UNITED STATES

 

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of December 2021

 

Commission file number: 001-39360

 

 

SKILLFUL CRAFTSMAN EDUCATION

 

TECHNOLOGY LIMITED

 

 

Floor 4, Building 1, No. 311, Yanxin Road

Huishan District, Wuxi

Jiangsu Province, PRC 214000

(Address of Principal Executive Offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.  Form 20-F  ☒          Form 40-F  ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

 

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

 

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

 

 

 

 

 

EXHIBIT INDEX

 

Exhibit Number

Description

99.1 Press release

 

 

 

 

Signature

 

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, thereunto duly authorized.

   

SKILLFUL CRAFTSMAN EDUCATION TECHNOLOGY LIMITED

(Registrant)

   
  By: /s/ Xiaofeng Gao
  Name: Xiaofeng Gao
  Title: Chairman of the Board of Directors and
Co-Chief Executive Officer

 

Date: December 6, 2021

 

 

 

 

Exhibit 99,1

 

Skillful Craftsman Announces Financial Results for The First Six Months of Fiscal Year 2022

 

Continues to Accelerate the Deployment of New Business Strategy and Empower Training Platform with Integrated Metaverse-based Technologies

 

WUXI, China, December 3, 2021 /PRNewswire/ -- Skillful Craftsman Education Technology Ltd. (“the Company”) (NASDAQ: EDTK), an education technology company providing interactive online learning services, today announced its financial results for the first six months of fiscal year 2022 ended September 30, 2021.

 

First Six Months of Fiscal Year 2022 Financial and Operational Highlights

 

All financial figures are in US Dollars unless otherwise noted.

 

• Revenue was $11.9 million, compared with $15.3 million for the same period of last year, representing a 23% decrease, primarily due to a decrease in the number of total fee-paying members resulting from the decline in training needs of workers from rural area as the urbanization continued.

 

• Gross profit was $3.6 million, compared with $8.5 million for the same period of last year, representing a 58% decrease. The decrease was mainly due to the combined effect of the decrease in revenue and an increase in cost of revenue as the Company incurred increased fees in courseware, software copyrights and virtual simulation in connection with its efforts to shift target customers to students at vocational schools.

 

• Gross profit margin was 30%, compared with 55% for the same period of last year. The main reason was the cost spent in platform upgrade and courses enrichment did not result in the expansion of customer base to the extent expected.

 

• Net loss was $43.3 thousand, compared with net income of $4.4 million for the same period of last year. The decrease was due to the decrease in revenue, an increase in the cost of revenue and an increase in general and administrative expenses.

 

• Basic and diluted earnings per share were $0.00, compared with $0.44 for the same period of last year.

 

• Total fee-paying members(1) was 1.1 million, compared with 3.3 million during the same period of last year, representing a 68% decrease. The decrease was primarily due to the combined effect of (i) the shrinking training needs of workers from rural area as a result of the development of urbanization, and (ii) unsatisfactory acquisition of new customers among students at vocational schools, who nowadays tend to be more interested in mobile live streaming and short video training courses than the personal computer courses offered by the Company.

 

 

 

(1) Number of fee-paying members is defined as the total number of members that are paying fees for accessing our platforms as of the end of the applicable period.

 

Mr. Xiaofeng Gao, Chairman and CEO of Skillful Craftsman Education Technology Ltd., commented, “To seize the market opportunities, we have accelerated the deployment of new business strategy and new technology since the first half year of 2021. With respect to business development, the Company is leveraging online cloud technology service and flexible employment service platform, to cooperate with schools and institutions to provide them with high quality vocational training. It has already landed in the two major fields of Chinese medicine basic education and hotel management. With respect to technology enhancement, the Company will integrate metaverse technology with big data, cloud technology and traditional Augmented Reality (AR) simulation teaching capabilities. Through co-constructing metaverse vocational labs with universities and ecological chain companies, the Company plans to launch multi-persons collaborative simulation skills training platform based on metaverse. We remain optimistic about the vocational education industry based on the Opinions on Promoting the High-quality Development of Modern Vocational Education (the “Opinions”) issued by the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council. The Opinions encourage companies to participate in and support the development of vocational education, which provides clear directions and positive incentives for the Company's future development. We believe our brand, strategic development and the supporting policy will position us well for the future and we are confident in creating long-term value and returns for our shareholders.”

