MIDDLETOWN, Ohio, Jan. 23,
2023 /PRNewswire/ -- EpicQuest Education Group
International Limited (NASDAQ: EEIQ), (the "Company" or
"EpicQuest Education Group International"), a provider of
comprehensive education solutions for domestic and international
students interested in college and university programs in the US,
Canada and the UK, today announced
its financial results for the twelve months ended September 30, 2022.
"We are pleased to report a 19%
increase in revenue for fiscal year 2022 as compared to fiscal year
2021. We saw in-person attendance continue to
normalize at the English Language Program at the regional campuses
of Miami University relative to our
strategic pivot to remote learning in previous periods attributable
to the disruptive effects of the Covid-19 pandemic.
While our operating performance was stronger than that in the
previous fiscal year, the Company is still in the process of
recovering from the significant impact of Covid-19 over the past
two and a half years. As our acquired colleges contribute to our
financial results in future periods, and as we realize cost
synergies, we are optimistic that our financial performance will
improve over time," commented Jianbo
Zhang, Chairman and Chief Executive Officer of EpicQuest
Education.
"We are committed to our growth strategy of
international expansion. Davis College entered into seven educational
relationships with international universities in 2022, and we
expanded our recruiting efforts to further internationalize our
student body. We believe that our strategic plan will optimally
grow the company and lead to superior educational outcomes for our
students. Davis College and EduGlobal
College both offer a cost-effective and practical education for our
students, and combined with our pathway programs, enable advanced
degrees and expanded career options," continued CEO Jianbo Zhang.
"We continue to engage in vigorous marketing and
recruitment activities for all of our educational programs.
Since January 2023, we
have held more than 70 online promotional and training sessions,
including business training with partners and live broadcast
activities for potential students. We have also increased the
number and variety of online activities that include online
guidance classes and online service training sessions to spur
student enrollment rates," concluded CEO
Jianbo Zhang.
First Half 2022 Financial Results Ended September 30, 2022
Revenues were $6.3 million for the fiscal year ended
September 30, 2022 compared to
$5.3 million for the twelve
months ended September 30, 2021,
representing an increase of $1.0
million, or 18.9%. The increase was due to a
rise in student registration at the regional campuses
of Miami University ("the
MU Regional Campuses").
Gross profit was
$4.3 million for the fiscal
year ended September 30, 2022
compared to $3.4 million for the
twelve months ended September 30, 2021,
representing an increase of $0.9
million, or 26.5%. Our gross margin increased
to 68.1% in fiscal 2022 from 63.8% for the twelve months of
2021 due to higher revenue and a lower direct costs
attributable to operational efficiencies.
Operating Expenses
were $11.5
million for the fiscal year ended September 30, 2022 compared to $4.9 million for the twelve months
ended September 30, 2021, representing an
increase of $6.6 million, or
134.7%. The increase was partly due to
higher general and administrative expenses which
included a non-cash expense attributable to share-based
compensation granted to directors, officers and employees for
retention purposes following the Company's IPO in March of 2021, as
well as an increase in the professional fees that are mainly
related to the Company's two major acquisitions and expansion
efforts.
Operating loss was $7.2 million for the fiscal year ended
September 30, 2022 compared to an
operating loss of $1.5 million for
the twelve months ended September 30,
2021. This was due to higher general and
administrative expenses that offset the increases in revenue and
gross margin for the twelve months ended September 30, 2022.
Other income was $0.85 million for the fiscal year ended
September 30, 2022 compared to
$0.08 million for the twelve months
ended September 30, 2021,
attributable to the sale of residential properties adjacent to the
MU Regional Campuses at a sales price of approximately 150% of its
initial purchase price.
Net loss was $6.2 million for the fiscal year ended
September 30, 2022 compared to a net
loss of $1.1 million for the twelve
months ended September 30, 2021,
due to the factors discussed above.
Net Loss Per Basic and Diluted Share
for the fiscal year ended September
30, 2022 was $0.55 compared to
a net loss of $0.12 per basic and
diluted share for the twelve months ended September
30, 2021.
