Visionary Education Technology Holdings Group Inc. Reports Fiscal Year 2022 Financial Results – PR Newswire

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MARKHAM, Canada, August 12, 2022 /PRNewswire/ — Visionary Education Technology Holdings Group Inc. (the "Company") (Nasdaq: VEDU), a private education provider located in Canada that offers high-quality education resources to students around the globe, today announced its financial results for the fiscal year ended March 31, 2022.
Fiscal Year 2022 Financial Highlights
Mr. David Xu, Chief Executive Officer and Chief Operating Officer of the Company, commented, "In fiscal year 2022, we have invested and consolidated our education resources and built a solid foundation for our future development. On May 17, 2022, we completed our initial public offering, which was an important milestone in the history of the Company. Becoming a publicly traded company provides us with more opportunities to continue developing our education resources. We plan to invest in more profitable and higher growth business areas such as high school education for international students, integrated platform of technology and education, online standardized artificial intelligence driven central platforms and offline personalized education services which are expected to drive exponential tuition revenue growth in the near future. In addition, we intend to close the purchase of the properties at 95-105 Moatfield Drive, Toronto this month. This education facility is expected to generate about $10 million annual rent revenue. Looking forward, we will continue to provide high-quality education to students, execute our strategic initiatives and expand our market share. We believe our organic growth and strategic development will position us well for the future and we are confident in creating long-term values and returns for our shareholders."
Fiscal Year 2022 Financial Results
Revenues
Revenues decreased by $2.5 million, or 32.1%, to approximately $5.2 million in fiscal year 2022 from approximately $7.7 million in fiscal year 2021. The decrease in revenue was principally  because the Company’s sales of vacant land decreased $4.3 million, partially offset by  increased rent revenue of $1.6 million in fiscal year 2022.
For the Year Ended March 31,
2022
2021
($)
Revenue
Cost of Revenue
Gross Margin
Revenue
Cost of Revenue
Gross Margin
Rent
2,298,198
1,322,188
42.5 %
674,898
256,981
61.9 %
Tuition
669,442
319,913
52.2 %
358,241
124,762
65.2 %
Construction
8,117
4,663
42.6 %
78,219
19,529
75.0 %
Vacant land
2,272,704
990,261
56.4 %
6,613,863
3,058,175
53.8 %
Total
5,248,461
2,637,025
49.8 %
7,725,221
3,459,447
55.2 %
Revenue from rent increased by $1.6 million, or 240.5%, to $2.3 in fiscal year 2022 from $0.7 million in fiscal year 2021. The increase in rent revenue was mainly due to the revenue generated from two office buildings purchased by the Company on April 15, 2021. These two office buildings are located in Downtown Markham, Ontario, Canada. In addition, rent revenue from the Company’s facility located in 41 Metropolitan Road, Toronto, Ontario also increased due to an increase in the number of tenants as compared to fiscal year 2021.
Revenue from tuition income increased by $0.3 million, or 86.9%, to $0.7 million in fiscal year 2022 from $0.4 million in fiscal year 2021. The increase in revenue was mainly from newly acquired Max the Mutt College of Animation, a private career college that offers diplomas in Classical & Computer Animation & Production, Illustration & Storytelling for Sequential Arts, and Concept Art for Animation & Video Games, and Lowell Academy, a private high school that offers high school education. Revenue from the Company’s online learning platform, Toronto ESchool remained stable.
Revenue from the decoration and construction business decreased by $70,102, or 89.6%, to $8,117 in fiscal year 2022 from $78,219 in fiscal year 2021. The decrease was mainly due to the negative impact caused by the COVID-19 pandemic and less focus on this business segment. The Company had no significant income from its construction business in fiscal year 2022.
The Company sold 8 lots of vacant land in fiscal year 2022 and generated revenue of approximately $2.3 million. The Company sold 19 lots of vacant land in fiscal year 2021 and generated revenue of approximately $6.6 million. As of March 31, 2022, the Company had no vacant land for future sales.
Gross Profit and Gross Margin
Total cost of revenue decreased by $0.8 million to $2.6 million in fiscal year 2022, from $3.4 million in fiscal year 2021.
Gross profit decreased by $1.7 million, or 5.5%, to $2.6 million in fiscal year 2022, from $4.3 million in fiscal year 2021. Overall gross margin was 49.8% in fiscal year 2022, compared to  55.2% in fiscal year 2021.
Gross margins for rent business, education business, construction business and sales of vacant land were 42.5%, 52.2%, 42.6% and 56.4%, respectively, for fiscal year 2022, compared to 61.9%, 65.2%, 75.0% and 53.8%, respectively, for fiscal year 2021.
General and Administrative Expenses
General and administrative expenses increased by $305,054, or 230.7%, to $437,278 in fiscal year 2022 from $132,224 in fiscal year 2021. The increase was mainly  because the Company recorded arrear interest of $172,993 in fiscal year 2022 due to the late filing of tax returns. In addition, there was increased amortization and utility expenses from the Company’s newly purchased two office buildings in downtown Markham.
Professional Fees
Professional fees increased by $139,119, or 65.8%, to $350,636 in fiscal year 2022 from $211,517 in fiscal year 2021. The increase was mainly due to the increased legal fees and accounting fees related to the Company’s public offering process.
Salaries and Compensations
Salaries and compensations increased by $599,299, or 310.1%, to $792,546 in fiscal year 2022 from $193,247 in fiscal year 2021. The significant increase was mainly due to the expansion of the Company’s educational business and the increased compensation that the Company paid during fiscal year 2022 to attract and retain experienced senior management and professional employees.
Interest Expense, Net
Interest expense increased by $0.8 million, to $0.9 million in fiscal year 2022 from $0.1 million in fiscal year 2021. The significant increase was mainly due to a higher bank loan balance in connection with the purchase of two office buildings located in Downtown Markham, Ontario, Canada. The Company’s outstanding bank loan balance was approximately $18.8 million and $6.4 million as of March 31, 2022 and 2021, respectively.
