China Liberal Education Holdings Limited Reports Financial Results for Fiscal Year 2023
- Revenue decreased by 44.7% to $2.89 million in fiscal year 2023 compared to $5.22 million in fiscal year 2022.
- Gross profit decreased by 59.1% to $1.65 million in fiscal year 2023 from $4.03 million in fiscal year 2022.
- Loss from operations decreased by 40.0% to $0.93 million in fiscal year 2023 from $1.55 million in fiscal year 2022.
- Net loss increased by 193.6% to $4.96 million in fiscal year 2023 from $1.69 million in fiscal year 2022.
- Basic and diluted loss per share decreased by 14.9% to $1.65 in fiscal year 2023 from $1.94 in fiscal year 2022.
- Revenue decline due to termination of Sino-foreign Jointly Managed Academic Programs.
- Significant decrease in gross profit and gross margin.
- Increase in net loss for fiscal year 2023.
- Negative impact on basic and diluted loss per share.
Insights
The financial performance of China Liberal Education Holdings Limited unveils a sharp revenue decline of approximately 44.7% year-over-year. Analyzing these figures, one must consider the implications of strategic business decisions, particularly the discontinuation of Sino-foreign Jointly Managed Academic Programs, which significantly impacted revenue streams. While gross margins remain above the 50% threshold, a noteworthy industry benchmark, the precipitous drop to 57.1% from the previous year's 77.2% signals a concerning contraction in profitability. Stakeholders should weigh the surge in tailored job readiness training services and technological consulting revenues, which could indicate a pivot towards potentially lucrative sectors amidst restructuring.
From a liquidity perspective, the substantial increase in cash holdings to $20.34 million suggests improved fiscal fortitude. The net loss widening by an alarming ~193.6%, however, paints a grim picture for immediate financial health, exacerbated by a spike in interest expenses. The disclosed share transfer agreement could reconfigure debt obligations and enable strategic realignment but requires careful scrutiny regarding its eventual impact on the company's balance sheet.
China Liberal Education Holdings Limited's transition away from traditional academic programs towards job readiness and smart campus solutions reflects a strategic adaptation to market demands. The substantial growth rates in these emerging business lines (74.2% and 144.5% respectively) are indicative of a growing appetite for such services in China's educational sector. This pivot aligns with broader industry trends that emphasize technology integration and vocational training to enhance employability in a rapidly evolving job market.
Investors should consider the potential long-term benefits of this shift, despite the stumbling blocks encountered in the short term. The contraction in net loss per share, despite an overall increase in net loss, suggests a nuanced financial dynamic that factors in capital structure changes, possibly due to equity financing or adjustments in outstanding shares.
Ms. Ngai Ngai Lam, Chairwoman and CEO of China Liberal, commented, "Our revenue experienced a decline in fiscal year 2023 due to termination of education programs offered by joint ventures of the PRC and foreign institutions ("Sino-foreign Jointly Managed Academic Programs"), but we still managed to maintain a relatively high gross margin level at around
Fiscal Year 2023 Financial Highlights
For the Years Ended December 31, | |||||||
($ millions, except for percentages or per share data) | 2023 | 2022 | %Change | ||||
Revenue | 2.89 | 5.22 | (44.7 %) | ||||
Gross profit | 1.65 | 4.03 | (59.1 %) | ||||
Gross margin | 57.1 % | 77.2 % | (20.1pp) | ||||
Loss from operations | (0.93) | (1.55) | 40.0 % | ||||
Net loss | (4.96) | (1.69) | (193.6 %) | ||||
Basic and diluted loss per share | (1.65) | (1.94) | 14.9 % | ||||
Note: pp represents percentage points. | |||||||
- Revenue was
$2.89 million $5.22 million - Gross profit was
$1.65 million $4.03 million - Gross margins were
57.1% and77.2% for fiscal year 2023 and 2022, respectively. - Loss from operations was
$0.93 million $1.55 million - Net loss was
$4.96 million $1.69 million - Basic and diluted loss per share were
$1.65 $1.94
Fiscal Year 2023 Financial Results
Revenue
Revenue decreased by
The Company did not generate revenue from Sino-foreign Jointly Managed Academic Programs for fiscal year 2023. Revenue from Sino-foreign Jointly Managed Academic Programs was
Revenue from tailored job readiness training services increased by
The Company did not generate revenue from Overseas Study Consulting Services for fiscal year 2023. Revenue from Overseas Study Consulting Services was
Revenue from smart campus related technological consulting services and technical support services for other entities increased by
The Company did not generate revenue from textbooks and course material sales for fiscal year 2023. Revenue from textbooks and course material sales was
Cost of Revenue
Cost of revenue increased by
Gross Profit
Gross profit decreased by
Operating Expenses
Selling expenses decreased by
General and administrative expenses decreased by
Interest Expenses
Interest expenses increased by
Other Income (Expense)
Other income was
Income Tax Expenses
Income tax expenses were
Net Loss
Net loss was
Financial Condition
As of December 31, 2023, the Company had cash of
Net cash used in operating activities was
Net cash used in investing activities was
Net cash provided by financing activities was
Recent Development
On December 28, 2023, the Company entered into a share transfer agreement (the "Share Transfer Agreement") with Wanwang and Xiaoshi Huang, pursuant to which the Company agreed to transfer all of the equity interests in Wanwang to Xiaoshi Huang in consideration for
The Company expects the transactions to close on or before June 30, 2024.
