Skillful Craftsman Education Technology Ltd F-1/A, filed Jun 26, 2020

Skillful Craftsman Education Technology Ltd (EDTK)

F-1/A 2020-06-26

View Original

Added on October 16, 2026

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

Cayman Islands		8200		Not Applicable
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification number No.)

Title of the Class of Securities to be Registered	Amount to be registered		Proposed maximum aggregate offering price per unit		Proposed Maximum Aggregate Offering Price⁽¹⁾		Amount of Registration Fee⁽⁵⁾
Ordinary shares, par value $0.0002 per share ⁽²⁾		3,450,000	$	5.50	$	18,975,000	$	2,462.96
Underwriter Warrants ⁽³⁾					$	-	$	-
Ordinary shares underlying Underwriter Warrants ^{(2) (4)}		172,500	$	6.60	$	1,138,500	$	147.78
Total		3,622,500			$	20,113,500	$	2,610.74

(1)	Estimated solely for the purpose of calculating the registration fee under Rule 457(o) of the Securities Act of 1933, as amended (the “Securities Act”). Includes ordinary shares that are issuable upon the exercise of the over-allotment option of The Benchmark Company LLC).

(2)	Pursuant to Rule 416 under the Securities Act, the securities being registered hereunder include such indeterminate number of additional ordinary shares as may be issued after the date hereof as a result of share sub-divisions, share capitalization or similar transactions.

(3)	In accordance with Rule 457(g) under the Securities Act, because the registrant’s ordinary shares underlying the Underwriter’s warrants (“Underwriter Warrants”) are registered hereby, no separate registration fee is required with respect to the warrants registered hereby.

(4)	As estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(g) under the Securities Act. We have agreed to issue to the representative of the underwriters, upon closing of this offering, the Underwriter Warrants exercisable for a period of five years from the effective date of this registration statement entitling the representative to purchase up to 5% of the number of shares sold in this offering at a per share exercise price equal to 120% of the public offering price. The Registration Statement of which this prospectus is a part also covers ordinary shares issuable upon the exercise thereof. See “Underwriting.” As estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(g) under the Securities Act, the proposed maximum aggregate offering price of the ordinary shares underlying the Underwriter Warrants is $1,138,500 (which is equal to 120% of $5.50 multiplied by 172,500 shares).

(5)	Previously paid.

	Per Share	Total
Public offering price	$	$
Underwriting fee and commissions^{(1) (2)}	$	$
Proceeds to us, before expenses	$	$

		Page
PROSPECTUS SUMMARY		5
RISK FACTORS		13
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA		46
USE OF PROCEEDS		47
CAPITALIZATION		48
DILUTION		49
ENFORCEABILITY OF CIVIL LIABILITIES		50
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA		52
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		54
CORPORATE HISTORY AND STRUCTURE		60
INDUSTRY OVERVIEW		62
BUSINESS		66
REGULATION		76
MANAGEMENT		86
PRINCIPAL SHAREHOLDERS		90
RELATED PARTY TRANSACTIONS		91
DESCRIPTION OF SHARE CAPITAL		92
SHARES ELIGIBLE FOR FUTURE SALE		98
TAXATION		99
UNDERWRITING		106
EXPENSES RELATING TO THIS OFFERING		112
LEGAL MATTERS		112
EXPERTS		112
WHERE YOU CAN FIND ADDITIONAL INFORMATION		112
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS		F-1

The Benchmark Company	Axiom Capital Management, Inc.

Prime Number Capital

	·	we are not required to provide as many Exchange Act reports, or as frequently, as a domestic public company;

	·	for interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies;

	·	we are not required to provide the same level of disclosure on certain issues, such as executive compensation;

	·	we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information;

	·	we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; and

	·	we are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any “short-swing” trading transaction.

