EpicQuest Education Group International Ltd 6-K, filed Jun 25, 2026
EpicQuest Education Group International Ltd (EEIQ)
About this 6-K
EpicQuest Education Group International Ltd filed this 6-K on June 25, 2026.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of June
Commission File Number:
(Translation of registrant’s name into English)
200 N. St. Clair St., Suite 100, Toledo OH, 43604
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
EXPLANATORY NOTE
EpicQuest Education Group International Limited (the “Company”) hereby furnishes under this Report of Foreign Private Issuer on Form 6-K (the “Form 6-K”) the following: (i) unaudited condensed consolidated financial statements of the Company as of and for the six-months ended March 31, 2026, as Exhibit 99.1 to this Form 6-K; and (ii) Operating and Financial Review and Prospects, which discusses and analyzes the Company’s operational and financial condition and results of operations as of and for the six-month period ended March 31, 2026, as Exhibit 99.2 to this Form 6-K.
Exhibits 99.1 and 99.2 this Report on Form 6-K shall be deemed to be incorporated by reference into the registration statements of the Company on Forms S-8 (Registration Numbers 333-258658 and 333-273948) and Forms F-3 (Registration Numbers 333-264807; 333-277859; 333-288399 and 333-296441), to the extent not superseded by documents or reports subsequently filed or furnished by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
EXHIBIT INDEX
| Exhibit | Description | |
| 99.1 | Unaudited Condensed Consolidated Financial Statements for the six months ended March 31, 2026. | |
| 99.2 | Operating and Financial Review and Prospects | |
| 101 | Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Unaudited Interim Consolidated Balance Sheets, (ii) Unaudited Interim Consolidated Statements of Operations and Comprehensive Loss, (iii) Unaudited Consolidated Statements of Changes in Shareholders’ Equity, (iv) Unaudited Consolidated Statements of Cash Flows, and (v) related notes to these consolidated financial statements. |
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| EpicQuest Education Group International Limited | ||
| By: | /s/ Zhenyu Wu | |
|
Zhenyu Wu Chief Financial Officer | ||
Date: June 25, 2026
2
Exhibit 99.1
ePICQUEST EDUCATION GROUP international LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2026 AND SEPTEMBER 30, 2025
(US$, except share data and per share data, or otherwise noted)
| March 31, 2026 | September 30, 2025 | |||||||
| US$ | US$ | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | ||||||||
| Restricted cash | ||||||||
| Accounts receivable, net of credit loss allowance of $ and $ | ||||||||
| Other receivable | ||||||||
| Prepaid expenses | ||||||||
| Other prepaid for events | ||||||||
| Inventory | ||||||||
| Income tax receivable | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets | ||||||||
| Right-of-use assets | ||||||||
| Goodwill | ||||||||
| Total assets | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Liabilities: | ||||||||
| Current liabilities | ||||||||
| Accounts payable and other liabilities | ||||||||
| Loan payable | - | |||||||
| Income tax payable | ||||||||
| Due to related party | ||||||||
| Lease liabilities – current | ||||||||
| Deferred revenue | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities | ||||||||
| Loan payable | ||||||||
| Lease liabilities – non current | ||||||||
| Deferred income tax liabilities | ||||||||
| Total liabilities | ||||||||
| Shareholders’ equity | ||||||||
| Common shares, US$ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated Deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total shareholders’ equity | ||||||||
| Non-controlling interests | ||||||||
| Total equity | ||||||||
| Total liabilities and equity | ||||||||
| * |
See accompanying notes to condensed consolidated financial statements.
F-1
ePICQUEST EDUCATION GROUP international LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE SIX MONTHS ENDED MARCH 31, 2026 AND 2025
(US$, except share data and per share data, or otherwise noted)
| March 31, 2026 | March 31, 2025 | |||||||
| US$ | US$ | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Revenues | ||||||||
| Costs of services | ||||||||
| Gross profit | ||||||||
| Operating costs and expenses: | ||||||||
| Selling expenses | ||||||||
| General and administrative | ||||||||
| Total operating costs and expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other (income) expenses: | ||||||||
| Other (income) expenses | ( | ) | ||||||
| Interest income | ( | ) | ( | ) | ||||
| Total other (income) expenses | ( | ) | ||||||
| Loss before provision for income taxes | ( | ) | ( | ) | ||||
| Current income tax expense | ||||||||
| Deferred income tax expense | ||||||||
| Income taxes expense | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Net income (loss) attributable to non-controlling interest | ( | ) | ||||||
| Net loss attributable to common stockholders | ( | ) | ( | ) | ||||
| Unrealized foreign currency translation adjustment | ( | ) | ||||||
| Comprehensive loss | ( | ) | ( | ) | ||||
| Basic & diluted net loss per share* | ( | ) | ( | ) | ||||
| Weighted average number of ordinary shares-basic and diluted* | ||||||||
| * |
See accompanying notes to condensed consolidated financial statements.
F-2
ePICQUEST EDUCATION GROUP international LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE SIX MONTHS ENDED MARCH 31, 2026 AND 2025
(US$, except share data and per share data, or otherwise noted)
| Common shares* | Common shares amount | Additional paid-in capital | Retained earnings (deficit) | Accumulated other comprehensive loss | Non-controlling interests | Total equity | ||||||||||||||||||||||
| Balance as of September 30, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Share-based compensation – common shares | ||||||||||||||||||||||||||||
| Share-based compensation – stock options | - | |||||||||||||||||||||||||||
| Currency translation adjustment | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance as of March 31, 2025 (Unaudited) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Balance as of September 30, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Rounding from the 16:1 reverse split | ( | ) | ||||||||||||||||||||||||||
| Share-based compensation – common shares | ||||||||||||||||||||||||||||
| Share-based compensation – stock options | - | |||||||||||||||||||||||||||
| Currency translation adjustment | - | |||||||||||||||||||||||||||
| Balance as of March 31, 2026 (Unaudited) | ( | ) | ( | ) | ||||||||||||||||||||||||
| * |
The accompanying notes form an integral part of these condensed consolidated financial statements.
F-3
ePICQUEST EDUCATION GROUP international LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 31, 2026 AND 2025
(US$, except share data and per share data, or otherwise noted)
| March 31, | March 31, | |||||||
| 2026 | 2025 | |||||||
| US$ | US$ | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Adjustments for items not affecting cash: | ||||||||
| Depreciation and amortization | ||||||||
| Share-based compensation | ||||||||
| Net gain from disposal of fixed assets | ( | ) | ||||||
| Gain from settlement of student-deposit refunds with Renda | ( | ) | ||||||
| Impairment loss on football match | ||||||||
| Deferred income tax expense | ||||||||
| Changes in operating assets and liabilities | ||||||||
| Accounts receivable and other receivable | ( | ) | ||||||
| Prepaid expenses | ( | ) | ||||||
| Operating lease – lease liabilities and right of use assets | ||||||||
| Inventory | ||||||||
| Accounts payable & accrued liabilities | ||||||||
| Deferred revenue | ( | ) | ( | ) | ||||
| Income tax receivable | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Purchase of property and equipment | ( | ) | ||||||
| Proceeds from sale of fixed assets | ||||||||
| Net cash (used in) provided from investing activities | ( | ) | ||||||
| Cash Flows from Financing Activities: | ||||||||
| Loan repayment to third party | ( | ) | ||||||
| Net cash used in financing activities | ( | ) | ||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ) | ||||||
| Net decrease in cash, cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents and restricted cash, beginning of year | ||||||||
| Cash and cash equivalents and restricted cash, end of period | ||||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | ||||||||
| Non-cash investing activities - modification of operating lease right-of-use asset | ||||||||
| Non-cash investing activities - modification of operating lease obligation | ||||||||
| Non-cash investing activities – acquisition of operating lease right-of-used assets | ||||||||
| Non-cash investing activities – assumption of operating lease obligation | ||||||||
See accompanying notes to condensed consolidated financial statements.