About China Liberal Education Holdings Limited
China Liberal is an educational services provider headquartered in
Forward-Looking Statements
This document contains forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's expectations and projections about future events, which the Company derives from the information currently available to the Company. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those using terminology such as "may," "should," "expects," "anticipates," "contemplates," "estimates," "believes," "plans," "projected," "predicts," "potential," or "hopes" or the negative of these or similar terms. When evaluating these forward-looking statements, you should consider various factors, including our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this press release and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties, and assumptions about us. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as required by law. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can provide no assurance that these expectations will prove to be accurate, and it cautions investors that actual results may differ materially from the anticipated results. Investors are encouraged to review the risk factors that may affect future results in the Company's registration statement and in its other filings with the
Investor Relations Contact
China Liberal Education Holdings Limited
Email: ir@chinaliberal.com
Ascent Investor Relations LLC
Tina Xiao
President
Phone: +1 646-932-7242
Email: investors@ascent-ir.com
CHINA LIBERAL EDUCATION HOLDINGS LIMITED | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
As of | As of | |||||||
December | December | |||||||
2023 | 2022 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash | $ | 20,337,847 | $ | 12,121,824 | ||||
Account receivables, net | 1,453,230 | 954,603 | ||||||
Advance to suppliers | 3,521,176 | - | ||||||
Inventories, net | 167,493 | 193,738 | ||||||
Prepaid expenses and other current assets, net | 114,732 | 122,407 | ||||||
Receivable from disposal of subsidiaries | 40,000,000 | - | ||||||
Current assets from discontinued operations | - | 5,018,865 | ||||||
TOTAL CURRENT ASSETS | $ | 65,594,478 | $ | 18,411,437 | ||||
NON-CURRENT ASSETS | ||||||||
Goodwill on acquisitions | 6,747,543 | 9,481,547 | ||||||
Property and equipment, net | 5,157 | 19,785 | ||||||
Intangible assets, net | 351,680 | 423,272 | ||||||
Right-of-use assets | 102,509 | 13,107 | ||||||
Non-current assets from discontinued operations | - | 75,639,404 | ||||||
TOTAL NON-CURRENT ASSETS | $ | 7,206,889 | $ | 85,577,115 | ||||
TOTAL ASSETS | $ | 72,801,367 | $ | 103,988,552 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Account payables | $ | 571,432 | $ | 762,366 | ||||
Contract liabilities | 212,473 | 251,368 | ||||||
Short-term bank loan | 32,191 | 20,784 | ||||||
Taxes payable | 1,438,658 | 1,346,992 | ||||||
Due to related parties | 1,395,225 | 390,550 | ||||||
Lease liabilities | 63,410 | 10,887 | ||||||
Loans from third parties | 1,589,702 | 975,716 | ||||||
Accrued expenses and other current liabilities | 928,816 | 1,869,946 | ||||||
Current liabilities from discontinued operations | - | 14,359,841 | ||||||
TOTAL CURRENT LIABILITIES | $ | 6,231,907 | $ | 19,988,450 | ||||
NON-CURRENT LIABILITIES | ||||||||
Lease liabilities | 32,525 | - | ||||||
Non-current liabilities from discontinued operations | - | 21,515,801 | ||||||
TOTAL LIABILITIES | $ | 6,264,432 | $ | 41,504,251 | ||||
COMMITMENTS AND CONTINGENCIES | ||||||||
SHAREHOLDERS' EQUITY | ||||||||
Ordinary shares, | $ | 5,028 | $ | 3,228 | ||||
Additional paid-in capital* | 72,142,580 | 63,219,380 | ||||||
Statutory reserve | 1,006,384 | 1,006,384 | ||||||
Accumulated deficits | (6,786,949) | (1,828,205) | ||||||
Accumulated other comprehensive income | 169,892 | 83,514 | ||||||
Total shareholders' equity | $ | 66,536,935 | $ | 62,484,301 | ||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 72,801,367 | $ | 103,988,552 | ||||
* Retrospectively restated for effect of share re-designation on November 30, 2023 and 1-for-15 reverse share split on January 19, 2024.
