The following management's discussion and analysis ("MD&A") should be read in
conjunction with financial statements of Quality Online Education Group Inc.
(ticker symbol: QOEG) for the quarters ended November 30, 2022 and 2021.
Safe Harbor for Forward-Looking Statements
Certain statements included in this MD&A constitute forward-looking statements,
including those identified by the expressions anticipate, believe, plan,
estimate, expect, intend, and similar expressions to the extent they relate to
Quality Online Education Group Inc. (ticker symbol: QOEG) or its management.
These forward-looking statements are not facts, promises, or guarantees; rather,
they reflect current expectations regarding future results or events. These
forward-looking statements are subject to risks and uncertainties that could
cause actual results, activities, performance, or events to differ materially
from current expectations. These include risks related to revenue growth,
operating results, industry, products, and litigation, as well as the matters
discussed in QOEG's MD&A under Risk Factors. Readers should not place undue
reliance on any such forward-looking statements. QOEG disclaims any obligation
to publicly update or to revise any such statements to reflect any change in the
Company's expectations or in events, conditions, or circumstances on which any
such statements may be based, or that may affect the likelihood that actual
results will differ from those set forth in the forward-looking statements.
The following discussion of our financial condition and results of operations
should be read in conjunction with our financial statements and the related
notes included in this report.
Liquidity, Capital Resources and Plan of Operations
Going Concern
Our financial statements appearing elsewhere in this offering circular have been
prepared on a going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business. The
Company's ability to continue as a going concern is contingent upon its ability
to raise additional capital as required. For the quarter ended November 30,
2022, the Company incurred net losses of ($716,497). Initially, we intend to
finance our operations through equity financings.
Our auditors have indicated that these conditions raise substantial doubt about
the Company's ability to continue as a going concern. These financial statements
do not include any adjustments relating to the recoverability and classification
of recorded asset amounts or amounts and classification of liabilities that
might result from this uncertainty.
There are no external sources of liquidity.
Financings and Securities Offerings
Investing Activities.
Since inception, our principal sources of operating funds have been proceeds
from equity financing including the sale of our Common Stock to initial
investors known to management and principal shareholders of the Company. We do
not expect that our current cash on hand will fund our existing operations. We
will need to raise additional capital in order execute our business plan and
growth goals for at least the next twelve-month period thereafter. If the
Company is unable to raise sufficient additional funds, it will have to execute
a slower than planned growth path, reduce overhead and scale back its business
plan until sufficient additional capital is raised to support further
operational expansion and growth. There can be no assurance that such a plan
will be successful.
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Business Strategy
Quality Online Education Group has founded in Aug 2018 in Ontario Canada with a
global reach. We provide comprehensive online English lessons to students around
the world. English education resource is unbalanced between areas. To address
this unmet need, we have developed online and mobile education platforms,
customized the content and optimized the marketing method to provide high
quality yet affordable products that enable students around the world to take
live online English lessons with native English-speaking teachers. We connect
our students with highly qualified teachers who have gone through our rigorous
selection and training process before they deliver lessons. We hire, train, and
manage our tutors from North America and the Philippines.
Our market consists of students from K12 to adults. The lessons we provide are
focused on the interaction and application of English.
We have successfully launched a direct selling model through Mommy Influencer in
different part of Southeast Asia countries. This business model is
cost-effective, saving us significant sales and marketing dollars and build a
better cash flow outlook compared to the competitors who only use online
advertisement. With the proper expansion of operations, coupled with the
replication of our direct selling model to targeted areas around the world more
than 200 cities around the globe, we expect to achieve magnitudes of exponential
growth.
Company's Plan of Operation.
We are launching small group lessons, where one teacher simultaneously teaches
2-4 students online. The one-to-many model has a lower unit price than other
competitors, and may be affordable for more students yet yield a higher margin.
We intend to further develop our sales platform by entering additional cities in
Southeast Asia and other countries in need of English teaching resources. Also,
we plan to develop and launch new product lines such as the test preparation
training for IELTS and non-English types. Our current student base covers Japan,
Thailand, France and Germany. We anticipate a more significant profit margin
through increasing the student retention rate and launching new product lines,
like group lessons.
Results of Operations
Three months ended November 30, 2022, as Compared to three months ended November
30, 2021
Revenue: The Company billed our customers $1.16 million for the three months
ended November 30, 2022 as compared to $0.34 million for the same period of
November 30, 2021. The Company recorded revenue of $0.65 million for the three
months ended November 30, 2022 as compared to $0.21 million for the same period
of November 30, 2021.
Operating expenses: Total operating expenses for the three months ended November
30, 2022 was $1.16 million as compared to $1.91 million for the same period of
November 30, 2021 due to decreased in operating activities namely, consulting
expenses.
Net loss: Net loss for the three months ended November 30, 2022 was $0.72
million as compared to $1.80 million for the same period of November 30, 2021.
Contractual Obligations, Commitments and Contingencies
As of the date there are none.
Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any
off-balance sheet arrangements.
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