Fiscal Archives - Benefit Group

February 15, 2023

Mullen Automotive Provides Fiscal First Quarter 2023 Business Update

Momentum Building for All Mullen Automotive Brands

Mullen-GO (formerly I-GO) Now Available at Newgate Motor Group

Newgate Motor Group is authorized distributor of Mullen-GO for Ireland and UK.

BREA, Calif., Feb. 14, 2023 (GLOBE NEWSWIRE) — via InvestorWire — Mullen Automotive, Inc. (NASDAQ: MULN), an emerging electric vehicle (“EV”) manufacturer, today announced a financial update for its fiscal first quarter in 2023 ending December 31, 2022.

Fiscal First Quarter 2023 and Recent Highlights Include:

Mullen completed the purchase of ELMS’ (Electric Last Mile Solutions) assets in an all-cash $105 million purchase in November 2022 on the heels of the successful acquisition of a controlling interest in Bollinger Motors in September 2022.
The Company has over $100 million in cash (includes restricted cash available for Company use) available for operations and investment at December 31, 2022. The Company has additional committed capital of $90 million expected to be received prior to the end of April 2023.
Secured exclusive sales, distribution and branding rights to the new compact electric vehicle, the Mullen-GO (formerly I-GO), and made initial delivery to distribution agent.
Mullen Receives Purchase Order from Randy Marion Automotive Group for 6,000 Class 1 EV Cargo Vans valued at approximately $200 million.
Mullen Automotive Announces Results of Special Shareholder Meeting with Favorable Outcome.
Mullen Automotive, Loop Global and Menzies Aviation Pilot Electric Vehicles and Charging Infrastructure at Los Angeles International Airport (LAX).
Launched “Strikingly Different” US Test Drive Tour of the Mullen FIVE EV Crossover on October 27, 2022, in Pasadena, CA, and continued through nine cities across the southern states, concluding with the successful close on Dec. 16^th in Charlotte, NC. The second leg of the tour will continue in the Summer of 2023 and include the debut of the Mullen FIVE RS.

Management Commentary

“In a very short period of time we have built Mullen into an emerging leader in the electric vehicle (EV) industry, accomplishing a number of synergistic acquisitions, forging key partnerships and achieving important milestones,” said David Michery, Mullen’s CEO and Chairman. “With the launch of the Mullen Five Tour and our acquisitions, we are in a unique position among new electric vehicle producers, with both retail and commercial vehicles coming to market. With the recent addition of Bollinger and ELMS, we now have the portfolio in place from class 1 through 6, allowing us to drive the company toward production of our industry-leading electric vehicles.”

Electric Last Mile (ELMS) Update

ELMS (Electric Last Mile Solutions), the $105 million all cash acquisition of assets in November included: the factory in Mishawaka, Indiana, providing Mullen with the capability to produce in excess of 50,000 vehicles per year, all intellectual property, including all manufacturing data that is required for the assembly of the Class 1 van and Class 3 Cab Chassis, all inventory including finished and unfinished vehicles, part modules, component parts, raw materials, tooling all property including equipment, machinery, supplies, computer hardware, software, communication equipment, data networks and all other data storage.

Mullen-GO (formerly I-GO) Status

In addition, our move into Europe took important first steps in our fiscal second quarter commencing January 1, 2023, as we made initial delivery to our marketing, sales, distribution, and servicing agent, Newgate Motor Group. The first Mullen-GO vehicles are available for pre-order at an expected starting price of $11,999 plus VAT and local transportation charges. There is high demand for ready-to-market compact electric vehicles in Europe and Mullen has seized the opportunity to extend its branding and marketing reach to the European market through its partnership with the manufacturers of the Mullen-GO.

Mullen Signs First Commercial Dealership Partner in Charlotte, NC

Mullen announced a purchase order for 6,000 Class 1 EV cargo vans from Randy Marion Isuzu, LLC (“RMI”), a member of the Randy Marion Automotive Group (“RMA”) in mid-December. The firm order agreement is valued at approximately $200 million. RMA is Mullen’s first commercial dealer partner to offer sales, service, and parts for Mullen Automotive’s commercial vehicle lineup.

Menzies Aviation Partners with Mullen in LAX Pilot Program

Last week, we announced that Menzies Aviation, with over 8,000 vehicles in its global fleet, has started the evaluation of Mullen Class 1 EV cargo vans along with EV charging infrastructure from Loop Global across its operations at Los Angeles International Airport (LAX). Mullen and Menzies have commenced a 60-day pilot program that will evaluate the Class 1 electric vehicle (EV) cargo vans in several use cases across Menzies’ LAX operations.

Positive Implications of Special Shareholder Meeting Results

Concerning the Special Meeting of Mullen Shareholders, after removing certain items initially slated for consideration by Shareholders, all remaining proposals were approved. This included the implementation of a reverse stock split, which the company does not plan to enact in the event the stock eclipses the $1 mark between now and September 6^th. Should the price of the Mullen common stock not reach $1 per share, management plans to implement the reverse split at a magnitude determined at that time.

Also at the Special meeting, shareholders approved the proposal to increase the Company’s authorized Common Share capital from 1.75 billion to 5 billion shares. The Company’s authorized preferred stock is 500,000,000 shares. As a result, Mullen’s authorized capital stock increased from 2.25 billion shares to 5.5 billion shares.

Mullen FIVE Completes Successful U.S. Test Drive Tour in Late 2022

In the first fiscal quarter, we completed the FIVE EV Crossover “Strikingly Different” test drive tour, a successful national tour of nine cities. We experienced an overwhelming response from the consumer. In the Summer of 2023, Mullen will be launching the second leg of the “Strikingly Different” Tour with a focus on the East Coast, Midwest and northwest before finishing up in northern California. The second leg of the tour will feature the Mullen FIVE RS, which is a high-performance EV sport crossover featuring 1,100 horsepower, a top speed of 200 mph and acceleration from 0-60 mph in just 1.9 seconds.

Mullen Production Outlook

Looking forward, quite simply our objective is to move our commercial vehicles from product development to production, including the necessary steps of completing certification. As we have said, retail production of the Mullen FIVE and the Bollinger B1 and B2 are planned to be in our Mishawaka, Indiana facility, while the commercial vehicles are planned to be assembled and manufactured in our Tunica, Mississippi facility. Our current plan is to start production of the Mullen FIVE in the fourth quarter 2024, first quarter of 2025. Bollinger B4 start of production is planned for the first quarter of 2024.

Financial Results

The Net loss attributable to common shareholders was $376.9 million and $156.1 million for the three months ended December 31, 2022, and 2021, respectively. The net loss per share was $0.28 for the three months ended December 31, 2022, as compared to a net loss per share of $8.93 for the three months ended December 31, 2021. Weighted average shares outstanding were 1.36 billion at December 31, 2022 and 17.5 million at December 31, 2021.