	For the six months ended September 30,						For the years ended March 31,
	2019			2018			2019			2018
Revenue	$	13,420,883		$	11,122,248		$	24,668,840		$	14,910,543
Cost of revenue		(5,350,363	)		(3,739,458	)		(9,458,559	)		(4,715,419	)
Gross profit		8,070,520			7,382,790			15,210,281			10,195,124

Operating expenses:
Selling and marketing expenses		(776,903	)		(738,515	)		(1,832,006	)		(1,148,375	)
General and administrative expenses		(473,802	)		(633,181	)		(1,899,110	)		(1,108,280	)
Total operating expenses		(1,250,705	)		(1,371,696	)		(3,731,116	)		(2,256,655	)
Income from operations		6,819,815			6,011,094			11,479,165			7,938,469
Interest income		41,692			39,531			88,588			76,324
Others, net		(3,345	)		(64	)		(195	)		(114	)
Income before income taxes		6,858,162			6,050,561			11,567,558			8,014,679
Income tax expense		(1,724,099	)		(1,513,006	)		(2,892,500	)		(2,004,711	)
Net profit	$	5,134,063		$	4,537,555		$	8,675,058		$	6,009,968
Less: net profit attributable to non-controlling interests		-			-			-			-

Net profit attributable to Skillful Craftsman Education Technology Limited’s shareholders		5,134,063			4,537,555			8,675,058			6,009,968
Net earnings per ordinary share, basic and diluted		0.57			0.50			0.96			0.67
Weighted average number of ordinary shares, basic and diluted		9,000,000			9,000,000			9,000,000			9,000,000

Net profit	$	5,134,063		$	4,537,555			8,675,058		$	6,009,968
Other comprehensive (loss) /income:
Foreign currency translation adjustment		(1,020,318	)		(1,104,201	)		(735,192	)		722,635
Total comprehensive income		4,113,745			3,433,354			7,939,866			6,732,603

	As of September 30,		As of March 31,
	2019		2019		2018
Total current assets	$	13,717,726	$	11,716,226	$	5,069,793
Total assets		45,816,287		43,537,673		30,054,212
Total current liabilities		20,067,735		15,845,805		18,975,046
Total liabilities		22,683,510		24,518,641		18,975,046
Total Shareholders’ Equity		23,132,777		19,019,032		11,079,166

Securities being offered:		3,000,000 ordinary shares on a firm commitment basis.

Initial offering price:		We estimate the initial public offering price for the ordinary shares will be between $4.50 and $5.50 per ordinary share.

Number of ordinary shares outstanding before the offering:		9,000,000 ordinary shares.

Number of ordinary shares outstanding after the offering:		12,450,000 ordinary shares, assuming full exercise of the representative’s over-allotment option, and 12,000,000 ordinary shares, assuming no exercise of the over-allotment option.

Underwriters’ Over-Allotment Option		We have granted the representative of the underwriters an option for a period of up to 45 days to purchase up to 450,000 additional ordinary shares.

Use of proceeds:		We expect to receive net proceeds of approximately $13.01 million from this offering, assuming an initial public offering price of $5.00 per ordinary share (which is the midpoint of the estimated range of the initial public offering price shown on the cover page of this prospectus) and no exercise of the underwriters’ over-allotment option, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds of this offering for the development of additional online courses, vocational education mobile application and additional platforms for vocational education and related services. For more information on the use of proceeds, see “Use of Proceeds” on page 47.

Lock-up agreements		Our directors and officers and certain shareholders have agreed with the underwriter, subject to certain exceptions, not to sell, transfer or dispose of, directly or indirectly, any of our ordinary shares or securities convertible into or exercisable or exchangeable for our ordinary shares for a period of 12 months from the date of this prospectus. See “Shares Eligible for Future Sale” and “Underwriting” for more information.

Proposed Nasdaq symbol:		We have applied to have our ordinary shares listed on the Nasdaq under the symbol “EDTK.”

Risk factors:		Investing in our ordinary shares is highly speculative and involves a significant degree of risk. As an investor you should be able to bear a complete loss of your investment. You should carefully consider the information set forth in the “Risk Factors” section beginning on page 13.