 

First Six Months of Fiscal Year 2022 Financial Results

 

All figures refer to the first six months of fiscal year 2022 ended September 30, 2021 unless otherwise stated

 

 

 

 

Revenue

 

Revenue decreased by 23% to $11.9 million, from $15.3 million for the same period of last year, primarily due to a decrease in the number of total fee-paying members resulting from the decline in training needs of workers from rural area as the urbanization continued.

 

Cost of Revenue

 

Cost of revenue increased by 21% to $8.3 million, from $6.8 million for the same period of last year. The increase of cost of revenue was mainly caused by the increase of $0.8 million amortization of the newly purchased courseware and software copyrights, and the increase of virtual simulation fee by $0.6 million, both related to the Company’s efforts to shift target customers to students at vocational schools.

 

Gross Profit and Gross Margin

 

Gross profit decreased by 58% to $3.6 million, from $8.5 million for the same period of last year. The decrease was mainly due to the combined effect of increased cost of revenue in courseware, software copyrights and virtual simulation fees and decrease in revenue.

 

Gross margin decreased by 25 percentage points to 30%, from 55% for the same period of last year. The main reason was the cost spent in platform upgrade and courses enrichment did not result in the expansion of customer base to the extent expected.

 

Operating Expenses

 

Operating expenses increased by 27% to $3.0 million, from $2.4 million for the same period of last year.

 

Sales and marketing expenses decreased by 18% to $0.7 million, from $0.9 million for the same period of last year. The decrease was mainly due to the decreases in both of the promotion expenses and telecommunications service fees.

 

General and administrative expenses increased by 53% to $2.3 million, from $1.5 million for the same period of last year. The increase was primarily caused by the increased compensation paid to employees, audit fees, the insurance fee and consulting fees for the period ended September 30, 2021.

 

Income Before Tax

 

Income before tax expense decreased by 90% to $0.6 million, from $6.1 million for the same period of last year.

 

Net (loss)/Income

 

Net loss was $43.3 thousand, compared with net income of $4.4 million for the same period of last year.

 

Basic and diluted earnings per share were $0.00, compared with $0.44 for the same period of last year.

 

Cash and Cash Equivalents

 

As of September 30, 2021, the Company had cash and cash equivalents of $23.7 million, compared with $17.5 million as of March 31, 2021.

 

Cash Flow

 

Net cash generated from operating activities was $1.8 million, compared with $6.6 million for the same period of last year.

 

Net cash provided by investing activities was $4.4 million, compared with net cash used in investing activities $14.2 million for the same period of last year.

 

Net cash generated from financing activities was nil, compared with $13.24 million for the same period of last year.

 

About Skillful Craftsman

 

Skillful Craftsman is an education technology company that provides interactive online vocational training and virtual simulation experimental training courses. The Company began operations in Wuxi, China in 2013 and is a key supporter for China education reform and development for labor employment. For more information, please visit: ir.kingwayup.com

 

 

 

 

Safe Harbor Statement

 

This report contains “forward-looking statements” for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that represent our beliefs, projections and predictions about future events. All statements other than statements of historical fact are “forward-looking statements,” including any projections of earnings, revenue or other financial items, any statements of the plans, strategies and objectives of management for future operations, any statements concerning proposed new projects or other developments, any statements regarding future economic conditions or performance, any statements of management’s beliefs, goals, strategies, intentions and objectives, and any statements of assumptions underlying any of the foregoing. Words such as “may”, “will”, “should”, “could”, “would”, “predicts”, “potential”, “continue”, “expects”, “anticipates”, “future”, “intends”, “plans”, “believes”, “estimates” and similar expressions, as well as statements in the future tense, identify forward-looking statements.