Financial Condition
As of September 30, 2022,
the Company had $11.4 million in cash
and cash equivalents, a decrease of
$5.1 million as compared to
$16.5 million as of September 30, 2021. As of September 30, 2022, working capital was
$8.0 million (current assets minus
current liabilities) and the current ratio (current assets divided
by current liabilities) was 2.3, as compared to working capital of
$11.0 million and a current ratio
of 2.3 as of September 30, 2021. Stockholders' equity as of
September 30, 2022 was $15.1 million, an increase of $0.2 million as compared to $14.9 million as of September 30, 2021.
Liquidity and Capital Resources
Net cash used in operating activities for the twelve
months ended September 30, 2022 was $4.6 million as
compared to cash provided from operations of $0.3 million for the twelve months
ended September 30, 2021. The increase was primarily due to
the changes in net loss and other working capital balances; the
changes in these balances are included in the changes in assets and
liabilities presented in the consolidated statement of cash
flows.
Net cash used in investing activities was $0.7 million and $0.5
million for the twelve months ended September 30, 2022 and 2021, respectively. The
net cash used in investing activities for fiscal 2022 was
attributable to $1.9 million for
business acquisitions which was offset by $1.9 million in proceeds from the sale of
property and equipment.
Net cash provided from financing activities was
$0.2 million and $9.3 million for the twelve months ended
September 30,
2022 and 2021, respectively.
About EpicQuest
Education Group International Limited
EpicQuest Education Group International Limited
("EpicQuest Education" or the "Company"), through its subsidiaries
Quest Holding International LLC and Highrim Holding International
Limited, provides comprehensive education solutions for domestic
and international students interested in university and college
degree programs in the US, Canada
and the UK. Through its wholly-owned subsidiary in Canada Highrim Holding International Limited,
the Company owns 80% of the equity of EduGlobal College, based in
British Columbia, Canada, which
focuses on English proficiency educational programming for students
pursuing academic degrees. The Company owns 70% of the equity of
Ameri-Can Education Group Corporation, the holding company of
Davis College, a career training
college located in Toledo, Ohio.
In addition, the Company has a recruiting relationship with the
Miami University Regional Campuses,
where it maintains residential facilities, a full-service
cafeteria, recreational facilities, shuttle buses and an office for
the regional campuses that provides study abroad and post-study
services for its students; these facilities are not owned,
maintained, operated or are a part of Miami
University. The Company also acts as a recruiting agent for
the University of the West of Scotland (through The Education Group
(London) Ltd) and Coventry University, both of which are located
in the UK. For more information, please
visit https://www.epicquesteducation.com/.
Safe Harbor Statement
Certain of the statements made in this press release are
"forward-looking statements" within the meaning and protections of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements in this press release include, without
limitation, the Company's ability to implement its international
strategy as described. Forward-looking statements include
statements with respect to our beliefs, plans, objectives, goals,
expectations, anticipations, assumptions, estimates, intentions,
and future performance, and involve known and unknown risks,
uncertainties and other factors, which may be beyond our control,
and which may cause the actual results, performance, capital,
ownership or achievements of the Company to be materially different
from future results, performance or achievements expressed or
implied by such forward-looking statements. All statements other
than statements of historical fact are statements that could be
forward-looking statements. You can identify these forward-looking
statements through our use of words such as "may," "will,"
"anticipate," "assume," "should," "indicate," "would," "believe,"
"contemplate," "expect," "estimate," "continue," "plan," "point
to," "project," "could," "intend," "target" and other similar words
and expressions of the future.
All written or oral forward-looking statements
attributable to us are expressly qualified in their entirety by
this cautionary notice, including, without limitation, those risks
and uncertainties described in our most recent Form 20-F and
otherwise in our SEC reports and filings. Such reports are
available upon request from the Company, or from the Securities and
Exchange Commission, including through the SEC's Internet website
at http://www.sec.gov. We have no obligation and do not undertake
to update, revise or correct any of the forward-looking statements
after the date hereof, or after the respective dates on which any
such statements otherwise are made.