F-4
ePICQUEST EDUCATION GROUP international LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and principal activities and going concern
The Company was incorporated
in the British Virgin Island (“BVI”) on
Liquidity and Capital Resources
The accompanying condensed
consolidated financial statements have been prepared assuming that the Company will continue as a going concern. However, as of March
31, 2026, the Company has incurred recurring net losses and negative cash flows from operations, which raise substantial doubt about its
ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued.
As of March 31, 2026, the Company had an accumulated deficit of $
Management has developed a plan to address these concerns, which includes the following actions:
| ● | Cost reduction initiatives: The Company plans to implement some cost-cutting measures, including reductions in discretionary spending and recruitment fees for the new programs. | |
| ● | Equity financing: The Company is actively seeking additional equity
financing to fund operations and meet its obligations. On May 6, 2026, the Company consummated pursuant to a Securities Purchase Agreement
(the “Purchase Agreement”) an offering with certain accredited investors for the sale by the Company of (i) | |
| ● | New university programs: The Company is exploring strategic partnerships of foundational programs with more universities to introduce more educational programs that are awaiting approvals from Higher Learning Commission. These new programs will increase sources of revenues for the Company. |
While management believes that these plans are feasible, there is no assurance that these actions will be successful in mitigating the substantial doubt about the Company’s ability to continue as a going concern. If the Company is unable to obtain sufficient financing or generate adequate cash flows from operations, it may be required to curtail or cease operations, seek protection under applicable bankruptcy laws, or pursue other strategic alternatives.
The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
2. Summary of significant accounting policies
Basis of presentation
The condensed consolidated financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
F-5
Principal of consolidation
The condensed consolidated financial statements include the financial statements of the Company and its subsidiaries as of March 31, 2026. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.
In the opinion of the Company’s
management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary
for fair financial statement presentation. The preparation of these condensed consolidated financial statements and accompanying notes
in conformity with U.S. generally accepted accounting principles (“GAAP”) requires the use of management estimates.
| Principal activities | Percentage of ownership | Date of incorporation | Place of incorporation | |||||||||
| EpicQuest Education Group International Limited (the “Company” or “EpicQuest”) (formerly Elite Education International Co. Ltd.) | ||||||||||||
| Quest Holdings International LLC (“QHI”) | % | |||||||||||
| Quest International Education Center LLC (“QIE”) (formerly Miami International Education Center LLC) | % | |||||||||||
| Highrim Holding International Limited (“HHI”) | % | |||||||||||
| Davisu Canada Inc. (“DC” or “EduGlobal College”) | % | |||||||||||
| Ameri-Can Education Group Corp. (“Ameri-Can”) | % | |||||||||||
| Study Up Center, LLC (“SUPC”) | % | |||||||||||
| Davis University (“DU”) | % | 1858 | ||||||||||
| Skyward Holding International Limited (“Skyward”) | % | |||||||||||
| Gilmore INV LLC (“Gilmore”) | % | |||||||||||
| SouthGilmore LLC (“SouthGilmore”) | % | |||||||||||
Use of estimates
The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes. Actual amounts could differ from those estimates and differences could be material. Changes in estimates are recorded in the period they are identified.
Significant items subject to estimates include the recoverable amounts of goodwill and indefinite-lived intangible assets, the useful lives of long-lived assets, finite-lived intangible assets, share-based compensation and the recoverability of prepaid for soccer games.
F-6
Foreign currency and foreign currency translation
The Company’s reporting currency is the United States dollar (“US$” or “$”). The US$ is the functional currency of the Company and its subsidiaries of QHI, QIE, HHI, Ameri-Can, SUPC, DU, Skyward, Gilmore and SouthGilmore. The Canadian dollar (“C$”) is the functional currency of the Company’s subsidiary of DC.
Transactions denominated in other than the functional currencies are re-measured into the functional currency of the entity at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional currency at the prevailing rates of exchange at the balance date. The resulting exchange differences are reported in the condensed consolidated statements of operations and comprehensive loss.
The assets and liabilities
of the Company’s subsidiary in the C$, which is DC, are translated at the exchange spot rate at the balance sheet date, stockholders’
equity is translated at the historical rates and the revenues and expenses are translated at the average exchange rates for the periods.
The resulting translation adjustments are reported under other comprehensive income in the condensed consolidated statements of operations
and comprehensive loss in accordance with ASC 220.
| March 31, 2026 | March 31, 2025 | |||
| Period-end spot rate | US$ | US$ | ||
| Average rate for six months period | US$ | US$ |
Certain risks and concentration
The Company’s financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, accounts receivable and other receivable. As of March 31, 2026 and September 30, 2025, substantially all of the Company’s cash and cash equivalents were held in major financial institutions located in the US and Canada.
The trades receivable related to third party are primarily from the 3+0 program. The outstanding balance will be charged into expenses when the third party provided the consulting and agency services to the Company. The Company has a significant other receivable balance as the Company’s business partners in China, Beijing Renda Financial Education Technology Co., Ltd. and Wenfeng Shenghe Study Abroad Co. Ltd. collect some of the student tuition fees on behalf of DU and DC, and other receivable balance can be settled with the service charged by them. Therefore, there was no significant concentration risk and credit risk for the Company as at March 31, 2026.
Cash and cash equivalents
Cash and cash equivalents consist of petty cash on hand and cash held in banks, which are highly liquid and have original maturities of three months or less and are unrestricted as to withdrawal or use.
Restricted cash
Restricted cash represents
the cash that is held by the Department of Education on behalf of DU in order to meet the financial protection requirement for change
of ownership of DU. This amount represents
F-7
Revenue recognition
ASC 606 provides for a five-step model for recognizing revenue from contracts with customers. These five steps include:
| (i) | Identify the contract | |
| (ii) | Identify performance obligations | |
| (iii) | Determine transaction price | |
| (iv) | Allocate transaction price | |
| (v) | Recognize revenue |
Under ASC 606, revenue is recognized when the customer obtains control of a good or service. A customer obtains control of a good or service if it has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. The Company’s revenue streams contain the following services and performance obligations offered through the subsidiaries of DC, QHI or DU:
| Programs offered through DC | ||
| ● | English education programs | |
| ● | Master certificate programs | |
| ● | Student accommodation and other related services | |
| ● | Application service | |
| Programs offered through QHI | ||
| ● | English education programs | |
| ● | Student accommodation and other related services | |
| Professional education and training programs offered through DU | ||
| ● | University education programs | |
| ● | Post-education training programs | |
| ● | Collaboration education services provided to non-U.S. colleges | |
| ● | Student accommodation and other related services | |
| ● | Professional career training programs | |
F-8
The Company’s primary revenue streams and their respective accounting treatments are as follows:
| i. | Tuition and Academic Programs |
The Company provides various academic instruction, university preparation, and career training services to students, including English education programs, Master certificate programs, university education programs, post-second training programs, and professional career training programs. Each enrollment agreement is accounted for as a single performance obligation to provide a series of distinct instructional services. As the students simultaneously receive and consume the benefits provided by the Company’s performance as the services are rendered, the Company recognizes revenue over time using the straight-line method over the duration of the academic. The Company has determined that it acts as the principal for all service performance obligations, as it controls the pricing of the specified services, manages the significant aspects of the service delivery process, and assumes the risks of loss related to service delivery and collection. Accordingly, revenue from these services is presented on a gross basis in the condensed consolidated statements of operations and comprehensive loss.