The $220.9 million or 142{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase in net loss attributable to common shareholders was primarily due to a $164.0 million increase in non-cash financing expenses and $59.6 million increase in operating losses for ramping-up development efforts and reflecting the addition expenses from the acquisition of Bollinger Motors and the purchase of ELMS assets.

Following is our unaudited Condensed Consolidated Statements of Operations for the three months ended December 31, 2022, and 2021:

MULLEN AUTOMOTIVE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)


	Three months ended December 31,
	2022			2021
OPERATING EXPENSES
General and administrative	$	64,996,011		$	12,901,084
Research and development		8,622,009			1,157,323
Total Operating Expense		73,618,020			14,058,407
Loss from Operations		(73,618,020	)		(14,058,407	)

Other financing costs – initial recognition of derivative liabilities		(255,960,025	)		(108,979,229	)
Gain / (loss) extinguishment of debt, net		(6,412,170	)		74,509
Revaluation of derivative liabilities		(40,781,976	)		(10,618,382	)
Interest expense		(2,828,089	)		(3,226,769	)
Loan amortization expense		—			(19,212,176	)
Deferred tax benefit		493,654			—
Other income (expense), net		645,881			(41,096	)
Net loss before accrued preferred dividends and noncontrolling interest		(378,460,745	)		(156,061,550	)

Net loss attributable to noncontrolling interest		2,184,959			—
Net loss attributable to shareholders		(376,275,786	)		(156,061,550	)

Accrued preferred dividends		(638,677	)		—

Net Loss attributable to common shareholders	$	(376,914,463	)	$	(156,061,550	)

Net loss per share	$	(0.28	)	$	(8.93	)

Weighted average shares outstanding, basic and diluted		1,360,570,075			17,471,173

For the quarter ended December 31, 2022, there were significant, non-cash expenses (approximately $306.0 million) relating to debt and equity issuances and non-cash interest. It is useful to review the operating and investing sections of the cash flow report to understand cash spend for the quarter given the large amount of non-cash charges.

Non-cash charges are detailed in the operating section of the cash flow statement below. Cash flow activity for the quarter ended December 31, 2022, shows a net loss before accrued preferred dividends and noncontrolling interest of $378.5 million, non-cash adjustment add-backs of approximately $347.7 million and operating asset and liability changes of $2.4 million. In summary, cash flows from operating activities were $33.2 million and cash flows from investing activities were $93.7 million (primarily ELMS asset purchase), offset by cash inflows from financing activities of $150.0 million for the three months ended December 31, 2022.

MULLEN AUTOMOTIVE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)


	Three Months Ended December 31,
	2022			2021
Cash Flows from Operating Activities
Net loss attributable to shareholders	$	(378,460,745	)	$	(156,061,550	)
Adjustments to reconcile net loss attributable to shareholders to net cash used in operating activities:

Depreciation and amortization		4,794,327			307,699
Officer and employee stock compensation		36,305,972			1,604,293
Revaluation of derivative liabilities		40,781,976			10,618,382
Issuance of shares for services		4,376,438			2,495,487
Issuance of stock to directors		71,000			—
Other financing costs – initial recognition of derivative liabilities		255,960,025			108,979,229
Gain on conversion of derivative liabilities to common stock		(9,965,728	)		—
Non-cash financing loss on over-exercise of warrants		8,934,892			—
Non-cash interest and other operating activities		—			3,062,048
Non-cash lease expense		—			136,938
Amortization of debt discount		—			19,212,176
Loss on asset disposal		—			1,298
Loss (gain) on extinguishment of debt		6,412,171			(74,509	)
Loss on debt settlement		—			41,096

Changes in operating assets and liabilities:
Other current assets		(8,260,125	)		(1,226,376	)
Other assets		(197,199	)		(1,225,252	)
Accounts payable		7,724,852			(977,783	)
Accrued expenses and other liabilities		(1,576,292	)		(1,468,751	)
Deferred tax liability		(419,077	)		—
Lease liabilities		289,821			(137,228	)
Net cash used in operating activities		(33,227,692	)		(14,712,803	)

Cash Flows from Investing Activities
Purchase of equipment		(726,482	)		(10,462,219	)
Purchase of intangible assets		(74,826	)		—
ELMS asset purchase		(92,916,874	)		—
Net cash used in investing activities		(93,718,182	)		(10,462,219	)

Cash Flows from Financing Activities
Proceeds from issuance of notes payable		150,000,000			7,300,000
Proceeds from issuance of common stock		—			10,894,659
Proceeds from issuance of preferred stock		—			20,000,000
Payment of notes payable		—			(13,000,351	)
Net cash provided by financing activities		150,000,000			25,194,308

Increase in cash		23,054,126			19,286
Cash, cash equivalents and restricted cash, beginning of period		84,375,085			42,174
Cash, cash equivalents and restricted cash, ending of period	$	107,429,211		$	61,460

Supplemental disclosure of Cash Flow information:
Cash paid for interest	$	3,056		$	1,424,345
Supplemental Disclosure for Non-Cash Activities:
Debt conversion of common stock	$	1,096,787		$	—
Preferred shares issued in exchange for convertible debt	$	—		$	24,991,755
Convertible notes conversion to common stock	$	59,402,877		$	—
Exercise of warrants recognized earlier as liabilities	$	84,799,179		$	—

The Company has over $100 million in cash (includes restricted cash available for Company use) available for operations and investment at December 31, 2022. The Company has additional committed capital of $90 million expected to be received prior to the end of April 2023. Balance sheets as of December 31, 2022, and 2021 are as follows:

MULLEN AUTOMOTIVE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)


	December 31, 2022			September 30, 2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	68,071,635		$	54,085,685
Restricted cash		39,357,576			30,289,400
Receivable for over issuance of shares		17,909,254			—
Inventory		6,958,158			—
Prepaid expenses and other current assets		3,260,726			1,958,759
TOTAL CURRENT ASSETS		135,557,349			86,333,844
Property, equipment and leasehold improvements, net		89,796,658			14,803,716
Intangible assets, net		113,377,931			93,947,018
Deposit on ELMS purchase		—			5,500,000
Accounts receivable from related party		1,232,387			1,232,387
Right-of-use assets		4,763,589			4,597,052
Goodwill		92,834,832			92,834,832
Other assets		3,389,293			3,345,631
TOTAL ASSETS	$	440,952,039		$	302,594,479