Government Subsidies
In fiscal year 2022, the Company received $490,171 from the Canada Emergency Wage Subsidy program and Canada Emergency Rent Subsidy program. In fiscal year 2021, the Company applied for total loans of $143,136 under the Canada Emergency Business Account (CEBA) program, of which $45,450 is expected to be forgiven. In addition, the Company received $39,207 from the Canada Emergency Wage Subsidy program in fiscal year 2021. The increase of wage subsidy was consistent with the increase of the Company’s salary and compensation expenses.
Impairment Expenses
In fiscal year 2022, the Company recorded impairment loss of $379,165 for the intangible assets and goodwill in connection with the private high schools and Conbridge College, a private college because the Company is in the process of improving the efficiency of the operations, streamlining the business lines to focus on its core education sector, and optimizing the structure of the vocational educational business.
Other income
The Company had other income of $20,709 in fiscal year 2022. In fiscal year 2021, the Company had other income of $245,109, mainly from the one-time sales of personal protective equipment to one Canadian financial institution during the pandemic.
Provision for Income Taxes
Provision for income taxes decreased by $0.7 million, to $0.3 million for fiscal year 2022 from $1.0 million for fiscal year 2021. The decrease was mainly due to the decreased income before income taxes.
Net Income (Loss)
Net loss was $56,474 for fiscal year 2022, as compared to net income of approximately $2.9 million for fiscal year 2021.
Balance Sheet
As of March 31, 2022, the Company had cash of $0.7 million, as compared to $1.2 million as of March 31, 2021.
Cash Flow
Net cash provided by operating cash flow was $6.4 million in fiscal year 2022, compared to $4.4 million for fiscal year 2021.
Net cash used in investing activities was $24.3 million in fiscal year 2022, compared to $3.1 million in fiscal year 2021. The increase in net cash used in investing activities was primarily attributable to the purchase of two office buildings for approximately $16.9 million in downtown Markham, the deposits of approximately $7.2 million paid to acquire the properties located on 95-105 Moatfield Drive, Toronto, as well as the payments made to acquire various private school licenses and Max the Mutt College of Animation.
Net cash provided by financing activities was $17.5 million in fiscal year 2022, compared to net cash used in financing activities of $0.4 million in fiscal year 2021. The increase in net cash provided by financing activities in fiscal year 2022 was primarily attributable to the mortgages the Company obtained from HSBC Bank. In connection with the purchase of the two office buildings, on April 15, 2021, the Company obtained bank loans of $7.2 million (C$9.0 million) and $5.6 million (C$7.0 million) respectively from HSBC Bank.
Recent Development
Initial Public Offering
On May 19, 2022, the Company closed its IPO of 4,250,000 Common Shares at a public offering price of $4.00 per share for gross proceeds of $17.0 million. The total net proceeds to the Company from the IPO, after deducting discounts, expense allowance, and expenses, were approximately $14.3 million. Following the closing of the Offering, the Company has a total of 39,250,000 Common Shares issued and outstanding. In connection with the offering, the Company’s common shares began trading on the NASDAQ under the symbol "VEDU."
Acquisition of Griggs International Academy China Co. Ltd.
On July 14, 2022, the Company entered into a Capital Increase and Share Expansion Agreement (the "Contribution Agreement") with Griggs International Academy China Co. Ltd. ("Griggs China"), a Hong Kong private consulting and investment holding company offering United States K-12 diploma programs and services of Griggs International Academy USA at four locations in China.. Pursuant to the Contribution Agreement, the Company has agreed to invest $900,000 in Griggs China in exchange for 9,000 newly issued shares of Griggs China, which will equal 90% of issued and outstanding shares of Griggs China. This transaction closed on July 29, 2022.
On July 19, 2022, the Company signed a purchase agreement with the two principal shareholders of Griggs China  to purchase their 1,000 shares for a total consideration of $50,000. The two shareholders will retain 10% of the dividend rights of the Company’s Griggs Program in exchange for the sale of their ordinary shares, and the Company guaranteed to pay an annual minimum of $20,000 and $10,000, respectively, to the two shareholders as a retainer if no dividend is to be declared. The payment of the retainer commences September 1, 2022 and remains in effect until August 31, 2032. After completing this transaction, the Company will own 100% of Griggs China.
About Visionary Education Technology Holdings Group Inc.
Visionary Education Technology Holdings Group Inc., headquartered in Markham, Canada, is a private education provider located in Canada that offers high-quality education resources to students around the globe. The Company aims to provide access to secondary, college, undergraduate and graduate and vocational education to students in Canada through technological innovation so that more people can learn, grow and succeed to their full potential. As a fully integrated provider of educational programs and services in Canada, the Company has been serving and will continue to serve both Canadian and international students. For more information, visit the Company’s website at https://ir.visiongroupca.com.   
Forward-Looking Statements
All statements other than statements of historical fact in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as "believes," "expects," "anticipates," "estimates," "intends," "would," "continue," "should," "may," or similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and in its other filings with the SEC.
For more information, please contact:
Visionary Education Technology Holdings Group Inc.
Investor Relations Department
Email: [email protected]    
Ascent Investors Relations LLC
Tina Xiao
President
Phone: +1 917-609-0333
Email: [email protected] 
VISIONARY EDUCATION TECHNOLOGY HOLDINGS GROUP INC.
CONSOLIDATED BALANCE SHEETS
(IN U.S. DOLLARS) 
March 31,
March 31,
2022
2021
ASSETS
CURRENT ASSETS
Cash
$
741,868
$
1,190,616
Short-term investments
56,021