| ii. | Collaborative Education Services |
The Company provides curriculum design, operational support, and instructional guidance to institutional partners. These services are accounted for as a single performance obligation satisfied over time during the period the collaborative support is rendered.
| iii. | Student Accommodation and other related Services |
Revenue from student accommodation and academic support is recognized over time as the students simultaneously receive and consume the benefits throughout the residency or service period. The Company identifies the provision of boarding facilities and related support as distinct performance obligations satisfied over the contracted period. The Company has determined that it acts as the principal for all service performance obligations, as it controls the pricing of the specified services, manages the significant aspects of the service delivery process, and assumes the risks of loss related to service delivery and collection. Accordingly, revenue from these services is presented on a gross basis in the condensed consolidated statements of operations and comprehensive loss.
| iv. | Application and Advisory Services |
The Company provides specialized application services for students, including initial consulting, material preparation, and application submission. The Company identifies these services as a single performance obligation because the individual activities are highly interrelated and represent a combined output. The Company recognizes revenue over time as the benefits of the advisory services are simultaneously received and consumed by the student throughout the service lifecycle. Revenue is recognized over the estimated service period, typically one year, representing the typical application cycle from consultation to the completion of the application process.
Funds received from students prior to provision of our education services are recognized as deferred revenue. The deferred revenue is subsequently released into revenue once the registered semester starts and is released using straight-line method based on the semester period, which is generally three months. The release of the deferred revenue is to match the timing of the cost of our services, which is generally also based on the semester term or service period.
F-9
Costs of services
Costs of services for all our education programs are primarily comprised of the tuition fees paid to our partnered education institutions and salary expenses for our instructors and employees involved in the provisions of the services. These fees are charged into costs of services when such fees are incurred based on semester terms in direct relation to the education programs.
General and administrative expenses
General and administrative expenses primarily consist of depreciation expenses, office expenses, professional fees, office space rental expenses, repairs and maintenance, salary and benefits, management service fee, stock-based compensation, sundry costs, and vehicle expenses.
Selling expense
The Company’s selling expenses primarily relate to the student recruitment commission fees paid to agents who provided student recruitment services to the Company and expenses related to business development. The Company relies on agents to promote and recruit potential students to enroll in its foreign language education programs, as well as academic and professional training programs.
Fair value measurement
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.
The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value as follows:
| Level 1: | Quoted prices (unadjusted) in active markets for identical assets or liabilities. | |
| Level 2: | Observable, market-based inputs, other than quoted prices, in active markets for identical assets or liabilities. | |
| Level 3: | Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |
The Company’s financial instruments include cash and cash equivalents, restricted cash, accounts receivable, other receivable, accounts payable and accrued liabilities, due to related party, loan payable, income tax payable and lease liabilities. The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, other receivable, accounts payable and accrued liabilities, income tax payable and due to related party approximate their fair values due to the short-term nature of these instruments. For lease liabilities, fair value approximates their carrying value at the year-end, as the interest rates used to discount the host contracts approximate market rates.
The Company did not have transfers of financial instruments between levels during any of the periods presented. The Company did not have any instruments that were measured at fair value on a recurring nor non-recurring basis as of March 31, 2026 and September 30, 2025.
F-10
Property and equipment
Property and equipment are
recorded at cost, less accumulated, depreciation and impairment. Depreciation of property and equipment is calculated on a straight-line
basis, after consideration of expected useful lives and estimated residual values.
| Category | Depreciation years | Estimated residual value | ||||
| Machinery & equipment | $ | |||||
| Vehicles | $ | |||||
| Furniture and fixtures | $ | |||||
| Software | $ | |||||
| Leasehold improvement | $ | |||||
Expenditures for maintenance and repairs are expensed as incurred. Gains and losses on disposals are the differences between net sales proceeds and carrying amount of the relevant assets and are recognized in the condensed consolidated statements of operations and comprehensive loss.
Intangible assets
Intangible assets are measured at cost less accumulated amortization and accumulated impairment losses. Cost includes all expenditures that are directly attributable to the acquisition or development of the asset, net of any amounts received in relation to those assets.
Amortization is recognized in net earnings on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. The estimated useful lives are:
| Asset | Basis | Rate / term | ||
| University relationship | ||||
| Education license/certificate | ||||
| In-process course curriculum | ||||
| Accreditations and licensing | ||||
| Accredited curriculum | ||||
| Articulation agreement | ||||
| Brand related assets |
F-11
Leases
The Company determines if an arrangement is a lease at inception. The Company may have lease agreements with lease and non-lease components, which are generally accounted for separately. Leases are classified as either operating leases or finance leases pursuant to ASC 842.
| i) | Operating leases |
Operating leases are recognized as right-of-use assets (“ROU”) in non-current assets and lease liabilities in non-current liabilities in the condensed consolidated balance sheets if the initial lease term is greater than 12 months. For leases with an initial term of 12 months or less the Company recognizes those lease payments on a straight-line basis over the lease term.
ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, management uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Management uses the implicit rate when readily determinable. Lease expense for lease payments is recognized on a straight-line basis over the lease term and are included in general and administrative (“G&A”) expenses and cost of sales.
Impairment of long-lived and indefinite-lived assets
Long-lived assets, comprised of property and equipment, ROU assets, and intangible assets subject to amortization, are assessed for impairment whenever events or circumstances indicate that their carrying value may not be recoverable. For the purpose of impairment testing, long-lived assets are grouped and tested for recoverability at the lowest level that generates independent cash flows. An impairment loss is recognized when the carrying value of the assets or asset groups is greater than the future projected undiscounted cash flows. The impairment loss is calculated as the excess of the carrying value over the fair value of the asset or asset group. Fair value is based on valuation techniques or third party appraisals. Significant estimates and judgments are applied in determining these cash flows and fair values.
Indefinite-lived intangible assets are tested annually for impairment as of September 30, and between annual tests if indicators of potential impairment exist. The Company has the option of performing a qualitative assessment to first determine whether the quantitative impairment test is necessary. This involves an assessment of qualitative factors to determine the existence of events or circumstances that would indicate whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying value. If the qualitative assessment indicates it is not more likely than not that the fair value is less than its carrying value, a quantitative impairment test is not required. Where a quantitative impairment test is required, the procedure is to compare the indefinite-lived intangible asset’s fair value with its carrying amount. An impairment loss is recognized as the difference between the indefinite-lived intangible asset’s carrying amount and its fair value.
Under qualitative assessment, there were no impairment losses for the six months ended March 31, 2026 and 2025.
F-12
Goodwill
Goodwill represents the excess of the purchase price of an acquired enterprise over the fair value assigned to the assets acquired and liabilities assumed in a business combination.
Goodwill is not amortized, but it is tested annually for impairment at the reporting unit level as of September 30, and between annual tests if indicators of potential impairment exist. The Company has the option of performing a qualitative assessment of a reporting unit to first determine whether the quantitative impairment test is necessary. This involves an assessment of qualitative factors to determine the existence of events or circumstances that would indicate whether it is more likely than not that the fair value of the reporting unit to which goodwill belongs is less than its carrying value. If the qualitative assessment indicates it is not more likely than not that the reporting unit’s fair value is less than its carrying value, a quantitative impairment test is not required.