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable	$	14,123,277		$	6,398,425
Accrued expenses and other current liabilities		6,225,969			7,185,881
Dividends payable		8,400,933			7,762,255
Derivative liabilities		261,480,084			84,799,179
Liability to issue shares		11,599,598			10,710,000
Lease liabilities, current portion		1,696,626			1,428,474
Notes payable, current portion		93,837,257			3,856,497
Other current liabilities		103,372			90,372
TOTAL CURRENT LIABILITIES		397,467,116			122,231,083
Notes payable, net of current portion		4,890,475			5,164,552
Lease liabilities, net of current portion		3,381,024			3,359,354
Deferred tax liability		14,463,705			14,882,782
TOTAL LIABILITIES		420,202,320			145,637,771
Commitments and contingencies (Note 17)

STOCKHOLDERS’ EQUITY
Preferred stock, $0.001 par value, 500,000,000 preferred shares authorized
Preferred Series A; 200,000 shares authorized; 1,924 and 1,924 shares issued and outstanding at December 31, 2022 and September 30, 2022 respectively.		2			2
Preferred Series C; 40,000,000 shares authorized; 1,210,056 and 1,360,321 shares issued and outstanding at December 31, 2022 and September 30, 2022 respectively.		1,210			1,360
Preferred Series D; 437,500,001 shares authorized; 363,098 and 4,359,652 shares issued and outstanding at December 31, 2022 and September 30, 2022 respectively.		363			4,359
Preferred Series AA; 1 share authorized; 1 and zero shares issued and outstanding at December 31, 2022 and September 30, 2022 respectively.		—			—
Common Stock; $0.001 par value; 1,750,000,000 shares authorized; 1,693,663,180 and 833,468,180 shares issued and outstanding at December 31, 2022 and September 30, 2022 respectively.		1,693,663			833,468
Additional Paid-in Capital		1,189,162,862			947,765,155
Accumulated Deficit		(1,266,183,241	)		(889,907,455	)
Non-controlling interest		96,074,860			98,259,819
TOTAL STOCKHOLDERS’ EQUITY		20,749,719			156,956,708
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	440,952,039		$	302,594,479

About Mullen:

Mullen Automotive (NASDAQ: MULN) is a Southern California-based automotive company building the next generation of premium electric vehicles (EVs) that are affordable and built entirely in the United States. With an end-to-end ecosystem that supports owners from test driving to financing and servicing through a unique hybrid dealership model, customers are supported through every aspect of EV ownership. Mullen’s EV development portfolio includes the Mullen FIVE EV Crossover, Mullen Commercial Class 1-6 EVs and Bollinger Motors, which features both the B1 and B2 electric SUV trucks and commercial offerings. The Mullen FIVE, the Company’s first electric crossover, is slated for first production builds in 2024 and features an award-winning design and its patented PERSONA technology that utilizes facial recognition to personalize the driving experience for every individual. On Sept. 7, 2022, Bollinger Motors became a majority-owned EV truck company of Mullen Automotive and on Dec. 1, 2022, Mullen closed on the acquisition of all Electric Last Mile Solutions’ (“ELMS”) assets including IP and a 650,000 square foot plant in Mishawaka, Indiana.

For more information, please visit www.MullenUSA.com.

Mullen uses its investor.mullenusa.com webpage and links as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Forward-Looking Statements

Certain statements in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1934, as amended. Any statements contained in this press release that are not statements of historical fact may be deemed forward-looking statements. Words such as “continue,” “will,” “may,” “could,” “should,” “expect,” “expected,” “plans,” “intend,” “anticipate,” “believe,” and “estimate,” “predict,” “potential” and similar expressions are intended to identify such forward-looking statements. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, many of which are generally outside the control of Mullen and are difficult to predict. Examples of such risks and uncertainties include, but are not limited to: whether the ELMS and Bollinger transactions will prove successful, whether the Mullen-GO (formerly I-GO initiatives) in the UK and Ireland or elsewhere in Europe will prove successful, whether the respective parties obligations under the Randy Marion Automotive Group purchase order will be met, whether the Loop Global and Menzies initiative will be a success, whether the second leg of the “Strikingly Different” test-drive tour event will take place within the time frame expected; or whether development of the Mullen FIVE RS will be implemented in time for the anticipated second part of the test-drive tour. Additional examples of such risks and uncertainties include, but are not limited to: (i) Mullen’s ability (or inability) to obtain additional financing in sufficient amounts or on acceptable terms when needed; (ii) Mullen’s ability to maintain existing, and secure additional, contracts with manufacturers, parts and other service providers relating to its business; (iii) Mullen’s ability to successfully expand in existing markets and enter new markets; (iv) Mullen’s ability to successfully manage and integrate any acquisitions of businesses, solutions or technologies; (v) unanticipated operating costs, transaction costs and actual or contingent liabilities; (vi) the ability to attract and retain qualified employees and key personnel; (vii) adverse effects of increased competition on Mullen’s business; (viii) changes in government licensing and regulation that may adversely affect Mullen’s business; (ix) the risk that changes in consumer behavior could adversely affect Mullen’s business; (x) Mullen’s ability to protect its intellectual property; and (xi) local, industry and general business and economic conditions. Additional factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements can be found in the most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K filed by Mullen with the Securities and Exchange Commission. Mullen anticipates that subsequent events and developments may cause its plans, intentions, and expectations to change. Mullen assumes no obligation, and it specifically disclaims any intention or obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law. Forward-looking statements speak only as of the date they are made and should not be relied upon as representing Mullen’s plans and expectations as of any subsequent date.

Contact:

Mullen Automotive, Inc.

+1 (714) 613-1900

www.MullenUSA.com

Investor Relations Contact

investor@Mullenusa.com

Media Contact

media@Mullenusa.com

Wire Service Contact:
InvestorWire (IW)
Los Angeles, California
www.InvestorWire.com
212.418.1217 Office
Editor@InvestorWire.com

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/90022111-1416-44f4-b261-d8d63223f756

February 9, 2023

Digital Turbine Reports Fiscal 2023 Third Quarter Financial Results

Third Quarter Revenue Totaled $162.3 Million

Third Quarter GAAP Net Income of $4.0 Million and GAAP EPS of $0.04; Third Quarter Non-GAAP
Adjusted Net Income¹ of $30.2 Million and Non GAAP EPS of $0.29

Third Quarter Non-GAAP Adjusted EBITDA² Totaled $40.0 Million

AUSTIN, Texas, Feb. 8, 2023 /PRNewswire/ — Digital Turbine, Inc. (Nasdaq: APPS) announced financial results for the fiscal third quarter ended December 31, 2022.