CHINA LIBERAL EDUCATION HOLDINGS LIMITED | ||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||||||||||
For the years ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
REVENUE | $ | 2,886,222 | $ | 5,218,283 | $ | 3,909,546 | ||||||
COST OF REVENUE | (1,235,370) | (1,184,185) | (1,149,148) | |||||||||
GROSS PROFIT | 1,650,852 | 4,034,098 | 2,760,398 | |||||||||
OPERATING EXPENSES | ||||||||||||
Allowance for doubtful accounts | 329,589 | (734,750) | - | |||||||||
Selling expenses | (230,061) | (282,099) | (152,759) | |||||||||
General and administrative expenses | (2,684,903) | (4,566,187) | (3,778,329) | |||||||||
Total operating expenses | (2,585,375) | (5,583,036) | (3,931,088) | |||||||||
LOSS FROM OPERATIONS | (934,523) | (1,548,938) | (1,170,690) | |||||||||
OTHER (EXPENSES) INCOME | ||||||||||||
Goodwill impairment | (2,734,004) | - | - | |||||||||
Interest income | 2,043 | 10,155 | 94,195 | |||||||||
Interest expenses | (289,677) | (136,588) | (3,145) | |||||||||
Government subsidy income | 11,254 | 6,887 | - | |||||||||
Other income, net | 122,828 | (149,728) | 129,793 | |||||||||
Total other (expenses) income, net | (2,887,556) | (269,274) | 220,843 | |||||||||
Loss before income taxes | (3,822,079) | (1,818,212) | (949,847) | |||||||||
Income tax expenses | (1,973) | (460,040) | (300,034) | |||||||||
Net loss from continuing operations | $ | (3,824,052) | $ | (2,278,252) | $ | (1,249,881) | ||||||
Discontinued operations | ||||||||||||
Net (loss) income from discontinued operations, net of | (1,134,692) | 589,349 | - | |||||||||
Net loss | $ | (4,958,744) | $ | (1,688,903) | $ | (1,249,881) | ||||||
COMPREHENSIVE INCOME (LOSS) | ||||||||||||
Total currency translation differences arising from | 86,378 | (307,633) | 232,001 | |||||||||
TOTAL COMPREHENSIVE LOSS | $ | (4,872,366) | $ | (1,996,536) | $ | (1,017,880) | ||||||
Loss per share | ||||||||||||
Basic and diluted | $ | (1.65) | $ | (1.94) | $ | (1.81) | ||||||
Weighted average number of shares outstanding | ||||||||||||
Basic and diluted | 2,321,643 | 1,175,156 | 691,238 | |||||||||
* Retrospectively restated for effect of share re-designation on November 30, 2023 and 1-for-15 reverse share split on January 19, 2024.
CHINA LIBERAL EDUCATION HOLDINGS LIMITED | ||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
For the years ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Cash flows from operating activities | ||||||||||||
Net loss | $ | (4,958,744) | $ | (1,688,903) | $ | (1,249,881) | ||||||
Net (loss) income from discontinued operations | $ | (1,134,692) | $ | 589,349 | - | |||||||
Net loss from continuing operations | $ | (3,824,052) | $ | (2,278,252) | $ | (1,249,881) | ||||||
Adjustments to reconcile net loss to net cash (used in) | ||||||||||||
Allowance for accounts receivable | (413,669) | 611,819 | - | |||||||||
Allowance for inventory | 18,975 | 5,392 | 1,101 | |||||||||
Allowance for prepaid expenses and other current | 65,105 | 122,930 | - | |||||||||
Depreciation of property and equipment | 10,657 | 47,056 | 18,652 | |||||||||
Amortization of intangible assets | 63,111 | 32,365 | - | |||||||||
Loss on disposal of subsidiaries | 2,285,309 | - | - | |||||||||
Non-cash lease expenses | 37,399 | 86,911 | 91,386 | |||||||||
Loss from disposal of property and equipment | - | - | 607 | |||||||||
Share-based compensation | - | 2,832,500 | 2,288,251 | |||||||||
Goodwill impairment | 2,734,004 | - | - | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable, net | 3,560,308 | 1,416,032 | (1,504,828) | |||||||||
Contract receivable, net | - | 1,898,236 | 2,781,603 | |||||||||
Advance to suppliers | (3,530,625) | 4,262,151 | (4,355,926) | |||||||||
Inventories net | 1,794 | (13,760) | (9,469) | |||||||||
Prepaid expenses and other current assets | (60,837) | (54,548) | 33,653 | |||||||||
Accounts payable | (169,622) | (400,750) | 40,239 | |||||||||
Contract liabilities | (974,788) | 654,742 | 462,253 | |||||||||