	·	the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure;

	·	general economic, industry and market conditions in China;

	·	our emphasis on customer experience instead of near-term growth; and

	·	the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired technologies or businesses.

	·	difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products and services of the acquired business;

	·	inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits;

	·	difficulties in retaining, training, motivating and integrating key personnel;

	·	diversion of management’s time and resources from our normal daily operations;

	·	difficulties in successfully incorporating licensed or acquired technology and rights into our services;

	·	difficulties in retaining relationships with customers, employees and suppliers of the acquired business;

	·	regulatory risks; and

	·	liability for activities of the acquired business before the acquisition, including patent, copyright and trademark infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities.

	·	default and foreclosure on our assets if our operating revenue is insufficient to repay debt obligations;

	·	acceleration of obligations to repay the indebtedness (or other outstanding indebtedness), even if we make all principal and interest payments when due, if we breach any covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

	·	our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;

	·	diverting a substantial portion of cash flow to pay principal and interest on such debt, which would reduce the funds available for expenses, capital expenditures, acquisitions and other general corporate purposes; and

	·	creating potential limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate.

	·	imposing additional conditions or requirements with which we may not be able to comply with; or

	·	take other regulatory or enforcement actions against us that could be harmful to our business.

	As of September 30, 2019
Shareholders’ Equity	Actual			As adjusted
	($)
Ordinary shares, par value $0.0002 per share, 500,000,000 shares authorized; 9,000,000 shares issued and outstanding on an actual basis, 9,000,000 ordinary shares issued and outstanding on an adjusted basis and 3,000,000 ordinary shares to be issued in this offering		1,800			2,400
Additional paid-in capital		1,619,774			14,633,671
Statutory reserve		745,590			745,590
Accumulated Profits		22,080,010			22,080,010
Accumulated other comprehensive income/(loss)		(1,314,397	)		(1,314,397)
Total Shareholders’ Equity		23,132,777			36,147,274
Total Capitalization		23,132,777			36,147,274

	Per Ordinary Share
	($)
Assumed initial public offering price per ordinary share		5.00
Net tangible book value per ordinary share as of September 30, 2019		0.59
Pro forma as adjusted net tangible book value per ordinary share after giving effect to this offering		1.52
Amount of dilution in net tangible book value per ordinary share to new investors in this offering		3.48

	Ordinary Shares Purchased					Total Consideration					Average Price Per Ordinary
	Number		Percent			Amount		Percent			Share
Existing shareholders		9,000,000		75	%	$	23,132,777		61	%	$	2.57
New investors		3,000,000		25	%	$	15,000,000		39	%	$	5.00
Total		12,000,000		100	%	$	38,132,777		100	%		$

	·	political and economic stability;

	·	an effective judicial system;

	·	a favorable tax system;

	·	the absence of exchange control or currency restrictions; and

	·	the availability of professional and support services.

	For the six months ended September 30,						For the years ended March 31,
	(unaudited)
	2019			2018			2019			2018
Revenue	$	13,420,883		$	11,122,248		$	24,668,840		$	14,910,543
Cost of revenue		(5,350,363	)		(3,739,458	)		(9,458,559	)		(4,715,419	)
Gross profit		8,070,520			7,382,790			15,210,281			10,195,124

Operating expenses:
Selling and marketing expenses		(776,903	)		(738,515	)		(1,832,006	)		(1,148,375	)
General and administrative expenses		(473,802	)		(633,181	)		(1,899,110	)		(1,108,280	)
Total operating expenses		(1,250,705	)		(1,371,696	)		(3,731,116	)		(2,256,655	)
Income from operations		6,819,815			6,011,094			11,479,165			7,938,469
Interest income		41,692			39,531			88,588			76,324
Others, net		(3,345	)		(64	)		(195	)		(114	)
Income before income taxes		6,858,162			6,050,561			11,567,558			8,014,679
Income tax expense		(1,724,099	)		(1,513,006	)		(2,892,500	)		(2,004,711	)
Net profit	$	5,134,063		$	4,537,555		$	8,675,058		$	6,009,968
Less: net profit attributable to non-controlling interests		-			-			-			-
Net profit attributable to Skillful Craftsman Education Technology Limited’s shareholders		5,134,063			4,537,555			8,675,058			6,009,968