If a quantitative impairment test is required, the procedure is to identify potential impairment by comparing the reporting unit’s fair value with its carrying amount, including goodwill. The reporting unit’s fair value is determined using various valuation approaches and techniques that involve assumptions based on what the Company believes a hypothetical marketplace participant would use in estimating fair value on the measurement date. An impairment loss is recognized as the difference between the reporting unit’s carrying amount and its fair value. If the difference between the reporting units carrying amount and fair value is greater than the amount of goodwill allocated to the reporting unit, the impairment loss is restricted by the amount of the goodwill allocated to the reporting unit.
As of March 31, 2026, the Company performed a qualitative assessment for its goodwill under DC’s operation and concluded that there were no indicators of impairment. As of September 30, 2025, the Company performed a quantitative assessment for its goodwill under DC’s operation and concluded that there were no indicators of impairment.
As of March 31, 2026, the Company performed a qualitative assessment of its goodwill under DU’s operation and concluded that there were no indicators of impairment. As of September 30, 2025, the Company performed a quantitative assessment of its goodwill under DU’s operation and concluded that there were no indicators of impairment.
Taxation
Current income taxes are provided on the basis of net profit for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions.
Deferred income taxes are recognized for temporary differences between the tax bases of assets and liabilities and their reported amounts in the condensed consolidated financial statements, net operating loss carry forwards and credits. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in which temporary differences are expected to be reversed or settled. The effect on deferred tax assets and liabilities of changes in tax rates is recognized in the statement of operation and comprehensive income in the period of the enactment of the change.
F-13
The Company considers positive and negative evidence when determining whether a portion or all of its deferred tax assets will more likely than not be realized. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry-forward periods, its experience with tax attributes expiring unused, and its tax planning strategies. The ultimate realization of deferred tax assets is dependent upon its ability to generate sufficient future taxable income within the carry-forward periods provided for in the tax law and during the periods in which the temporary differences become deductible. When assessing the realization of deferred tax assets, the Company has considered possible sources of taxable income including (i) future reversals of existing taxable temporary differences, (ii) future taxable income exclusive of reversing temporary differences and carry-forwards, (iii) future taxable income arising from implementing tax planning strategies, and (iv) specific known trend of profits expected to be reflected within the industry.
The Company recognizes a tax
benefit associated with an uncertain tax position when, in its judgment, it is more likely than not that the position will be sustained
upon examination by a taxing authority. For a tax position that meets the more-likely-than-not recognition threshold, the Company initially
and subsequently measures the tax benefit as the largest amount that the Company judges to have a greater than
Earnings per share
Basic earnings per share is computed by dividing net income attributable to shareholders by the weighted average number of common shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between common shares and other participating securities based on their participating rights. Net loss is not allocated to other participating securities if based on their contractual terms they are not obligated to share in the losses. Diluted earnings per share is calculated by dividing net income attributable to common shareholders by the weighted average number of common and dilutive common equivalent shares outstanding during the period. Common equivalent shares are not included in the denominator of the diluted loss per share calculation when inclusion of such shares would be anti-dilutive.
Defined contribution plans
The Company contributes to defined contribution retirement schemes which are available to all employees. Contributions to the schemes by the Company and employees are calculated as a percentage of employees’ basic salaries. The retirement benefit scheme cost charged to profit or loss represents contributions payable by the Company to the funds.
Stock-Based Compensation
The measure stock-based awards at fair value on the date of the grant and expense the awards in condensed consolidated statements of operations and comprehensive loss over the requisite service period of employees or consultants. The fair value of stock options is determined using the Black-Scholes valuation model. The fair value of stock-based awards is determined using the share price of the Company at the date of grant. Stock-based compensation expense related to all stock-based awards, including stock option, is recognized over the requisite service period on a straight-line basis. The amount of stock-based compensation expense recognized at any date must at least equal the portion of the grant-date value of the award that is vested at that date. Forfeitures are accounted for as they occur.
Recently adopted accounting standards
ASU 2023-07: In November 2023, the FASB issued ASU 2023-07 for Segment Reporting (Topic 280): The amendments in this Update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in this Update:
| 1. | Require that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss (collectively referred to as the “significant expense principle”). |
| 2. | Require that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition. The other segment items category is the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss. |
| 3. | Require that a public entity provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by Topic 280 in interim periods. |
F-14
| 4. | Clarify that if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures of segment profit. However, at least one of the reported segment profit or loss measures (or the single reported measure, if only one is disclosed) should be the measure that is most consistent with the measurement principles used in measuring the corresponding amounts in the public entity’s condensed consolidated financial statements. In other words, in addition to the measure that is most consistent with the measurement principles under generally accepted accounting principles (GAAP), a public entity is not precluded from reporting additional measures of a segment’s profit or loss that are used by the CODM in assessing segment performance and deciding how to allocate resources. |
| 5. | Require that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. |
| 6. | Require that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this Update and all existing segment disclosures in Topic 280. |
The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company adopted the new standards for the year ended September 30, 2025.
ASU 2024-02: In March 2024, the FASB issued ASU 2024-02, “Codification Improvements — Amendments to Remove References to the Concepts Statements.” This update contains amendments to the Codification that remove references to various FASB Concepts Statements. These changes remove references to various Concepts Statements, and the amendments apply to all reporting entities within the scope of the affected accounting guidance. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2024. Early application of the amendments in this Update is permitted for any fiscal year or interim period for which financial statements have not yet been issued (or made available for issuance) . The Company adopted this new standard during the year ended September 30, 2025.
Recently issued accounting standards
ASU 2023-09: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The FASB is issuing amendments to enhance the transparency and decision usefulness of income tax disclosures. Investors currently rely on the rate reconciliation table and other disclosures, including total income taxes paid, to evaluate income tax risks and opportunities. While investors find these disclosures helpful, they suggested possible enhancements to better (1) understand an entity’s exposure to potential changes in jurisdictional tax legislation and the ensuing risks and opportunities, (2) assess income tax information that affects cash flow forecasts and capital allocation decisions, and (3) identify potential opportunities to increase future cash flows. The FASB decided that the amendments should be effective for public business entities for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this ASU on its condensed consolidated financial statement disclosures.
ASU 2024-03: In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). This ASU requires public business entities to disclose, in the notes to the financial statements, disaggregated information about certain expense categories included within relevant income statement expense captions. The amendments do not change the recognition or measurement of expenses presented on the face of the income statement.
The ASU is effective for the Company for annual reporting periods beginning after December 15, 2026, and for interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this ASU on its condensed consolidated financial statement disclosures.
ASU 2025-05: In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets. This standard introduces a practical expedient that companies can choose to apply when determining allowances for credit losses. Specifically, it permits companies to assume that the current conditions as of the balance sheet remain unchanged throughout the remaining life of the asset. The amendment is effective for annual reporting periods beginning after December 15, 2025, and requires prospective application. The Company is currently evaluating the impact of the adoption of this ASU on its condensed consolidated financial statement disclosures.
ASU 2025-06: On September 18, 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. ASU 2025-06 modernizes the accounting for internal-use software (the existing internal-use software guidance does not contemplate more current methods of software development). The amendments in ASU 2025-06 are limited and focused on the key challenge that entities face in applying FASB Accounting Standards Codification (FASB ASC) 350-40—applying that guidance to software that is developed using modern, iterative approaches such as Agile, DevOps, and continuous-deployment models that do not fit neatly into the legacy “preliminary-project / application-development / post-implementation” stages described in today’s Subtopic 350-40.The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company expects the adoption on this ASU will not have a material effect on the Company’s consolidated financial statements.