Contacts:
EpicQuest Education Group International Limited
+1
513-649-8350
ir@eei-global.net
Investor Relations:
Precept Investor Relations LLC
David Rudnick
+1 646-694-8538
david.rudnick@preceptir.com
FINANCIAL TABLES FOLLOW
EPICQUEST EDUCATION
INTERNATIONAL CO., LTD
CONSOLIDATED BALANCE
SHEETS
AS OF SEPTEMBER 30,
2022 and SEPTEMBER 30, 2021
(US$, except share
data and per share data, or otherwise noted)
|
|
|
|
September 30,
2022
|
|
|
September 30,
2021
|
|
|
|
US$
|
|
|
US$
|
|
Assets
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
11,443,059
|
|
|
|
16,537,174
|
|
Accounts
receivables
|
|
|
47,639
|
|
|
|
154,537
|
|
Prepaid
expenses
|
|
|
946,299
|
|
|
|
1,560,847
|
|
Notes
receivable
|
|
|
485,000
|
|
|
|
180,000
|
|
Income tax
receivable
|
|
|
1,147,213
|
|
|
|
1,149,506
|
|
Total current
assets
|
|
|
14,069,210
|
|
|
|
19,582,064
|
|
Non-current
assets
|
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
|
2,205,084
|
|
|
|
3,479,922
|
|
Long term
investment
|
|
|
5,086,413
|
|
|
|
-
|
|
Deferred income tax
assets
|
|
|
411,934
|
|
|
|
321,057
|
|
Intangible
assets
|
|
|
398,794
|
|
|
|
-
|
|
Right-of-use
assets
|
|
|
976,404
|
|
|
|
626,596
|
|
Goodwill
|
|
|
854,887
|
|
|
|
-
|
|
Total
assets
|
|
|
24,002,726
|
|
|
|
24,009,639
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and
other liabilities
|
|
|
2,120,660
|
|
|
|
2,960,915
|
|
Student
deposits
|
|
|
46,040
|
|
|
|
681,818
|
|
Due to related
party
|
|
|
140,000
|
|
|
|
140,000
|
|
Lease liabilities –
current
|
|
|
461,161
|
|
|
|
259,297
|
|
Deferred
revenue
|
|
|
3,286,350
|
|
|
|
4,569,664
|
|
Total current
liabilities
|
|
|
6,054,211
|
|
|
|
8,611,694
|
|
Non-current
liabilities
|
|
|
|
|
|
|
|
|
Lease liabilities – non
current
|
|
|
561,897
|
|
|
|
461,997
|
|
Deferred income tax
liabilities
|
|
|
107,674
|
|
|
|
-
|
|
Total
liabilities
|
|
|
6,723,782
|
|
|
|
9,073,691
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
|
|
Common shares,
US$0.0015873 par value, 31,500,000 shares authorized,
11,350,704 and 10,412,843 shares issued and
outstanding as of
September 30, 2022 and 2021,
respectively
|
|
|
18,017
|
|
|
|
16,528
|
|
Additional paid-in
capital
|
|
|
17,526,546
|
|
|
|
11,464,979
|
|
Subscription
receivable
|
|
|
-
|
|
|
|
(200,000)
|
|
Retained earnings
(deficit)
|
|
|
(2,416,788)
|
|
|
|
3,654,441
|
|
Accumulated other
comprehensive loss
|
|
|
(28,939)
|
|
|
|
-
|
|
Total shareholders'
equity
|
|
|
15,098,836
|
|
|
|
14,935,948
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
2,180,108
|
|
|
|
-
|
|
Total liabilities
and shareholders' equity
|
|
|
24,002,726
|
|
|
|
24,009,639
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AVAILABLE VIA
FORM 20-F FILED WITH THE SEC
EPICQUEST EDUCATION
INTERNATIONAL CO., LTD
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE TWELVE
MONTHS ENDED SEPTEMBER 30, 2022, 2021 AND 2020
(US$, except share
data and per share data, or otherwise noted)
|
|
|
|
September 30,