Recent Financial Highlights:

Fiscal third quarter of 2023 revenue totaled $162.3 million representing a 25{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} decline year-over-year as compared to the fiscal third quarter of 2022.
GAAP net income for the fiscal third quarter of 2023 was $4.0 million, or $0.04 per share, as compared to GAAP net income for the fiscal third quarter of 2022 of $7.0 million, or $0.07 per share. Non-GAAP adjusted net income¹ for the fiscal third quarter of 2023 was $30.2 million, or $0.29 per share, as compared to Non-GAAP adjusted net income¹ of $50.9 million, or $0.49 per share, in the fiscal third quarter of 2022.
Non-GAAP adjusted EBITDA² for the fiscal third quarter of 2023 was $40.0 million, as compared to Non-GAAP adjusted EBITDA² of $57.0 million in the fiscal third quarter of 2022.
GAAP cash provided by operating activities was $33.2 million in the fiscal third quarter of 2023. Non-GAAP free cash flow³ was $29.9 million in the fiscal third quarter of 2023.

“While nothing has changed regarding our long-term view of the digital media industry or our strategic positioning within the industry, macro headwinds are impacting our near-term results,” said Bill Stone, CEO. “We expect current macro headwinds to continue into the first half of the calendar year, but our high-level strategic vision remains intact, as advertising spending tends to be among the first items to be negatively impacted at the onset of a cyclical downturn, but is typically also among the first items to rebound. We remain laser-focused on the execution of our core growth objectives, and effectively controlling that which we can control. We are making important progress on our SingleTap licensing business, new ad tech platform enhancements, and other initiatives that opportunistically leverage our on-device presence and first-party data. The history of Digital Turbine shows that we have successfully navigated challenges far more difficult than today’s macro environment, emerging stronger and better-positioned for long-term growth. We remain optimistic that we have the right culture, team, strategy and focus to win.”

Fiscal 2023 Third Quarter Financial Results

Total revenue for the third quarter of fiscal 2023 was $162.3 million. Total On-Device Solutions revenue before intercompany eliminations was $96.3 million. Before intercompany eliminations, total revenue from our App Growth Platform was $67.4 million.

GAAP net income for the third quarter of fiscal 2023 was $4.0 million, or $0.04 per share, as compared to GAAP net income of $7.0 million, or $0.07 per share for the third quarter of fiscal 2022. Non-GAAP adjusted net income¹ for the third quarter of fiscal 2023 was $30.2 million, or $0.29 per share, as compared to Non-GAAP adjusted net income of $50.9 million, or $0.49 per share, in the third quarter of fiscal 2022.

Non-GAAP adjusted EBITDA² for the third quarter of fiscal 2023 was $40.0 million, as compared to Non-GAAP adjusted EBITDA of $57.0 million in the third quarter of fiscal 2022. The reconciliations between GAAP and Non-GAAP financial results for all referenced periods are provided in the tables immediately following the Unaudited Condensed Consolidated Statements of Cash Flows below.

Business Outlook

Based on information available as of February 8, 2023, the Company currently expects the following for the full-year fiscal 2023:

Revenue of between $660 million and $670 million
Non-GAAP adjusted EBITDA² of between $165 million and $170 million
Non-GAAP adjusted EPS¹ of $1.15 to $1.20, based on approximately 104 million diluted shares outstanding and an effective tax rate of 25{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

It is not reasonably practicable to provide a business outlook for GAAP net income because the Company cannot reasonably estimate the changes in stock-based compensation expense, which is directly impacted by changes in the Company’s stock price, or other items that are difficult to predict with precision.

About Digital Turbine, Inc.

Digital Turbine is the leading independent mobile growth platform and levels up the landscape for advertisers, publishers, carriers and OEMs. By integrating a full ad stack with proprietary technology built into devices by wireless operators and OEMs, Digital Turbine supercharges advertising and monetization. The company is headquartered in Austin, Texas, with global offices in New York, Los Angeles, San Francisco, London, Berlin, Singapore, Tel Aviv and other cities serving top agency, app developer and advertising markets. For additional information visit www.digitalturbine.com.

Conference Call

Management will host a conference call today at 4:30 p.m. ET to discuss its fiscal 2023 third quarter financial results and provide operational updates on the business. To participate, interested parties should dial 888-317-6003 in the United States, or 412-317-6061 from international locations, and enter access code 7637186. A webcast of the conference call will be available at ir.digitalturbine.com/events.

For those who are not able to join the live call, a playback will be available through February 15, 2023. The replay can be accessed by dialing 877-344-7529 in the United States or 412-317-0088 from international locations, passcode 4128001.

The conference call will discuss forward guidance and other material information.

Use of Non-GAAP Financial Measures

To supplement the Company’s condensed consolidated financial statements presented in accordance with GAAP, Digital Turbine uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP adjusted net income and earnings per share (“EPS”), non-GAAP adjusted EBITDA, non-GAAP free cash flow and non-GAAP gross profit. Reconciliations to the nearest GAAP measures of all non-GAAP measures included in this press release can be found in the tables below.

Non-GAAP measures are provided to enhance investors’ overall understanding of the Company’s current financial performance, prospects for the future and as a means to evaluate period-to-period comparisons. The Company believes that these non-GAAP measures provide meaningful supplemental information regarding financial performance by excluding certain expenses and benefits that may not be indicative of recurring core business operating results. The Company believes the non-GAAP measures that exclude such items when viewed in conjunction with GAAP results and the accompanying reconciliations enhance the comparability of results against prior periods and allow for greater transparency of financial results. The Company believes non-GAAP measures facilitate management’s internal comparison of its financial performance to that of prior periods as well as trend analysis for budgeting and planning purposes. The presentation of non-GAAP measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

¹Non-GAAP adjusted net income and EPS are defined as GAAP net income and EPS adjusted to exclude the effect of stock-based compensation expense, amortization of intangibles, change in fair value of contingent liability, transaction-related expenses and severance costs. Readers are cautioned that non-GAAP adjusted net income and EPS should not be construed as an alternative to comparable GAAP net income figures determined in accordance with U.S. GAAP as an indicator of profitability or performance, which is the most comparable measure under GAAP.

²Non-GAAP adjusted EBITDA is calculated as GAAP net income excluding the following cash and non-cash expenses: stock-based compensation expense, depreciation and amortization, net interest income/(expense), change in fair value of contingent liability, foreign exchange transaction gains/(losses), income tax provision, transaction-related expenses and severance costs. Non-GAAP adjusted EBITDA margin is calculated as non-GAAP adjusted EBITDA as a percentage of total revenue. Readers are cautioned that non-GAAP adjusted EBITDA should not be construed as an alternative to net income determined in accordance with U.S. GAAP as an indicator of performance, which is the most comparable measure under GAAP.

³Non-GAAP free cash flow, which is a non-GAAP financial measure, is defined as net cash provided by operating activities (as stated in our Condensed Consolidated Statements of Cash Flows), excluding transaction-related expenses and severance costs, reduced by capital expenditures. Readers are cautioned that free cash flow should not be construed as an alternative to net cash provided by operating activities determined in accordance with U.S. GAAP as an indicator of profitability, performance or liquidity, which is the most comparable measure under GAAP.

