall be made to identify price changes that are known or that can reasonably be known. Equity investments with readily determinable
fair values Equity investments with readily determinable
fair values are measured and recorded at fair value using the market approach based on the quoted prices in active markets at the reporting
date. Equity investments accounted for using the
equity method The Company accounts for its equity investment
over which it has significant influence but does not own a majority equity interest or otherwise control, using the equity method. The
Company adjusts the carrying amount of the investment and recognizes investment income or loss for its share of the earnings or loss
of the investee after the date of investment. The Company assesses its equity investment for other-than-temporary impairment by considering
factors including, but not limited to, current economic and market conditions, operating performance of the entity, including current
earnings trends and undiscounted cash flows, and other entity-specific information. The fair value determination, particularly for investments
in a privately held entity, requires judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions
could affect the calculation of the fair value of the investment and determination of whether any identified impairment is other-than-temporary. 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, consulting services and others The Company provides services to schools, including
but not limited to catering and logistic service. Logistic revenue is recognized on a straight-line basis over the period, as customers
simultaneously receive and consume the benefits of the services. Catering revenue is recognized at point of sale. The Company also provides consulting services
to related-party kindergartens. According to the contracts signed with each of the three kindergartens, the Company provides a range
of educational management and consulting services, including branding, safety management, teacher training, supervision and evaluation
on teachers, rating guidance services, to the kindergartens during the contract periods. The intended contractual benefit to the kindergartens
of the management and consulting services is to enable the kindergartens’ smooth and effective operations. The promised services
in each of the consulting service contracts are combined and accounted as a single performance obligation, as the promised services are
considered as a significant integrated service. The consulting services are continuously provided and the kindergartens simultaneously
receive and consume the benefits of these services throughout the service period each month. The revenue is recognized over time during
the service period. Practical expedient 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 periods. Revenues attributable
to canteen foods and most educational materials 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, 2023, 2022 and 2021, the disaggregation
of revenue by major revenue stream and time of the revenue recognition is as follows:
For the years ended
2023 2022 2021
Category of Revenue:
Tutorial service revenue $ 5,446,169 $ 9,279,210 $ 13,518,061
Logistic and consulting services and others 709,424 1,535,446 1,508,930
Total $ 6,155,593 $ 10,814,656 $ 15,026,991
Timing of Revenue Recognition:
Services transferred over time $ 5,802,614 $ 10,156,547 $ 13,883,717
Goods transferred at a point in time 352,979 658,109 1,143,274
$ 6,155,593 $ 10,814,656 $ 15,026,991 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, 2023, in order to develop
non-English foreign language tutorial service for middle school students, the Company incurred total of approximately $2.4 million (RMB17.5
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 $2.4 million (RMB17.5 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, 2023, 2022 and 2021, the Company amortized related amount of $639,680, $1,141,544 and $1,097,346 into selling
expense, respectively. As of September 30, 2023 and 2022, the contract assets amounted to $423,532 and $333,314, 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, 2023 and 2022, the balance of deferred revenue amounted to $3,988,699 and $4,435,393, 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 courses. Refund liability estimates
are based on historical refund ratio on a portfolio basis using the expected value method. As of September 30, 2023 and 2022, refund
liability amounted to $333,030 and $237,691, respectively. Cost of revenues Cost of revenues mainly consists of renumeration
to instructors and tutors, rental expenses for office space and learning centers, canteen foods 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 thereto 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,
2023, 2022 and 2021, government subsidies income amounted to $853,444, $ 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, 2023, 2022 and 2021, the advertising expenses amounted to $211,769, $276,767 and $247,952, respectively. Operating leases The Company adopted Topic 842 on October 1, 2022
using the modified retrospective transition approach. The Company has operating lease contracts for office space. The Company determines
whether an arrangement constitutes a lease and records lease liabilities and right-of-use assets on its consolidated balance sheets at
lease commencement. The Company measures its lease liabilities based on the present value of the total lease payments not yet paid discounted
based on the more readily determinable of the rate implicit in the lease or its incremental borrowing rate, which is the estimated rate
the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease. The
Company estimates its incremental borrowing rate based on an analysis of weighted average interest rate of its own bank loans. The Company
measures right-of-use assets based on the corresponding lease liability adjusted for payments made to the lessor at or before the commencement
date, and initial direct costs it incurs under the lease. The Company begins recognizing lease expense when the lessor makes the underlying
asset available to the Company. For leases with lease term less than one year
(short-term leases), the Company records operating lease expense in its consolidated statements of operations on a straight-line basis
over the lease term and record variable lease payments as incurred. 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 13%, 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, 2023 and 2022, there are $2,639,258 and
$2,573,830 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, 2023, 2022 and 2021.
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 employee benefit expenses in the period during which services are rendered by employees. (Loss) earnings 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. Share-based compensation The Company follows the provisions of ASC 718, “Compensation
- Stock Compensation,” which establishes the accounting for employee and non-employee share-based awards. For employee share-based
awards, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense
with graded vesting on a straight-line basis over the requisite service period for the entire award. 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 consol |