F-15
3. Prepaid Expenses and Other prepaid for events
Prepaid expenses consist of the following:
| March 31, 2026 | September 30, 2025 | |||||||
| US$ | US$ | |||||||
| Prepaid fees to Renda | ||||||||
| Prepaid insurance | ||||||||
| Other prepaid expenses | ||||||||
| Prepaid tuition fees to Shanghai Jiao Tong University | ||||||||
| Prepaid fees to Guangzhou Zhonghong Hean | ||||||||
| Prepaid Jishi Holdings | ||||||||
| Prepaid ESHY Edu | ||||||||
| Prepaid IvyPlan Education Consulting | ||||||||
| Total | ||||||||
Prepaid fees to Renda represent the fees that the Company prepaid to Beijing Renda Finance and Education Technology Co., Ltd (“Renda”) for services have yet to be provided by Renda. The prepaid fees will be recognized into general and administrative expense when such fees are incurred based on the actual costs incurred by Renda on behalf of the Company’s business partners in China, Beijing Renda Financial Education Technology Co., Ltd. and Wenfeng Shenghe Study Abroad Co. Ltd..
Prepaid tuition fees to Shanghai Jiao Tong University represent the fees that the Company prepaid to Shanghai Jiao Tong University for services have yet to be provided. The prepaid fees will be recognized into costs of services when such fees are incurred based on the actual costs incurred by Shanghai Jiao Tong University.
Prepaid fees to Guangzhou Zhonghong Hean represent the fees that the Company prepaid to Guangzhou Zhonghong Hean for consulting and agency services have yet to be provided. The prepaid fees will be charged into expenses when Guangzhou Zhonghong Hean provided the consulting and agency services to the Company.
Prepaid fees to Jishi Holdings represent the fees that the Company prepaid to Jishi Holdings for services have yet to be provided. The prepaid fees will be charged into costs of services when such fees are incurred based on the actual costs incurred by Jishi Holdings.
Prepaid fees to ESHY Edu represent the fees that the Company prepaid to ESHY Edu for services have yet to be provided. The prepaid fees will be charged into costs of services when such fees are incurred based on the actual costs incurred by ESHY Edu.
Prepaid fees to IvyPlan Education Consulting represent the fees that the Company prepaid to IvyPlan Education Consulting for services have yet to be provided. The prepaid fees will be charged into costs of services when such fees are incurred based on the actual costs incurred by IvyPlan Education Consulting.
Other prepaid for event consist of the following:
| March 31, 2026 | September 30, 2025 | |||||||
| US$ | US$ | |||||||
| Prepaid for soccer games | ||||||||
F-16
The prepaid for soccer games
represents a service fee prepaid to Argentine Football Association (the “AFA”), On November 23, 2023, the Company’s
subsidiary, SouthGilmore, entered into an agreement (the “Agreement”) with AFA, pursuant to which the parties agreed that
hold certain international friendly matches between the Argentine men’s national soccer team and similar opponents in China or Asia.
Pursuant to the Agreement, SouthGilmore agreed to pay the AFA a total of $
In February 2026, SouthGilmore
entered into a Brokerage & Sales Mandate Agreement (the “Brokerage Agreement”) with a broker, pursuant to which the parties
agreed that the minimum net proceeds from the sale of the two matches would be $
4. Property and Equipment, net
Property and equipment, net consist of the following:
| March 31 2026 | September 30, 2025 | |||||||
| US$ | US$ | |||||||
| Machinery & equipment | ||||||||
| Vehicles | ||||||||
| Furniture and fixtures | ||||||||
| Software | ||||||||
| Leasehold improvement | ||||||||
| Total | ||||||||
| Less: Accumulated depreciation | $ | ( | ) | $ | ( | ) | ||
| Property and equipment, net | ||||||||
Depreciation expenses were
recorded in general and administrative expenses. The Company recorded depreciation expenses of US$
5. Intangible assets, net
Intangible assets, net consist of the following:
| March 31, 2026 | September 30, 2025 | |||||||
| US$ | US$ | |||||||
| University relationship | ||||||||
| Education license/certificate | ||||||||
| In-process course curriculum | ||||||||
| Accreditations and licensing* | ||||||||
| Accredited curriculum | ||||||||
| Articulation agreement | ||||||||
| Brand related assets* | ||||||||
| Total | ||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Intangible assets, net | ||||||||
| * |
Depreciation expenses were
recorded in general and administrative expenses. The Company recorded depreciation expenses of US$
F-17
6. Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities primarily consist of the following:
| March 31, 2026 | September 30, 2025 | |||||||
| US$ | US$ | |||||||
| Accounts payable | ||||||||
| Student refundable deposits | ||||||||
| Accrued commission expenses | ||||||||
| Accrued liability for the football games | ||||||||
| Other funds received from natural persons | ||||||||
| Other payables | ||||||||
| Total | ||||||||
7. Deferred revenue
The movement of deferred revenue is as follows:
| March 31, 2026 | September 30, 2025 | |||||||
| US$ | US$ | |||||||
| Opening balance | ||||||||
| Additional deferred revenue accrual | ||||||||
| Revenue release from deferred revenue | ( | ) | ( | ) | ||||
| Ending Balance | ||||||||
For the six months ended March
31, 2026, $
8. Loan payable
Loan payable of US$
During the six months ended
March 31, 2026, the Company repaid US$
9. Capital Stock
Common shares
During the year ended September
30, 2025, the Company completed a unit offering private placement and issued
During the year ended September
30, 2025, the Company completed a private placement and issued
During the year ended September
30, 2025, the Company issued
During the six months ended
March 31, 2026, the Company issued
On February 17, 2026, the
Company completed a reverse stock split at a ratio of
F-18
Warrants
A continuity schedule of outstanding warrants at September 30, 2025 and March 31, 2026, and the changes during the periods, is as follows:
| Number of Warrants | Weighted Average Exercise Price | |||||||
| US$ | ||||||||
| Balance, September 30, 2024 | ||||||||
| Granted | ||||||||
| Exercised | ||||||||
| Balance, September 30, 2025 | ||||||||
| Forfeited | ( | ) | ||||||
| Balance, March 31, 2026 | ||||||||
A summary of warrants outstanding and exercisable at September 30, 2025:
| Exercisable | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | ||||||||||
| US$ | ||||||||||||
| Grant date | ||||||||||||
| March 29, 2021 | ||||||||||||
| January 8, 2024 | ||||||||||||
| May 27, 2025 | ||||||||||||
| August 26, 2025 | ||||||||||||
A summary of warrants outstanding and exercisable at March 31, 2026:
| Exercisable | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | ||||||||||
| US$ | ||||||||||||
| Grant date | ||||||||||||
| January 8, 2024 | ||||||||||||
| May 27, 2025 | ||||||||||||
| August 26, 2025 | ||||||||||||
Stock options
At March 31, 2026, the Company had one stock option plan, the 2019 Equity Incentive Plan (the “2019 Plan”).