2022
|
|
|
September 30,
2021
|
|
|
September 30,
2020
|
|
|
|
US$
|
|
|
US$
|
|
|
US$
|
|
Revenues
|
|
|
6,330,428
|
|
|
|
5,341,850
|
|
|
|
9,063,137
|
|
Costs of
services
|
|
|
2,021,058
|
|
|
|
1,934,237
|
|
|
|
2,342,276
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
4,309,370
|
|
|
|
3,407,613
|
|
|
|
6,720,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling expenses
|
|
|
952,888
|
|
|
|
1,732,758
|
|
|
|
2,310,188
|
|
General and
administrative
|
|
|
10,521,551
|
|
|
|
3,148,256
|
|
|
|
3,115,120
|
|
Total operating
costs and expenses
|
|
|
11,474,439
|
|
|
|
4,881,014
|
|
|
|
5,425,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
|
(7,165,069)
|
|
|
|
(1,473,401)
|
|
|
|
1,295,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income)
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
(819,135)
|
|
|
|
(71,640)
|
|
|
|
(55,000)
|
|
Interest
income
|
|
|
(26,463)
|
|
|
|
(9,537)
|
|
|
|
(35,293)
|
|
Foreign exchange
gain
|
|
|
-
|
|
|
|
(743)
|
|
|
|
(23,262)
|
|
Total other (income)
expenses
|
|
|
(845,598)
|
|
|
|
(81,920)
|
|
|
|
(113,555)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
provision for income taxes
|
|
|
(6,319,471)
|
|
|
|
(1,391,481)
|
|
|
|
1,409,108
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current income tax
expense (recovery)
|
|
|
16,459
|
|
|
|
13,889
|
|
|
|
397,553
|
|
Deferred income tax
expense (recovery)
|
|
|
(99,814)
|
|
|
|
(321,057)
|
|
|
|
-
|
|
Income taxes expense
(recovery)
|
|
|
(83,355)
|
|
|
|
(307,168)
|
|
|
|
397,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
|
(6,236,116)
|
|
|
|
(1,084,313)
|
|
|
|
1,011,555
|
|
Net income (loss)
attributable to non-controlling interest
|
|
|
(164,887)
|
|
|
|
-
|
|
|
|
-
|
|
Net income (loss)
attributable to common stockholders
|
|
|
(6,071,229)
|
|
|
|
(1,084,313)
|
|
|
|
1,011,555
|
|
Unrealized foreign
currency translation adjustment
|
|
|
(28,939)
|
|
|
|
-
|
|
|
|
-
|
|
Comprehensive
income
|
|
|
(6,265,055)
|
|
|
|
(1,084,313)
|
|
|
|
1,011,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic & diluted
net income per share
|
|
$
|
(0.55)
|
|
|
$
|
(0.12)
|
|
|
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares-basic and diluted
|
|
|
11,010,240
|
|
|
|
9,160,447
|
|
|
|
7,938,000
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AVAILABLE VIA
FORM 20-F FILED WITH THE SEC
EPICQUEST EDUCATION
INTERNATIONAL CO., LTD
CONSOLIDATED
STATEMENTS OF CASH FLOWS
FOR THE TWELVE
MONTHS ENDED SEPTEMBER 30, 2022, 2021 AND 2020
(US$, except share
data and per share data, or otherwise noted)
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2022
|
|
|
2021
|
|
|
2020
|
|
|
|
US$
|
|
|
US$
|
|
|
US$
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
|
(6,236,116)
|
|
|
|
(1,084,313)
|
|
|
|
1,011,555
|
|
Adjustments for items not affecting cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
252,097
|
|
|
|
126,234
|
|
|
|
87,593
|
|
Share-based
compensation