Accounts receivable, net
1,653
183,690
Accounts receivable – related party

286,272
Prepaid and other receivable
179,647
81,522
Inventories

839,390
Due from related parties
432,676
3,104,042
Loan receivable – current
131,036

Related parties loan receivable – current

105,898
Total current assets
1,542,901
5,791,430
Restricted cash – non-current
67,821

Property, plant and equipment, net
23,240,470
4,469,767
Right of use assets
958,477
35,445
Intangible assets, net
1,082,061
428,061
Acquisition deposits
7,364,241
2,496,790
Goodwill
1,030,399

Loan receivable

127,232
Deferred offering cost
940,214

Related parties loan receivable – non-current

318,377
TOTAL ASSETS
$
36,226,584
$
13,667,102
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable
$
278,544
$
50,198
Accrued liabilities
1,465,318
120,149
Other tax payable
1,435,045
1,020,329
Due to related parties
7,219,022
1,471,191
Deferred revenue
532,520
201,169
Lease liability – current
211,600
16,150
Bank loans – current
542,264
172,629
Income tax payable
1,598,153
1,116,024
Total current liabilities
13,282,466
4,167,839
Deferred tax liabilities
243,762
33,627
Lease liability, non-current
746,877
19,295
Bank loans, non-current
18,278,316
6,214,428
TOTAL LIABILITIES
32,551,421
10,435,189
Commitments
EQUITY
Common shares, no par value, unlimited shares authorized, 35,000,000 issued and outstanding*