During the six months ended
March 31, 2026, the Company granted
F-19
A continuity schedule of outstanding stock options at September 30, 2025 and March 31, 2026, and the changes during the periods, is as follows:
| Number of Stock Options | Weighted Average Exercise Price | |||||||
| US$ | ||||||||
| Balance, September 30, 2024 | ||||||||
| Granted | ||||||||
| Balance, September 30, 2025 | ||||||||
| Granted | ||||||||
| Balance, March 31, 2026 | ||||||||
A continuity schedule of outstanding unvested stock options at September 30, 2025 and March 31, 2026, and the changes during the periods, is as follows:
| Number of Unvested Stock Options | Weighted Average Grant Date Fair Value | |||||||
| US$ | ||||||||
| Balance, September 30, 2024 | ||||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited | ||||||||
| Balance, September 30, 2025 | ||||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited | ||||||||
| Balance, March 31, 2026 | ||||||||
At September 30, 2025, the
aggregate intrinsic value of all outstanding stock options granted was estimated at $. At September 30, 2025, the unrecognized compensation
cost related to unvested stock options was $
At March 31, 2026, the aggregate
intrinsic value of all outstanding stock options granted was estimated at $. At March 31, 2026, the unrecognized compensation cost
related to unvested stock options was $
A summary of stock options outstanding and exercisable at September 30, 2025:
| Exercisable | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | ||||||||||
| US$ | ||||||||||||
| Grant date | ||||||||||||
| November 1, 2021 | ||||||||||||
| December 30, 2022 | ||||||||||||
| October 19, 2023 | ||||||||||||
| August 6, 2025 | ||||||||||||
F-20
A summary of stock options outstanding and exercisable at March 31, 2026:
| Exercisable | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | ||||||||||
| US$ | ||||||||||||
| Grant date | ||||||||||||
| November 1, 2021 | ||||||||||||
| December 30, 2022 | ||||||||||||
| October 19, 2023 | ||||||||||||
| August 6, 2025 | ||||||||||||
| October 14, 2025 | ||||||||||||
Share-based awards
| (a) | During the year ended September 30, 2024, the Company granted | |
| (b) | During the year ended September 30, 2025, the Company granted an aggregate of | |
| (c) | During the year ended September 30, 2025, the Company granted an aggregate of | |
| (d) | During the year ended September 30, 2025, the remaining | |
| (e) | During the six months ended March 31, 2026, the Company granted an aggregate of |
F-21
10. Loss per share
Basic and diluted net loss per share for each of the periods presented are calculated as follows:
| March 31, 2026 | March 31, 2025 | |||||||
| US$ | US$ | |||||||
| Numerator: | ||||||||
| Net loss attributable to ordinary shareholders—basic and diluted | ( | ) | ( | ) | ||||
| Denominator: | ||||||||
| Weighted average number of ordinary shares outstanding—basic and diluted | ||||||||
| Loss per share attributable to ordinary shareholders —basic and diluted | ( | ) | ( | ) | ||||
The following table summarizes potential common shares outstanding excluded from the calculation of diluted earnings (loss) per share for the six months ended March 31, 2026 and 2025, because their effect is anti-dilutive:
| March 31, 2026 | March 31, 2025 | |||||||
| US$ | US$ | |||||||
| Share issuable under share options | ||||||||
| Share issuable under warrants | ||||||||
| Ending balance | ||||||||
11. Related Party Transactions and Balances
Related Parties
| Name of related parties | Relationship with the Company | |
| Jianbo Zhang |
Due to related party balance
The related party balances
of $
12. Revenue, costs of sales and gross profit margin
The following table sets forth the revenue, costs of sales and gross profit margin of the Company:
| For The Six Months Ended | For The Six Months Ended | |||||||
| March 31, 2026 | March 31, 2025 | |||||||
| Revenues –QHI | $ | $ | ||||||
| Revenues –DC | ||||||||
| Revenues –DU | ||||||||
| Costs of services –QHI | ||||||||
| Costs of services –DC | ||||||||
| Costs of services –DU | ||||||||
| Gross profit | ||||||||
| Gross profit margin % | % | % | ||||||
F-22
13. General and administrative expenses
General and administrative expenses consist primarily of the following expenses:
| For the Six Month Ended March 31, 2026 | For the Six Months Ended March 31, 2025 | |||||||
| Bank charges | $ | $ | ||||||
| Depreciation expenses | ||||||||
| Insurance | ||||||||
| Office expenses | ||||||||
| Professional | ||||||||
| Rental expenses | ||||||||
| Repairs and maintenance | ||||||||
| Salary and benefits | ||||||||
| Management service fee | ||||||||
| Stock-based compensation | ||||||||
| Sundry | ||||||||
| Tax and licenses | ||||||||
| Vehicle expenses | ||||||||
| Total | ||||||||
14. Other income
Other income consists primarily of the following:
| For the Six Month Ended March 31, 2026 |
For the Six Months Ended March 31, 2025 |
|||||||
| US$ | US$ | |||||||
| Gain from settlement of student-deposit refunds with Renda* | ||||||||
| Loss for football game | ( |
|||||||
| Gain from disposal of fixed assets | ||||||||
| Others | ( |
|||||||
| Total | ( |
|||||||
| * |
F-23
15. Segment Reporting
The Company’s chief operating decision maker has been identified as the Chief Executive Officer who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. The Company uses the management approach to determine the operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making decisions, allocating resources and assessing performance. The chief operating decision maker uses revenue to assess segment profitability and allocate resources effectively. There are inter-segment revenue transactions including marketing service and management service. Reconciliation of total segment revenues to consolidated revenues excludes inter-segment revenue. The accounting policies of the segments are the same as those used by the Company.
During the six months
ended March 31, 2026 and 2025, the Company operated in
A summary of segment information for the six months ended March 31, 2026:
| - QHI - | - DC - | -DU- | Other | Total | ||||||||||||||||
| US$ | US$ | US$ | US$ | US$ | ||||||||||||||||
| Revenue | ||||||||||||||||||||
| Cost of services | ||||||||||||||||||||
| Selling expenses and general administrative | ||||||||||||||||||||
| Segmented loss /(income) | ( | ) | ||||||||||||||||||
| Depreciation expense | ||||||||||||||||||||
| Stock-based compensation expense | ||||||||||||||||||||
| Other expenses/(income) | ||||||||||||||||||||
| Interest income | ( | ) | ||||||||||||||||||
| Loss before income taxes | ||||||||||||||||||||
| Income taxes expense | ||||||||||||||||||||
| Net loss | ||||||||||||||||||||
A summary of segment information for the six months ended March 31, 2025:
| - QHI - | - DC - | -DU- | Other | Total | ||||||||||||||||
| US$ | US$ | US$ | US$ | US$ | ||||||||||||||||
| Revenue | ||||||||||||||||||||
| Cost of services | ||||||||||||||||||||
| Selling expenses and general administrative | ||||||||||||||||||||
| Segmented loss/(income) | ( | ) | ||||||||||||||||||
| Depreciation expense | ||||||||||||||||||||
| Stock-based compensation expense | ||||||||||||||||||||
| Other income | ( | ) | ||||||||||||||||||
| Interest income | ( | ) | ||||||||||||||||||
| Loss before income taxes | ||||||||||||||||||||
| Income taxes expense | ||||||||||||||||||||
| Net loss | 156,159 | |||||||||||||||||||
As at March 31, 2026, total
assets located in the U.S. and Canada were $
As at September 30, 2025, long-term
assets located in the U.S. and Canada were $
16. Subsequent Events
The Company has evaluated the impact of events that have occurred subsequent to March 31, 2026, through the date the condensed consolidated financial statements were available to issue, and concluded that no subsequent events have occurred that would require recognition in the condensed consolidated financial statements or disclosure in the notes to the condensed consolidated financial statements except the following:
1) On May 6, 2026, the Company consummated
pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) an offering with certain accredited investors for the
sale by the Company of (i)
F-24
Exhibit 99.2
Operating and Financial Review and Prospects
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes that appear in Exhibit 99.1 of this Form 6-K. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms including “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” or the negative of these terms or other similar expressions. Our actual results could differ materially from those discussed in the forward-looking statements due to certain factors, including, without limitation, the risks set forth under the caption “Risk Factors” in our most recent Annual Report on Form 20-F filed with the SEC on January 31, 2025, which are incorporated herein by reference as well as those business risks and factors described elsewhere in this report and in our other filings with the Securities and Exchange Commission (the “SEC”). All forward-looking statements speak only as of the date made, and we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Operating Results
We were founded in 2012. Our revenue is primarily derived from foreign language education, college-level education, and the education and professional training programs for the six months ended March 31, 2026 and 2025.