⁴Non-GAAP gross profit is defined as GAAP income from operations adjusted to exclude the effect of product development costs, sales and marketing costs, general and administrative costs and depreciation of software. Readers are cautioned that non-GAAP gross profit should not be construed as an alternative to income from operations determined in accordance with U.S. GAAP as an indicator of profitability or performance, which is the most comparable measure under GAAP.

Non-GAAP adjusted EBITDA, non-GAAP adjusted net income and EPS, non-GAAP free cash flow and non-GAAP gross profit are used by management as internal measures of profitability and performance. They have been included because the Company believes that the measures are used by certain investors to assess the Company’s financial performance before non-cash charges and certain costs that the Company does not believe are reflective of its underlying business.

Forward-Looking Statements

This news release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements in this news release that are not statements of historical fact and that concern future results from operations, financial position, economic conditions, product releases and any other statement that may be construed as a prediction of future performance or events, including financial projections and growth in various products are forward-looking statements that speak only as of the date made and which involve known and unknown risks, uncertainties and other factors which may, should one or more of these risks uncertainties or other factors materialize, cause actual results to differ materially from those expressed or implied by such statements. These factors and risks include:

a decline in general economic conditions nationally and internationally
decreased market demand for our products and services
market acceptance and brand awareness of our products
risks associated with indebtedness
the ability to comply with financial covenants in outstanding indebtedness
the ability to protect our intellectual property rights
risks associated with adoption of our platform among existing customers (including the impact of possible delays with major carrier and OEM partners in the roll out for mobile phones deploying our platform)
actual mobile device sales and sell-through where our platform is deployed is out of our control
risks associated with our ability to manage the business amid the COVID-19 pandemic and difficult macroeconomic environment
the impact of COVID-19 and the macroeconomic environment on our partners, digital advertising spend and consumer purchase behavior
the impact of COVID-19 and the macroeconomic environment on our results of operations
risks associated with new privacy laws, such as the European Union’s GDPR and similar laws which may require changes to our development and user interface for certain functionality of our mobile platform
risks associated with the activities of advertisers
risks associated with the timing of our platform software pushes to the embedded bases of carrier and OEM partners
risks associated with end user take rates of carrier and OEM software pushes which include our platform
new customer adoption and time to revenue with new carrier and OEM partners is subject to delays and factors out of our control
risks associated with fluctuations in the number of our platform slots across US carrier partners
required customization and technical integration which may slow down time to revenue notwithstanding the existence of a distribution agreement
risks associated with delays in major mobile phone launches, or the failure of such launches to achieve the scale
customer adoption that either we or the market may expect
the difficulty of extrapolating monthly demand to quarterly demand
the challenges, given the Company’s comparatively small size, to expand the combined Company’s global reach, accelerate growth and create a scalable, low-capex business model that drives EBITDA (as well as adjusted EBITDA)
ability as a smaller company to manage international operations
varying and often unpredictable levels of orders; the challenges inherent in technology development necessary to maintain the Company’s competitive advantage such as adherence to release schedules and the costs and time required for finalization and gaining market acceptance of new products
changes in economic conditions and market demand
rapid and complex changes occurring in the mobile marketplace
pricing and other activities by competitors
technology management risk as the Company needs to adapt to a rapidly developing mobile device marketplace, complex specifications of different carriers and the management of a complex technology platform given the Company’s relatively limited resources
system security risks and cyberattacks
risks and uncertainties associated with the integration of the acquisition of AdColony, including our ability to realize the anticipated benefits of the acquisition
risks and uncertainties associated with the integration of the acquisition of Fyber, including our ability to realize the anticipated benefits of the acquisition
challenges and risks associated with our rapid growth by acquisitions and resulting significant demands on our management and infrastructure
challenges and risks associated with our global operations and related business, political, regulatory, operational, financial, and economic risks as a result of our global operations
other risks including those described from time to time in Digital Turbine’s filings on Forms 10-K and 10-Q with the Securities and Exchange Commission (SEC), press releases and other communications.

You should not place undue reliance on these forward-looking statements. The Company does not undertake to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Investor Relations Contact:

Brian Bartholomew

Digital Turbine, Inc.

[email protected]

Digital Turbine, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income / (Loss)
(Unaudited)
(in thousands, except per share amounts)

	Three months ended December 31,
	2022	2021
Net revenue	$ 162,310	$ 216,818
Costs of revenue and operating expenses
License fees and revenue share	73,370	109,053
Other direct costs of revenue	9,324	9,090
Product development	14,218	13,755
Sales and marketing	16,469	15,857
General and administrative	39,132	39,924
Total costs of revenue and operating expenses	152,513	187,679
Income from operations	9,797	29,139
Interest and other income / (expense), net
Change in fair value of contingent consideration	—	(18,200)
Interest expense, net	(6,913)	(2,195)
Foreign exchange transaction gain	17	2,122
Other income / (expense), net	8	(86)
Total interest and other income / (expense), net	(6,888)	(18,359)
Income before income taxes	2,909	10,780
Income tax provision / (benefit)	(1,153)	3,718
Net income	4,062	7,062
Less: net income attributable to non-controlling interest	43	48
Net income attributable to Digital Turbine, Inc.	4,019	7,014
Other comprehensive income / (loss)
Foreign currency translation adjustment	10,144	(8,389)
Comprehensive income / (loss)	14,206	(1,327)
Less: comprehensive income / (loss) attributable to non-controlling interest	59	(11)
Comprehensive income / (loss) attributable to Digital Turbine, Inc.	$ 14,147	$ (1,316)
Net income per common share
Basic	$ 0.04	$ 0.07
Diluted	$ 0.04	$ 0.07
Weighted-average common shares outstanding
Basic	99,108	96,548
Diluted	103,348	103,287

Digital Turbine, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets
(in thousands, except par value and share amounts)

	December 31, 2022	March 31, 2022
	(Unaudited)
ASSETS
Current assets
Cash	$ 79,307	$ 126,768
Restricted cash	554	394
Accounts receivable, net	231,001	263,139
Prepaid expenses and other current assets	31,912	20,570
Total current assets	342,774	410,871
Property and equipment, net	38,759	31,086
Right-of-use assets	10,973	15,439
Intangible assets, net	395,181	440,589
Goodwill	560,340	559,792
Other non-current assets	4,648	732
TOTAL ASSETS	$ 1,352,675	$ 1,458,509

LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities
Accounts payable	$ 154,320	$ 167,858
Accrued license fees and revenue share	75,380	95,170
Accrued compensation	16,206	28,775
Acquisition purchase price liabilities	—	50,000
Current portion of debt	—	12,500
Other current liabilities	43,460	30,960
Total current liabilities	289,366	385,263
Long-term debt, net of debt issuance costs	422,310	520,785
Deferred tax liabilities, net	18,786	19,976
Other non-current liabilities	14,586	16,270
Total liabilities	745,048	942,294
Commitments and contingencies (Note 13)
Stockholders’ equity
Preferred stock
Series A convertible preferred stock at $0.0001 par value; 2,000,000 shares authorized, 100,000 issued and outstanding (liquidation preference of $1)	100	100
Common stock
$0.0001 par value: 200,000,000 shares authorized; 99,901,328 issued and 99,143,203 outstanding at December 31, 2022; 97,921,826 issued and 97,163,701 outstanding at March 31, 2022	10	10
Additional paid-in capital	810,994	745,661
Treasury stock (758,125 shares at December 31, 2022 and March 31, 2022)	(71)	(71)
Accumulated other comprehensive loss	(44,201)	(39,341)
Accumulated deficit	(161,183)	(191,788)
Total stockholders’ equity	605,649	514,571
Non-controlling interest	1,978	1,644
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 1,352,675	$ 1,458,509

Digital Turbine, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)

	Three months ended December 31,
	2022	2021
Cash flows from operating activities:
Net income	$ 4,062	$ 7,062
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	20,137	15,965
Non-cash interest expense	211	202
Stock-based compensation expense	7,620	5,739
Change in fair value of contingent consideration	—	18,200
Right-of-use asset	(211)	1,319
Deferred income taxes	(266)	4,621
Foreign exchange transaction gain	(31)	(1,603)
(Increase) / decrease in assets:
Accounts receivable, gross	22,900	(42,680)
Allowance for doubtful accounts	760	443
Prepaid expenses and other current assets	(6,789)	(843)
Other non-current assets	(60)	(21)
Increase / (decrease) in liabilities:
Accounts payable	(16,484)	(13,209)
Accrued license fees and revenue share	(3,458)	27,995
Accrued compensation	1,978	12,188
Other current liabilities	2,378	(1,529)
Other non-current liabilities	458	1,859
Net cash provided by operating activities	33,205	35,708

Cash flows from investing activities
Equity investments	(4,000)	—
Business acquisitions, net of cash acquired	(2,708)	(136)
Capital expenditures	(5,668)	(5,281)
Net cash used in investing activities	(12,376)	(5,417)

Cash flows from financing activities
Proceeds from borrowings	18,000	102,779
Payment of debt issuance costs	(94)	(1,056)
Payment of deferred business acquisition consideration	—	(98,175)
Options and warrants exercised	156	659
Payment of withholding taxes for net share settlement of equity awards	(273)	(7,587)
Repayment of debt obligations	(43,000)	(6,367)
Net cash used in financing activities	(25,211)	(9,747)

Effect of exchange rate changes on cash and cash equivalents and restricted cash	1,030	(1,321)

Net change in cash and cash equivalents and restricted cash	(3,352)	19,223

Cash and cash equivalents and restricted cash, beginning of period	83,213	96,217

Cash and cash equivalents and restricted cash, end of period	$ 79,861	$ 115,440

REVENUE BY SEGMENT
(in thousands)
(Unaudited)

	Three months ended December 31,
	2022	2021	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} Change
On Device Solutions	$ 96,316	$ 133,594	(28) {ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
App Growth Platform	67,407	89,113	(24) {ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Elimination	(1,413)	(5,889)	(76) {ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Consolidated	$ 162,310	$ 216,818	(25) {ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

GAAP INCOME FROM OPERATIONS TO NON-GAAP GROSS PROFIT
(in thousands)
(Unaudited)

	Three months ended December 31,
	2022	2021
Net revenue	$ 162,310	$ 216,818
Income from operations	9,797	29,139
Add-back items:
Product development	14,218	13,755
Sales and marketing	16,469	15,857
General and administrative	39,132	39,924
Depreciation of software included in other direct costs of revenue	1,618	753
Non-GAAP gross profit	$ 81,234	$ 99,428
Non-GAAP gross profit percentage	50 {ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	46 {ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}


GAAP NET INCOME TO NON-GAAP ADJUSTED NET INCOME
(in thousands)
(Unaudited)

	Three months ended December 31,
	2022	2021
Net income	$ 4,062	$ 7,062
Add-back items:
Stock-based compensation expense	7,620	5,739
Amortization of intangibles	16,120	13,773
Adjustment to estimated earn-out liability	—	18,200
Transaction-related expenses	1,297	6,167
Severance costs	1,110	—
Non-GAAP adjusted net income	$ 30,209	$ 50,941
Non-GAAP adjusted net income	$ 0.29	$ 0.49
Weighted-average common shares outstanding, diluted	103,348	103,287

GAAP NET INCOME TO NON-GAAP ADJUSTED EBITDA
(in thousands)
(Unaudited)

	Three months ended December 31,
	2022	2021
Net income	$ 4,062	$ 7,062
Add-back items:
Stock-based compensation expense	7,620	5,739
Depreciation and amortization	20,137	15,965
Interest expense, net	6,913	2,195
Other income / (expense), net	(8)	86
Change in fair value of contingent consideration	—	18,200
Foreign exchange transaction gain	(17)	(2,122)
Income tax provision / (benefit)	(1,153)	3,718
Transaction-related expenses	1,297	6,167
Severance costs	1,110	—
Non-GAAP adjusted EBITDA	$ 39,961	$ 57,010

GAAP CASH FLOW FROM OPERATING ACTIVITIES TO NON-GAAP FREE CASH FLOW
(in thousands)
(Unaudited)

	Three months ended December 31,
	2022	2021
Net cash provided by operating activities	$ 33,205	$ 35,708
Capital expenditures	(5,668)	(5,281)
Transaction-related expenses	1,297	6,167
Severance costs	1,110	—
Non-GAAP free cash flow provided by operations	$ 29,944	$ 36,594

SOURCE Digital Turbine, Inc.

September 10, 2022

Stamford finance board sounds alarm on education budget ‘fiscal cliff’

A overall of 120 Stamford faculty positions, at a cost of approximately $8.8 million, are established to expire in the following two yrs, as they are funded as a result of limited-expression COVID-19 aid dollars.

All those positions — which consist of 19.5 kindergarten para-educator comprehensive-time equivalent places, or FTEs, 23 mum or dad facilitators, 21 engineering integration specialists, 8.5 teacher FTEs and 27 protection workers — are at the moment paid for by the next and 3rd installments of the federal Elementary and Secondary University Unexpected emergency Aid funds, also recognized as ESSER II and ESSER III.

The second installment is established to conclude after this university calendar year concludes. The third and most important part of the funds will expire at the finish of the 2023-24 college 12 months.

For the positions to continue being intact past 2024, the district will want to uncover a way to pay for them.

Officials have referred to the phenomena as an oncoming “fiscal cliff.”