Net earnings per ordinary share, basic and diluted		0.57			0.50			0.96			0.67
Weighted average number of ordinary shares, basic and diluted		9,000,000			9,000,000			9,000,000			9,000,000

Net profit	$	5,134,063		$	4,537,555			8,675,058		$	6,009,968
Other comprehensive (loss) /income:
Foreign currency translation adjustment		(1,020,318	)		(1,104,201	)		(735,192	)		722,635
Total comprehensive income		4,113,745			3,433,354			7,939,866			6,732,603

	For the six months ended September 30,						For the years ended March 31,
	(unaudited)
	2019			2018			2019			2018
Net cash provided by operating activities	$	6,782,179		$	10,983,272		$	20,292,760		$	16,952,108
Net cash used in investing activities		(5,725,990	)		(9,232,500	)		(15,746,284	)		(15,073,518	)
Net cash provided by financing activities		-			-			-			-
Net increase in cash and cash equivalents		1,595,255			2,578,425			5,466,216			848,296
Cash and cash equivalents at beginning of period		10,362,283			4,896,067			4,896,067			4,047,771
Cash and cash equivalents at end of period		11,957,538			7,474,492			10,362,283			4,896,067

	For the fiscal year ended March 31, 2019		For the fiscal year ended March 31, 2018		Actual growth rate			Target growth rate
Number of Fee-Paying Members (1)		2,282,297		1,286,035		77	%		60	%
Revenue	$	24,668,840	$	14,910,543		65	%		50	%
Net Profit	$	8,675,058	$	6,009,968		44	%		30	%

	For the six months ended September 30, 2019		For the six months ended September 30, 2018		Actual growth rate			Target growth rate
Number of Fee-Paying Members (1)		2,566,202		1,629,960		57	%		50	%
Revenue	$	13,420,883	$	11,122,248		21	%		20	%
Net Profit	$	5,134,063	$	4,537,555		13	%		12	%

	For the Six Months Ended September 30,						Change
	2019			2018			Amount			%
Revenue	$	13,420,883		$	11,122,248		$	2,298,635			20.7	%
Cost of revenue		(5,350,363	)		(3,739,458	)		(1,610,905	)		43.1	%
Gross profit		8,070,520			7,382,790			687,730			9.3	%
Operating expenses
Sales and marketing expenses		(776,903	)		(738,515	)		(38,388	)		5.2	%
General and administrative expenses		(473,802	)		(633,181	)		159,379			-25.2	%
Total operating expense		(1,250,705	)		(1,371,696	)		120,991			-8.8	%
Other income (expenses)
Interest income		41,692			39,531			2,161			5.5	%
Others, net		(3,345	)		(64	)		(3,281	)		>100	%
								-
Income before tax		6,858,162			6,050,561			807,601			13.3	%
Income tax expense		(1,724,099	)		(1,513,006	)		(211,093	)		14.0	%
Net profit	$	5,134,063			4,537,555			596,508			13.1	%

	For six months ended September 30,
	2019			2018
Net cash provided by operating activities	$	6,782,179		$	10,983,272
Net cash used in investing activities		(5,725,990	)		(9,232,500	)
Net cash provided by financing activities		-			-
Effects of exchange rate changes on cash		539,066			827,653
Net cash inflow	$	1,595,255		$	2,578,425

Function	Number of Employees
Research and Development		17
Marketing		10
Finance and Accounting		7
General and administration		10