|
|
|
4,813,049
|
|
|
|
-
|
|
|
|
-
|
|
Non-cash adjustment to
lease expenses
|
|
|
(25,643)
|
|
|
|
94,698
|
|
|
|
-
|
|
Deferred income tax
expense
|
|
|
(99,814)
|
|
|
|
(321,057)
|
|
|
|
-
|
|
Gain from disposal of
fixed assets
|
|
|
(813,064)
|
|
|
|
(4,000)
|
|
|
|
-
|
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
118,608
|
|
|
|
(5,176)
|
|
|
|
89,521
|
|
Prepaid
expenses
|
|
|
614,548
|
|
|
|
71,800
|
|
|
|
428,592
|
|
Long-term prepaid
expenses
|
|
|
-
|
|
|
|
159,382
|
|
|
|
584,356
|
|
Accounts payable &
accrued liabilities
|
|
|
(1,320,563)
|
|
|
|
1,117,184
|
|
|
|
545,606
|
|
Deferred
revenue
|
|
|
(1,283,314)
|
|
|
|
961,426
|
|
|
|
(3,221,807)
|
|
Income tax
receivable
|
|
|
2,293
|
|
|
|
(480,866)
|
|
|
|
(664,399)
|
|
Student
deposits
|
|
|
(635,778)
|
|
|
|
(313,122)
|
|
|
|
994,940
|
|
Net cash provided from
(used in) operating activities
|
|
|
(4,613,697)
|
|
|
|
322,190
|
|
|
|
(144,043)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
|
|
(51,410)
|
|
|
|
(618,529)
|
|
|
|
(288,555)
|
|
Notes
receivable
|
|
|
(305,000)
|
|
|
|
100,000
|
|
|
|
-
|
|
Long-term
investment
|
|
|
(270,000)
|
|
|
|
-
|
|
|
|
-
|
|
Net cash used for
business acquisitions
|
|
|
(1,945,931)
|
|
|
|
-
|
|
|
|
-
|
|
Proceeds from sale of
fixed assets
|
|
|
1,920,861
|
|
|
|
4,000
|
|
|
|
-
|
|
Net cash used in
investing activities
|
|
|
(651,480)
|
|
|
|
(514,529)
|
|
|
|
(288,555)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred costs related
to initial public offering
|
|
|
-
|
|
|
|
-
|
|
|
|
(432,035)
|
|
Share issuances, net of
issuance costs
|
|
|
200,000
|
|
|
|
9,321,523
|
|
|
|
-
|
|
Net cash provided from
(used in) financing activities
|
|
|
200,000
|
|
|
|
9,321,523
|
|
|
|
(432,035)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
|
(28,938)
|
|
|
|
-
|
|
|
|
-
|
|
Net increase/(decrease)
in cash, cash equivalents
|
|
|
(5,094,115)
|
|
|
|
9,129,184
|
|
|
|
(864,633)
|
|
Cash and cash
equivalents, beginning of period
|
|
|
16,537,174
|
|
|
|
7,407,990
|
|
|
|
8,272,623
|
|
Cash and cash
equivalents, end of period
|
|
|
11,443,059
|
|
|
|
16,537,174
|
|
|
|
7,407,990
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE
OF CASH FLOWS INFORMATION:
|
|
|
|
|
|
|
|
|
|
Interest
paid
|
|
-
|
|
|
-
|
|
|
-
|
|
Income taxes
paid
|
|
|
14,166
|
|
|
|
490,250
|
|
|
|
1,053,360
|
|
Non-cash investing
activities – acquisition of operating lease
right-of-used assets
|
|
|
574,483
|
|
|
|
-
|
|
|
|
-
|
|
Non-cash investing
activities – assumption of operating lease
obligation
|
|
|
574,483
|
|
|
|
-
|
|
|
|
-
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AVAILABLE VIA
FORM 20-F FILED WITH THE SEC
Source: EpicQuest Education Group International
Limited
View original content to download
multimedia:https://www.prnewswire.com/news-releases/epicquest-education-announces-fiscal-year-end-2022-financial-results-301728537.html
SOURCE EpicQuest Education Group International Limited