Our revenue for the six months ended March 31, 2026 increased by US$0.9 million as compared to that of the six months ended March 31, 2025. The increase was mainly due to increase in revenue from professional training programs in Davis University, and also due to more training programs were implemented. Our operating expenses increased by US$0.7 million compared to six months ended March 31, 2025 primarily due to the increase in our general administrative expenses. Our net loss for the six months ended March 31, 2026 increased by US$3.0 million as compared to that of the six months ended March 31, 2025.The increase was mainly due to increase in other expense of a US$0.6 million resulting from an impairment loss related to the football matches, and a US$1.8 million decrease in other income, reflecting the absence of gains on asset disposals and accounts payable settlements that occurred in the previous period.
As of March 31, 2026, our cash was US$0.6 million, including restricted cash. This represents a decrease of US$4.5 million from US$5.1 million as of September 30, 2025. The decrease is mainly due to the net operating loss in the six months ended March 31, 2026.
Results of Operations
Six Months Ended March 31, 2026 & 2025
| For The Six Months Ended | For The Six Months Ended | |||||||
| March 31, 2026 | March 31, 2025 | |||||||
| Revenues | $ | 6,270,951 | $ | 5,367,405 | ||||
| Costs of services | 2,638,887 | 1,951,235 | ||||||
| Gross profit | 3,632,064 | 3,416,170 | ||||||
| Operating costs and expenses: | ||||||||
| Selling expenses | 997,560 | 869,378 | ||||||
| General and administrative | 5,083,391 | 4,509,893 | ||||||
| Total operating costs and expenses | 6,080,951 | 5,379,271 | ||||||
| Loss from operations | (2,448,887 | ) | (1,963,101 | ) | ||||
| Other expenses (income) | 600,609 | (1,893,513 | ) | |||||
| Loss before provision for income taxes | (3,049,496 | ) | (69,588 | ) | ||||
| Income taxes expense | 111,582 | 86,571 | ||||||
| Net loss | (3,161,078 | ) | (156,159 | ) | ||||
Revenue
Our revenues increased by US$0.9 million or 16.8% in the first half of fiscal 2026 compared to the same period in fiscal 2025. These increases were mainly due to increase in revenue from professional training programs in our Davis University subsidiary, and also due to more training programs were implemented.
Costs of services
Our costs of services in six months ended March 31, 2026 increased by US$0.7 million or 35.2% compared to the same period in 2025, which is due to the increase in our revenue.
Gross Profit
Our gross profit was $3.6 million for the first half of fiscal 2026 compared to $3.4 million for the same period of 2025, representing an increase of $0.2 million, or 6.3%. The increase was primarily due to increase in our revenue. Our gross margin in six months ended March 31, 2026, decreased to 57.9% from 63.6% of the same period in 2025. This margin contraction was primarily due to lower student occupancy rates within dormitory services, which reduced fixed-cost absorption, as well as higher agent recruiting fees incurred to launch a new academic program.
Operating expenses
Our operating expenses consist of selling and marketing expenses, and general and administrative expenses.
The Company’s selling expenses primarily relate to the student recruitment commission fees paid to agents who provide student recruitment services to the Company and expenses related to business development. The Company relies on agents to promote and recruit potential students to enroll in its English learning programs and professional training programs. Total selling expenses increased by US$0.1 million in the first half year of fiscal 2026 compared to the same period in fiscal 2025, which is consistent with the increase in sales revenue.
Our general administrative expenses increased by $0.6 million in the first half year of fiscal 2026 compared to the same period in fiscal 2025, mainly due to the increase in non-cash expenses attributable to share-based compensation granted to directors, officers and employees.
Other expenses (income)
Other expenses of $0.6 million in the first half of fiscal 2026 is mainly related to the expected sales loss for the football matches. Other income of US$1.9 million in the same period in fiscal 2025 is mainly related to gain from disposal of fixed assets and gain from settlement of student-deposit refunds with Renda.
Net loss
Net loss for the six months ended March 31, 2026 was US$3.2 million, compared to the net loss of US$0.2 million for the same period in fiscal 2025, representing an increase in net loss of US$3.0 million.
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Liquidity and Capital Resources
Cash Flows and Working Capital
To date, we have financed our operations primarily through cash raised from public offerings and private placements of equity securities. As of March 31, 2026 and September 30, 2025, we had US$0.6 million, and US$5.1 million, respectively, in cash, which primarily consists of cash deposited in banks.
The Company’s working capital requirements mainly comprise cost of foreign language education program fees, education and professional training program fees, college-level education program fees, student recruitment fees, office expenses, professional fees, rental expenses, and salary expenses. We expect that the Company’s capital requirements will be met by cash generated from its own operating activities and equity financing.
On May 6, 2026, the Company consummated pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) an offering with certain accredited investors for the sale by the Company of (i) 150,000 ordinary shares of the Company, par value $0.0256 per share (the “Ordinary Shares”) and (ii) warrants to purchase up to an aggregate of 600,000 Ordinary Shares (the “Warrants”), in a private placement offering. The combined purchase price of one Ordinary Share and accompanying Warrants was $4.00. Subject to certain ownership limitations, the Warrants are exercisable upon issuance. Each Warrant is exercisable into one Ordinary Share at a price per share of $4.80 (as adjusted from time to time in accordance with the terms thereof) and will expire on the first anniversary of the date of issuance. The private placement offering generated gross cash proceeds of $0.6 million
The Company’s condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. However, as of March 31, 2026, the Company has incurred recurring net losses and negative cash flows from operations, which raise substantial doubt about its ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. As of March 31, 2026, the Company had an accumulated deficit of $20,217,930 and a negative cash flow from operating activities of $4,093,879.
Management has developed a plan to address these concerns, which includes the following actions:
| ● | Cost reduction initiatives: The Company plans to implement some cost-cutting measures, including reductions in discretionary spending and recruitment fees for the new programs. |
| ● | Equity financing: The Company is actively seeking additional equity financing to fund operations and meet its obligations. On May 6, 2026, the Company consummated pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) an offering with certain accredited investors for the sale by the Company of (i) 150,000 ordinary shares of the Company, par value $0.0256 per share (the “Ordinary Shares”) and (ii) warrants to purchase up to an aggregate of 600,000 Ordinary Shares (the “Warrants”). The private placement offering generated gross cash proceeds of $0.6 million. |
| ● | New university programs: The Company is exploring strategic partnerships of foundational programs with more universities to introduce more educational programs that are awaiting approvals from Higher Learning Commission. These new programs will increase sources of revenues for the Company. |
While management believes that these plans are feasible, there is no assurance that these actions will be successful in mitigating the substantial doubt about the Company’s ability to continue as a going concern. If the Company is unable to obtain sufficient financing or generate adequate cash flows from operations, it may be required to curtail or cease operations, seek protection under applicable bankruptcy laws, or pursue other strategic alternatives.