In the course of a digital meeting Thursday evening of the Board of Finance, member Mary Lou Rinaldi said she expected the Board of Schooling to devote the the vast majority of the ESSER funds to cash assignments, relatively than use a massive chunk of it to pay out for the 120 positions.

In May well, the Board of Finance agreed to make a college design fund of approximately $20 million by growing property taxes by 1 per cent. Rinaldi mentioned she was nervous about the Board of Education’s dedication to the university construction tasks.

“That fears me mainly because we’ve set in $20 million by way of our endeavours and we had been hoping that the Board of (Education) was likely to be a significant lover in that and we have been going to see a greater part of … ESSER funds created obtainable to stockpile for university construction and renovation,” she stated.

Ryan Fealey, finance director for Stamford Community Educational facilities, responded that the district could not stockpile those people cash, considering that they expire at the conclude of the following university calendar year. Plus, ESSER cash can only be utilised for precise money initiatives these types of as air high quality enhancements and doorways and home windows, for illustration.

The district has fully commited $10 million in ESSER dollars for funds jobs this yr, and will likely use another $4 million of the funds upcoming calendar year on creating advancements, he stated.

Rinaldi mentioned she remained anxious.

“At some place, the funding goes absent … and now the Board of Instruction operating spending budget is heading to balloon, we’re likely to tumble off a cliff to now fund out of tax dollars 120 positions,” she explained.

Fealey stated it is not likely that all of the 120 positions would be funded by way of the functioning price range as soon as federal bucks dried up. He included that predicted raises in wages, health care, transportation, utilities and perhaps special education will drive up the price range request as well.

“ESSER positions are just just one of many pressures coming,” he said.

Throughout a Board of Education and learning conference last month, Fealey projected that the school district’s finances would develop by about 5.3 per cent every of the future two yrs if all of the positions have been to be moved into the working finances. That would be additional than double the working budget’s ordinary enhance of 2.5 per cent just about every calendar year over the earlier eight decades.

Rinaldi cautioned that she would not help a bigger increase.

“I want to go on report just to say that I’m not likely to be in favor of a 6 or 7 {ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase in your functioning finances appear subsequent year or the year soon after,” she mentioned. “There has to be some constraint, especially if the Board of (Education) is critical about this lengthy-selection building. One thing has obtained to give.”

In total, the district has acquired about $55.34 million COVID-19 aid money by several grants, with about $23.8 million remaining to invest in the up coming two faculty decades.

During the conference, board users deliberated in excess of two college-related appropriations: a $40,000 request to update the district’s facilities master strategy, and $400,000 to fund the software course of action for state funding for 4 university developing jobs.

The $40,000 item, which passed unanimously, requires updating the district’s not long ago done grasp facilities approach to replicate adjustments to the reimbursement charge the town receives from the point out.

Below the new rules, the state’s refund amount for new school building in Stamford will be 60 {ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} for the up coming 25 several years, a great deal larger than the 20 p.c amount the metropolis made use of to get.

The new framework will provide much extra funding for Stamford’s bold master strategy to create or extend four schools, like a new K-8 college in south Stamford, and make improvements to lots of other people. The approximated value to apply the whole program is a lot more than $500 million in excess of 12 a long time.

Board associates did not aid the $400,000 appropriation, however, picking out to postpone it an additional month.

The funds would be used to fund the application process for development jobs at Turn of River Middle School, Rippowam Center University, KT Murphy Elementary University and the facility at 83 Lockwood Ave.

The past two properties will be applied to create a south Stamford K-8 school divided amongst the two campuses.

Customers argued that it built minimal feeling to fund the application method for the 4 web pages in advance of revising the grasp amenities plan.

ignacio.laguarda@stamfordadvocate.com

July 24, 2022

TAL Education Group to Announce First Quarter of Fiscal Year 2023 Financial Results on July 29, 2022

BEIJING, July 20, 2022 /PRNewswire/ — TAL Training Group (“TAL” or the “Corporation”) (NYSE: TAL), a sensible mastering solutions service provider in China, right now declared that it will release its unaudited financial outcomes for the to start with quarter of fiscal 12 months 2023 ended May possibly 31, 2022, prior to the industry opens on Friday, July 29, 2022.

The Company will host a corresponding convention call and reside webcast at 8:00 a.m. U.S. Jap Time (8:00 p.m. Beijing Time) on Friday, July 29, 2022.

Remember to observe that you will have to have to pre-register for conference get in touch with participation at https://sign-up.vevent.com/sign-up/BI2f124a2b4d054342a99323e38a074715.

Upon registration, you will obtain an e mail containing participant dial-in figures and special Direct Party Passcode. This facts will allow for you to achieve instant accessibility to the phone. Members might pre-register at any time, such as up to and after the call start out time.

A reside and archived webcast of the meeting contact will be obtainable on the Trader Relations portion of TAL’s site at https://ir.100tal.com/.

About TAL Schooling Group

TAL Training Team is a good learning methods company in China. The acronym “TAL” stands for “Tomorrow Advancing Existence”, which displays our eyesight to boost top discovering alternatives for learners by means of both equally large-high quality instructing and material, as effectively as main edge software of technological know-how in the education practical experience. TAL Education Team provides in depth studying companies to learners from pre-university to the twelfth grade principally by a few adaptable class formats: modest courses, personalised premium expert services, and online courses. Our mastering expert services predominantly include enrichment learnings programs and some academic topics in and out of China. Our ADSs trade on the New York Inventory Exchange below the symbol “TAL”.

For investor and media inquiries, make sure you get hold of:

In China:

Jackson Ding
Investor Relations
TAL Training Group
Tel: +86 10 5292 6669-8809
E mail: ir@tal.com

The Piacente Group, Inc.
Helen Wu
Tel: +86-10-6508-0677
E mail: TAL@thepiacentegroup.com

In the United States:

The Piacente Group, Inc.
Brandi Piacente
Cellphone: +1-212-481-2050
Email: TAL@thepiacentegroup.com

Cision

Check out primary material:https://www.prnewswire.com/information-releases/tal-training-group-to-announce-first-quarter-of-fiscal-12 months-2023-fiscal-benefits-on-july-29-2022-301590086.html

Source TAL Instruction Team

April 15, 2022

China Liberal Education Holdings Limited Reports Financial Results for Fiscal Year 2021

BEIJING, April 14, 2022 /PRNewswire/ — China Liberal Education Holdings Limited (Nasdaq: CLEU) (“China Liberal,” the “Company,” or “we”), a China-based company that provides smart campus solutions and other educational services, today announced its financial results for the fiscal year ended December 31, 2021.