 

Forward-looking statements are based on information available at the time those statements are made and management’s belief as of that time with respect to future events. These statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievements described in or implied by such statements. Such risks, uncertainties, and other factors include, but are not limited to, our ability to improve launch and leverage new technologies and cooperative relationships or anticipate market demand in a timely or cost-effective manner, and those factors discussed under the headings “Risk Factors”, “Operating and Financial Review and Prospects,” and elsewhere in our Annual Report on Form 20-F. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of whether, or the times by which, our performance or results may be achieved. Actual results may differ materially from expected results described in our forward-looking statements, including with respect to correct measurement and identification of factors affecting our business or the extent of their likely impact, and the accuracy and completeness of the publicly available information with respect to the factors upon which our business strategy is based or the success of our business. The Company disclaims any intention to, and undertakes no obligation to, update or revise any forward-looking statement.

 

For investor and media enquiries, please contact:

 

Skillful Craftsman

 

Investor Relations Department

 

Email: iredtk@kingwayedu.cn

 

Ascent Investor Relations LLC

 

Tina Xiao

 

Tel: +1 917-609-0333

 

Email: tina.xiao@ascent-ir.com

 

 

 

 

SKILLFUL CRAFTSMAN EDUCATION TECHNOLOGY LIMITED

CONSOLIDATED BALANCE SHEETS

(Amounts in US$, except for number of shares)

 

 

    As of  
    September 30,
2021 		    March 31,
2021 		 
    (Unaudited)     (Audited)  
ASSETS     　       　  
Current assets                
Cash and cash equivalents   $ 23,712,359     $ 17,453,360  
Accounts receivable, net     50,246       83,980  
Prepayments     2,903,533       1,784,537  
Other receivables     186,325       5,713,192  
Total current assets     26,852,463       25,035,069  
Non-current assets                
Long-term investment     306,498       -  
Property and equipment, net     12,462,098       13,725,957  
Intangible assets, net     17,144,418       20,416,461  
Goodwill     4,581,112       -  
Long-term prepayments and other non-current assets     -       28,406  
Total non-current assets     34,494,126       34,170,824  
TOTAL ASSETS   $ 61,346,589     $ 59,205,893  
LIABILITIES                
Current liabilities     　       　  
Accounts payable   $ 122,119     $ 113,707  
Taxes payable     292,532       448,485  
Amounts due to a related party     5,764       257,037  
Accrued expenses     920,665       1,051,929  
Deferred tax liabilities     43,234       -  
Deferred revenue-current     9,270,561       11,456,667  
Total current liabilities     10,654,875       13,327,825  
Non-current liabilities     　       　  
Deferred revenue-noncurrent     -       312,896  
Total non-current liabilities     -       312,896  
TOTAL LIABILITIES   $ 10,654,875     $ 13,640,721  
COMMITMENTS AND CONTINGENCIES     -       -  
SHAREHOLDERS’ EQUITY                
Ordinary shares, par value $0.0002 per share, 500,000,000 shares authorized; 14,900,000 and 12,000,000 shares issued and outstanding as of 30 September, 2021 and 31 March, 2021, respectively     2,980       2,400  
Additional paid-in capital     18,055,407       13,415,987  
Statutory reserve     746,323       745,590  
Accumulated profits     30,375,080       30,419,177  
Accumulated other comprehensive income     1,511,924       982,018  
TOTAL SHAREHOLDERS’ EQUITY     50,691,714       45,565,172  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 61,346,589     $ 59,205,893  

 

 

 

 

SKILLFUL CRAFTSMAN EDUCATION TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

 (Amounts in US$, except for number of shares)