The Company’s condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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Cash Flow Summary
Six Months Ended March 31, 2026 and 2025
| For the Six Months Ended March 31, 2026 | For the Six Months Ended March 31, 2025 | |||||||
| Net cash provided by (used in) operating activities | (4,093,879 | ) | (2,294,857 | ) | ||||
| Net cash provided by (used in) investing activities | (16,974 | ) | 1,498,000 | |||||
| Net cash provided by (used in) financing activities | (350,000 | ) | - | |||||
| Effect of exchange rate changes on cash | 13,272 | (18,844 | ) | |||||
| Net increase (decrease) in cash | (4,447,581 | ) | (815,701 | ) | ||||
| Cash at beginning of period | 5,093,234 | 1,488,754 | ||||||
| Cash at end of period | 645,653 | 673,053 | ||||||
We had a balance of cash and cash equivalents of US$0.6 million (including restricted cash) as of March 31, 2026, US$0.7 million as of March 31, 2025.
Operating Activities:
Net cash used in operating activities was US$4.1 million for the six months ended March 31, 2026, compared to net cash used in operating activities of US$2.3 million for the same period ended March 31, 2025, representing a US$1.8 million increase in the net cash outflow in operating activities. The increase in net cash outflow in operating activities was primarily due to the following:
| 1) | We had a net loss of US$3.2 million for the six months ended March 31, 2026. For the six months ended March 31, 2025, we had a net loss of US$0.2 million which led to a US$3 million increase in net cash outflow in operating activities. |
| 2) | Change in accounts receivable and other receivable generated US$0.8 million net cash inflow for the six months ended March 31, 2026. For the six months ended March 31, 2025, change in accounts receivable and other receivable used US$0.1 million cash outflow, which led to a US$0.9 million increase in net cash inflow from operating activities. | |
| 3) | Change in prepaid expenses and long-term prepaids used US$0.9 million cash outflow for the six months ended March 31, 2026. For the six months ended March 31, 2025, change in prepaid expenses generated US$0.8 million cash inflow, which led to a US$1.7 million increase in net cash outflow from operating activities. |
| 4) | Change in accounts payable and accrued liabilities generated US$0.8 million net cash inflow for the six months ended March 31, 2026. For the six months ended March 31, 2025, change in accounts payable and accrued liabilities generated net cash inflow of US$1.2 million, which led to a US$0.4 million decrease in net cash inflow from operating activities. |
| 5) | Change in deferred revenue used US$3.8 million net cash outflow for the six months ended March 31, 2026. For the six months ended March 31, 2025, change in deferred revenue used net cash outflow of US$3.3 million, which led to a US$0.5 million increase in net cash outflow from operating activities. |
| 6) | Change in income tax receivable provided US$Nil net cash inflow for the six months ended March 31, 2026. For the six months ended March 31, 2025, the change was a net cash inflow of US$0.4 million, which led to a US$0.4 million decrease in net cash inflow from operating activities. |
| 7) | Change in non-cash items, including depreciation and amortization, gain/loss from disposal of fixed assets, gain from settlement of student-deposit refunds with Renda, deferred income taxes, impairment loss on football matches and stock-based compensation expenses, provided a total of US$2.2 million net cash inflow for the six months ended March 31, 2026. For the six months ended March 31, 2025, the change was a net cash outflow of US$1.1 million, which led to a US$3.3 million increase in net cash inflow in operating activities. |
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Investing Activities:
Net cash used in investing activities was US$0.02 million for the six months ended March 31, 2026. It was the purchase of furniture and fixtures.
Net cash generated in investing activities was US$1.5 million for the six months ended March 31, 2025. It was the proceeds from sale of a real estate property.
Financing Activities:
For the six months ended March 31, 2026, the Company had net cash used by financing activities of US$0.4 million. It was the loan repayment to a third-party.
For the six months ended March 31, 2025, the Company had net cash provided by financing activities of US$Nil.
Off-balance Sheet Arrangements
The Company had not entered into any off-balance sheet transactions or arrangements as at the latest practicable date.
Research and development, patents and licenses
As an education service provider, our business does not rely on research and development. Therefore, we have not incurred research and development expenses for the six months ended March 31, 2026 and 2025.
Trend Information
Other than as disclosed elsewhere in this semi-annual report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition or results of operations.
Critical Accounting Estimates
We prepared our condensed consolidated financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the reported amounts of revenues and expenses during each reporting period. We continually evaluate these estimates and assumptions based on historical experience, knowledge and assessment of current business and other conditions, expectations regarding the future based on available information and reasonable assumptions, which together form a basis for making judgments about matters not readily apparent from other sources.
The following discussion of critical accounting policies and estimates is intended to supplement the significant accounting policies presented in the notes to our condensed consolidated financial statements included in “Item 18: Financial Statements” presented in this Form 6-K, which summarize the accounting policies and methods used in the preparation of those consolidated financial statements. The policies and the estimates discussed below are included here because they require more significant judgments and estimates in the preparation and presentation of our condensed consolidated financial statements than other policies and estimates. Actual amounts could differ materially from those estimated by us at the time our condensed consolidated financial statements are prepared.
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Goodwill
Goodwill is not amortized, but it is tested annually for impairment as of September 30, or more frequently if events or changes in circumstances indicate that those assets might be impaired. Goodwill is tested for impairment at a reporting unit level, which is at the same level or one level below an operating segment. The reporting units that contain goodwill include Professional Training Program reporting unit and Other reporting unit.
We have the option of performing a qualitative assessment of a reporting unit to determine whether a quantitative impairment test is necessary. A qualitative assessment involves evaluating factors to determine the existence of events or circumstances that would indicate whether it is more likely than not that the fair value of the reporting unit to which goodwill belongs is less than its carrying amount. If the qualitative assessment indicates that the fair value of the reporting unit is more likely than not less than the carrying amount, then a quantitative impairment test would be performed.
If a quantitative impairment test is required, the process is to identify potential impairment by comparing the reporting unit’s fair value with its carrying amount. The reporting unit’s fair value is determined using various valuation methodologies including assets-based, income or market approaches. In determining the reporting unit’s fair value, management is required to make judgments and assumptions relating to future cash flows, growth rates and economic and market conditions.
Goodwill under Professional Training Program reporting unit
For the six months ended March 31, 2026, we performed a qualitative assessment of the professional education and training program reporting unit and we concluded there were no indicators of impairment that existed.
Goodwill under Other reporting unit
For the six months ended March 31, 2026, we performed a qualitative assessment of the goodwill from other reporting unit and we concluded there were no indicators of impairment that existed.
Indefinite-lived intangible assets
Indefinite-lived intangible assets are not amortized but instead tested annually for impairment as of September 30, and between semi-annual tests if indicators of potential impairment exist. The Company has the option of performing a qualitative assessment to first determine whether the quantitative impairment test is necessary. This involves an assessment of qualitative factors to determine the existence of events or circumstances that would indicate whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying value. If the qualitative assessment indicates it is not more likely than not that the fair value is less than its carrying value, a quantitative impairment test is not required. Where a quantitative impairment test is required, the procedure is to compare the indefinite-lived intangible asset’s fair value with its carrying amount. An impairment loss is recognized as the difference between the indefinite-lived intangible asset’s carrying amount and its fair value.
Indefinite-lived intangible assets under Professional Training Program reporting unit
For the six months ended March 31, 2026, we performed a qualitative assessment of the professional education and training program reporting unit and we concluded there were no indicators of impairment that existed.
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