Additional paid-in capital
665,985
665,985
Retained earnings
2,587,747
2,577,998
Accumulated other comprehensive income
185,179
163,295
Total shareholders’ equity attributable to the Company
3,438,911
3,407,278
Noncontrolling interest
236,252
(175,365)
Total shareholders’ equity
3,675,163
3,231,913
TOTAL LIABILITIES AND EQUITY
$
36,226,584
$
13,667,102
*
Retroactively restated for effect of recapitalization
VISIONARY EDUCATION TECHNOLOGY HOLDINGS GROUP INC.
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(IN U.S. DOLLARS)
For the Years Ended March 31,
2022
2021
Revenue – rent
$
2,298,198
$
674,898
Revenue – tuition
669,442
358,241
Revenue – construction
8,117
78,219
Revenue – sales of land
2,272,704
6,613,863
Total Revenues
5,248,461
7,725,221
Cost of revenue – rent
1,322,188
256,981
Cost of revenue – tuition
319,913
124,762
Cost of revenue – construction
4,663
19,529
Cost of revenue – sales of land
990,261
3,058,175
Total cost of revenues
2,637,025
3,459,447
Gross Profit
2,611,436
4,265,774
Operating expenses:
General and administrative expenses
437,278
132,224
Professional fees
350,636
211,517
Salaries
792,546
193,247
Total operating expenses
1,580,460
536,988
Income from operations
1,030,976
3,728,786
Other (expense) income
Interest expense
(906,398)
(141,690)
Impairment loss
(379,165)

Government subsidies
490,171
84,657
Other income
20,709
245,019
Total other (expense) income, net
(774,683)
187,986
Income before income taxes
256,293
3,916,772
Provision for income taxes – current
(312,767)
(1,003,126)
Net (loss) income
(56,474)
2,913,646
Less: net loss (income) attributable to noncontrolling interest
66,223
(46,789)
Net income attributable to Visionary Education Technology Holdings Group
9,749
2,866,857
Other comprehensive income:
Foreign currency translation gain
26,333
164,684
Comprehensive (loss) income
(30,141)
3,078,330
Less: comprehensive loss (income) attributable to noncontrolling interest
61,774
(23,626)
Comprehensive income attributable to Visionary Education Technology Holdings Group
$
31,633
$
3,054,704
Earnings Per share
Basic and diluted
$
(0.00)
$
0.08
Weighted Average Shares Outstanding*
Basic and diluted
35,000,000
35,000,000
  * Retroactively restated for effect of recapitalization
VISIONARY EDUCATION TECHNOLOGY HOLDINGS GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN U.S. DOLLARS)
For the Years Ended March 31,
2022
2021
Cash flows from operating activities:
Net (loss) income
$
(56,474)
$
2,913,646
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
494,729
53,763
Gain recognized on government subsidy
22,883
(45,450)
Impairment loss on intangible assets and goodwill
379,165

Changes in operating assets and liabilities:
Accounts receivable
202,741
(174,982)
Accounts receivable from related party
167,550
(272,700)
Inventories
842,346
2,686,597
Prepayments and other current assets
(97,322)
(77,657)
Due from related party
2,114,745
(2,692,545)
Accounts payables
227,370
37,367
Accrued liabilities
854,071
114,453
Other tax payable
406,999
877,215
Deferred revenue
329,113
9,796
Taxes payable
473,607
1,010,214
Net cash provided by operating activities
6,361,523
4,439,717
Cash flows from investing activities:
Acquisition of business
(471,550)
(151,500)
Acquisition deposit
(17,016,884)
(2,378,418)
Purchase additional shares from NCI

(31,808)
Loan advance to related parties
425,770
(377,785)
Refund of land deposit
52,668

Short-term investment
(55,860)

Loan advance to unrelated parties
(2,979)
(121,200)
Acquisition deposits
(7,215,396)

Net cash used in investing activities
(24,284,231)
(3,060,711)
Cash flows from financing activities:
Proceeds from bank loan
85,909
136,350
Proceeds from mortgage
12,768,000
6,060,000
Finance costs on mortgage
(49,928)
(30,300)
Deferred offering costs
(451,049)

Repayment of mortgage
(469,921)
(2,565,470)
Proceeds (Repayment) of shareholder advance
5,652,248
(3,995,358)
Net cash provided by (used in) financing activities
17,535,259
(394,778)
Effect of exchange rate changes on cash
6,522
96,528
Net increase (decrease) in cash
(380,927)
1,080,756
Cash and restricted cash, beginning of the year
1,190,616
109,860
Cash and restricted cash, end of the year
$
809,689
$
1,190,616
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for income tax
$

$

Cash paid for interest
$
906,398
$
117,708
SOURCE Visionary Education Technology Holdings Group Inc.
Cision Distribution 888-776-0942
from 8 AM – 9 PM ET

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