Taxes payable | 130,472 | 642,372 | 90,150 | |||||||||
Lease liabilities | (41,829) | 97,222 | (67,754) | |||||||||
Accrued expenses and other current liabilities | (272,172) | 35,656 | (40,842) | |||||||||
Net cash provided by (used in) operating activities | (380,460) | 9,998,074 | (1,420,805) | |||||||||
Net cash used in operating activities from | (3,404,155) | (9,574,477) | - | |||||||||
Net cash (used in) provided by operating activities | (3,784,615) | 423,597 | (1,420,805) | |||||||||
Cash flows from investing activities | ||||||||||||
Purchase of property and equipment | - | - | (4,439) | |||||||||
Prepayment for acquisitions | - | - | (1,474,217) | |||||||||
Acquisitions of subsidiaries, net of cash | - | (31,938,273) | - | |||||||||
Disposal of subsidiaries, net of cash | (2,173,659) | - | - | |||||||||
Repayment of advance from related parties | - | - | 1,471,113 | |||||||||
Net cash used in investing activities from | (2,173,659) | (31,938,273) | (7,543) | |||||||||
Net cash used in investing activities from | (63,930) | (612,955) | - | |||||||||
Net cash used in investing activities | (2,237,589) | (32,551,228) | (7,543) | |||||||||
Cash flows from financing activities | ||||||||||||
Proceeds from advance from a related party | 320,041 | - | 9,415 | |||||||||
Proceeds from loans from third parties | 1,336,837 | 996,610 | - | |||||||||
Repayment of loans from third parties | (313,177) | - | - | |||||||||
Repayment of due to a related party | - | (91,308) | - | |||||||||
Proceeds from short-term bank loans | 26,155 | - | - | |||||||||
Net proceeds from issuance of ordinary shares | 8,925,000 | 11,989,949 | 29,047,088 | |||||||||
Net cash provided by financing activities from | 10,294,856 | 12,895,251 | 29,056,503 | |||||||||
Net cash provided by financing activities from | 2,422,573 | - | - | |||||||||
Net cash provided by financing activities | 12,717,429 | 12,895,251 | 29,056,503 | |||||||||
Effect of changes of foreign exchange rates on cash | (7,449) | 204,030 | 34,250 | |||||||||
Net increase (decrease) in cash | 6,687,776 | (19,028,350) | 27,662,405 | |||||||||
Cash, beginning of year | 13,650,071 | 32,678,421 | 5,007,449 | |||||||||
Cash, end of year | $ | 20,337,847 | $ | 13,650,071 | $ | 32,678,421 | ||||||
Reconciliation of cash, beginning of year | ||||||||||||
Cash from continuing operations | $ | 12,121,824 | $ | 32,678,421 | $ | 5,007,449 | ||||||
Cash from discontinued operations | 1,528,247 | - | - | |||||||||
Cash, beginning of year | $ | 13,650,071 | $ | 32,678,421 | $ | 5,007,449 | ||||||
Reconciliation of cash, end of year | ||||||||||||
Cash from continuing operations | $ | 20,337,847 | $ | 12,121,824 | $ | 32,678,421 | ||||||
Cash from discontinued operations | - | 1,528,247 | - | |||||||||
Cash, end of year | $ | 20,337,847 | $ | 13,650,071 | $ | 32,678,421 | ||||||
Supplemental disclosure of cash flow information: | ||||||||||||
Cash paid for interest expense | $ | 2,648 | $ | 2,399 | $ | 40,555 | ||||||
Cash paid for income tax | - | - | - | |||||||||
Supplemental disclosure of non-cash investing and | ||||||||||||
Right-of-use assets obtained in exchange for | $ | 61,988 | - | - | ||||||||
Acquisition in the form of shares | - | $ | 7,700,000 | - | ||||||||
View original content:https://www.prnewswire.com/news-releases/china-liberal-education-holdings-limited-reports-financial-results-for-fiscal-year-2023-302117213.html
SOURCE China Liberal Education Holdings Limited
FAQ
What was the revenue for China Liberal Education Holdings in fiscal year 2023?
What was the gross profit for China Liberal Education Holdings in fiscal year 2023?
What was the net loss for China Liberal Education Holdings in fiscal year 2023?
What was the basic and diluted loss per share for China Liberal Education Holdings in fiscal year 2023?
What caused the revenue decline for China Liberal Education Holdings in fiscal year 2023?
What services experienced revenue growth for China Liberal Education Holdings in fiscal year 2023?