Total		44

Name	Age	Position with our company
Xiaofeng Gao	48	Chairman of the Board of Directors and Chief Executive Officer
Jun Liu	43	Chief Financial Officer
Lugang Hua	47	Chief Technology Officer
Huiqing Ye	67	Director Nominee*
Liming Huang	37	Director Nominee*
Teoh Chun Hiah	35	Director Nominee*
David H. Sherman	72	Director Nominee*

	·	evaluating the independence and performance of, and assesses the qualifications of, our independent auditor, and engages such independent auditor;

	·	approving the plan and fees for the annual audit, quarterly reviews, tax and other audit-related services, and approves in advance any non-audit service to be provided by the independent auditor;

	·	monitoring the independence of the independent auditor and the rotation of partners of the independent auditor on our engagement team as required by law;

	·	reviewing the financial statements to be included in our Annual Report on Form 20-F and Current Reports on Form 6-K and reviews with management and the independent auditors the results of the annual audit and reviews of our quarterly financial statements;

	·	overseeing all aspects of our systems of internal accounting control and corporate governance functions on behalf of the board;

	·	reviewing and approving in advance any proposed related-party transactions and report to the full Board on any approved transactions; and

	·	providing oversight assistance in connection with legal, ethical and risk management compliance programs established by management and our board of directors, including Sarbanes-Oxley Act implementation, and makes recommendations to our board of directors regarding corporate governance issues and policy decisions.

	(i)	duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole;

	(ii)	duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose;

	(iii)	directors should not properly fetter the exercise of future discretion;

	(iv)	duty to exercise powers fairly as between different sections of shareholders;

	(v)	duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and

	(vi)	duty to exercise independent judgment.

	Prior to Offering					After Offering
Name and Address of Beneficial Owner⁽¹⁾	Amount and Nature of Beneficial Ownership		Approximate Percentage of Outstanding Shares⁽²⁾			Amount and Nature of Beneficial Ownership		Approximate Percentage of Outstanding Shares⁽³⁾
5% or Greater Shareholders
Xiaofeng Gao		3,870,000		43.0	%		3,870,000		32.3	%
Lugang Hua		900,000		10.0	%		900,000		7.5	%

Executive Officers, Directors and Director Nominees
Xiaofeng Gao		3,870,000		43.0	%		3,870,000		32.3	%
Jun Liu		180,000		2.0	%		180,000		1.5	%
Lugang Hua		900,000		10.0	%		900,000		7.5	%
David H. Sherman		--		--
Limin Huang		--		--
Huiqing Ye		--		--
Teoh Chun Hiah		--		--

All directors, director nominees and executive officers as a group (7 individuals)		4,950,000		55.0	%		4,950,000		41.3	%

	Six months ended September 30,		First year ended March 31,
	2019		2019		2018		2017
Name of related parties:
Gao Xiaofeng		-		-		1,590,305		4,348,267
Total				-	$	1,590,305	$	4,348,267

	·	profits; or

	·	“share premium account,” which represents the excess of the price paid to our company on the issue of its shares over the par or “nominal” value of those shares, which is similar to the U.S. concept of additional paid in capital.

	·	does not have to file an annual return of its shareholders with the Registrar of Companies;

	·	is not required to open its register of members for inspection;

	·	does not have to hold an annual general meeting;

	·	may issue shares with no par value;

	·	may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance);

	·	may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;

	·	may register as a limited duration company; and

	·	may register as a segregated portfolio company.

	·	we are not proposing to act illegally or beyond the scope of our corporate authority and the statutory provisions as to majority vote have been complied with;

	·	the shareholders have been fairly represented at the meeting in question;

	·	the arrangement is such that a business person would reasonably approve; and

	·	the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Law or that would amount to a “fraud on the minority.”

Underwriter	Number of shares

The Benchmark Company, LLC	[●]

Axiom Capital Management, Inc.	[●]

Prime Number Capital	[●]

Total	[●]