 

    For the six months ended  
    September 30,  
    2021     2020  
    (Unaudited)     (Unaudited)  
Revenue   $ 11,851,792     $ 15,313,780  
Cost of revenue     (8,255,007 )     (6,826,879 )
Gross income     3,596,785       8,486,901  
                 
Operating expenses:     　       　  
Selling and marketing expenses     (720,191 )     (879,812 )
General and administrative expenses     (2,293,011 )     (1,499,774 )
Total operating expenses     (3,013,202 )     (2,379,586 )
Income from operations     583,583       6,107,315  
Interest income     31,237       30,292  
Investment loss     (1,897 )     -  
Government grant     493       -  
Foreign currency exchange loss     (48,819 )     -  
Loss on disposals of equipment     (54,147 )     -  
Other expenses, net     (2,147 )     (909 )
Income before income taxes     508,303       6,136,698  
Income tax expense     (551,667 )     (1,744,005 )
Net (loss)/income   $ (43,364 )   $ 4,392,693  
　     　       　  
Other comprehensive income/(loss):                
Foreign currency translation adjustment     529,906       1,246,805  
Total comprehensive income     486,542       5,639,498  
Net earnings per ordinary share, basic and diluted   $ 0.00     $ 0.44  
Weighted average number of ordinary shares, basic and diluted     12,475,410       10,000,000  

 

 

 

 

SKILLFUL CRAFTSMAN EDUCATION TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Amounts in US$)

 

 

    For the six months ended September 30,  
    2021     2020  
Cash Flows from Operating Activities     　       　  
Net (loss)/income   $ (43,364 )   $ 4,392,693  
Adjustments to reconcile net profit to net cash provided by operating activities:     　       　  
Depreciation of property and equipment     2,051,081       1,657,961  
Amortization of intangible assets     3,948,391       3,157,605  
Loss from equity-method investment     1,897       -  
Loss on disposals of equipment     54,147       -  
Changes in operating assets and liabilities:                
Accounts receivables, net     33,734       (24,284 )
Prepayments and other current assets     (1,118,873 )     (602,972 )
Other receivables     (19,296 )     -  
Long-term prepayments and other non-current assets     28,406       28,509  
Accounts payable     8,412       (149,822 )
Amounts due to a related party     (251,273 )     509,012  
Deferred revenue     (2,552,387 )     (2,939,360 )
Accrued expenses     (220,164 )     768,911  
Taxes payable     (154,248 )     (213,411 )
Deferred tax liabilities     (730 )     -  
Net cash generated from operating activities     1,765,733       6,584,842  
                 
Cash flows from investing activities     　       　  
Purchase of property and equipment     (653,189 )     (3,988,249 )
Purchase of intangible assets     (209,469 )     (2,254,100 )
Proceed from redemption of financial assets held for trading     5,563,191       -  
Investment in private held company     (308,385 )     -  
Purchase of Jisen Information, net of cash acquired     50,229       -  
Proceed from disposal of equipment     4,650       -  
Purchases of other investments     -       (8,000,000 )
Net cash generated from/(used in) investing activities   $ 4,447,027     $ (14,242,349 )
                 
Cash flows from financing activities     　       　  
Proceeds from IPO net off IPO expenses     -       13,243,554  
Net cash generated from financing activities   $ -     $ 13,243,554  
                 
Effects of foreign currency translation     46,239       (67,122 )
                 
Net increase in cash and cash equivalents     6,258,999       5,518,925  
Cash and cash equivalents at beginning of period     17,453,360       11,931,714  
Cash and cash equivalents at end of period   $ 23,712,359     $ 17,450,639  
                 
Supplemental disclosures of cash flow information     　       　  
Cash paid for income taxes   $ 687,877     $ 1,974,038  
　     　       　  
Non cash transactions                
Ordinary shares issued for Jisen Information acquisition   $ 4,640,000     $ -