Ms. Ngai Ngai Lam, Chairperson and CEO of China Liberal, commented, “In fiscal year 2021, the COVID-19 pandemic and related travel restrictions negatively impacted our operations and business expansion. Particularly, many Chinese universities and colleges held off on their ‘smart campus’ project plans due to the uncertainties associated with the COVID-19 pandemic. As a result, our revenue decreased by 22.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} year-over-year to $3.91 million from $5.02 million last fiscal year. We strive to drive our business forward despite these short-term challenges and remain optimistic on our business outlook for 2022 and beyond. We have taken actions to strengthen our market position and keep our financials resilient by acquiring Wanwang Investment Limited, which we believe will allow us to enhance our services and products and improve the quality of our programs.”

Ms. Ngai Ngai Lam continued, “We keep optimizing our growth strategies as market dynamics change and continue monitoring our customers’ preferences while focusing investments on our core growth initiatives with the clearest path to profitability. Growing demand for school-enterprise integrated education solutions continues to accelerate the growth of our integrated enterprises and vocational education (tailored job readiness training services). In addition, the acquisition of Wanwang Investment Limited allows us to become an operator of an independent three-year college and a four-year college in China with a total student enrollment of over 4,200, facilitating our strategic transformation and laying a solid new business foundation. I am proud of the team for what we have accomplished together and I am looking forward to building on our momentum.”

Fiscal Year 2021 Financial Highlights

	For the Year Ended December 31,
($ millions, except per share data)	2021	2020	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}Change
Revenue	3.91	5.02	-22.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Gross profit	2.76	2.87	-3.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Gross margin	70.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	57.1{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	13.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Income(loss) from operations	-1.17	1.44	NM
Net income(loss)	-1.25	1.21	NM
Basic and diluted earnings(loss) per share	-0.12	0.21	NM
Note: NM refers to “Not Meaningful”

Revenue decreased by 22.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} year-over-year to $3.91 million for fiscal year 2021 from $5.02 million for fiscal year 2020.
Gross profit decreased by 3.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} year-over-year to $2.76 million for fiscal year 2021 from $2.87 million for fiscal year 2020.
Gross margin increased to 70.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} for fiscal year 2021 from 57.1{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} for fiscal year 2020.
Loss from operations was $1.17 million for fiscal year 2021, compared to income from operations of $1.44 million for fiscal year 2020.
Net loss was $1.25 million for fiscal year 2021, compared to net income of $1.21 million for fiscal year 2020.
Basic and diluted loss per share were $0.12 for fiscal year 2021, compared to basic and diluted earnings per share of $0.21 for fiscal year 2020.

Fiscal Year 2021 Financial Results

Revenue

Revenue decreased by 22.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} year-over-year to $3.91 million for fiscal year 2021 from $5.02 million for fiscal year 2020. The decrease in revenue was mainly attributable to decreased revenue from our technological consulting services for smart campus solutions in fiscal year 2021 as compared to fiscal year 2020, which was mainly caused by a decrease in the average contractual value of smart campus related projects by 70.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} as high value contracts with Fuzhou Melbourne Polytechnic (“FMP”) were mainly completed in 2020.

	For the Year Ended December 31,
($ millions)	2021			2020
Revenue	Revenue	Cost of Revenue	Gross Margin (Loss)	Revenue	Cost of Revenue	Gross Margin
Sino-foreign jointly managed academic programs	2.68	0.36	86.4{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	2.77	0.59	78.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Technological consulting services for smart campus solutions	1.06	0.62	41.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	1.99	1.40	29.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Overseas study consulting services	0.04	0.05	-43.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	0.13	0.09	33.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Tailored job readiness training services	0.14	0.12	15.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	0.08	0.06	15.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Textbook and course material sales	–	–	–	0.05	0.01	80.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Total	3.91	1.15	70.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	5.02	2.15	57.1{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Revenue from Sino-foreign jointly managed academic programs decreased by $0.09 million, or 3.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $2.68 million for fiscal year 2021, from $2.77 million for fiscal year 2020. This decrease was primarily attributed to a decrease in the number of students by 243, or 9.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, from 2,731 students for the year ended December 31, 2020, to 2,488 students for the year ended December 31, 2021, which resulted in a decrease of $254,042 in revenue. The decrease was partially offset by an increase in average tuition fees collected from $1,015 per student in 2020 to $1,076 per student in 2021, which resulted in an increase of $157,510 in revenue. The increase in average tuition fee was mainly caused by an appreciation of Renminbi (“RMB”) against U.S. dollars while the average tuition fee per student in RMB decreased from RMB6,993 ($1,015) in 2020 to RMB6,931 ($1,076) in 2021.

Revenue from providing smart campus related technological consulting services and technical support services for other entities decreased by $0.93 million, or 46.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $1.06 million for fiscal year 2021, from $1.99 million for fiscal year 2020. The decrease in revenue was mainly attributable to a decrease in the average project size from $143,000 per project in 2020 to $58,859 per project in 2021 as compared to 2020. In 2020, we executed three relatively large technological consulting service projects, including the hardware and software installation and digital classrooms for FMP’s experiment-based simulation center for its hotel management major with contract price of RMB5 million ($0.7 million), the digital classrooms for Beijing Institute of Graphic Communications with contract price of approximately RMB1.3 million ($0.2 million) and technical support services provided to a third party enterprise, Wuhan Wangjie Hengtong Information Technology Co., Ltd., with contract price of RMB4.2 million ($612,239). However, in 2021, the 18 projects we worked on were of smaller size and scope and accordingly, the service fees we charged to customers were also smaller. The overall decrease in our revenue from technological consulting services for smart campus solutions reflected the above combined reasons.

Revenue from overseas study consulting services decreased by $0.09 million, or 75.1{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $0.04 million for fiscal year 2021, from $0.13 million for fiscal year 2020. During the years ended December 31, 2021 and 2020, under our service contracts with Beijing Foreign Studies University, we assisted 27 students and 11 students for Russian language training, and 27 students and 22 students for German language training, respectively. We recognized $36,174 in revenue when our performance obligations under the service contracts were satisfied during the fiscal year 2021. The decrease in revenue from overseas study consulting services was mainly attributed to the cancellation of visa applications to Russia and Germany by the students, which is mainly due to the international travel restrictions caused by the COVID-19 pandemic.

Revenue from tailored job readiness training services increased by $0.06 million, or 80.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $0.14 million for fiscal year 2021, from $0.08 million for fiscal year 2020. The increase was mainly attributable to an increase in the number of students who received tailored job readiness training services from 147 in 2020 to 443 in 2021.

Revenue from textbooks and course material sales decreased by $0.05 million, or 100{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to nil for fiscal year 2021, from $0.05 million for fiscal year 2020. The decrease was mainly attributed to a delay in our publisher’s payment cycle due to small publication volume of our textbooks and course materials.

Cost of Revenue

Cost of revenue decreased by $1.01 million, or 46.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $1.15 million for fiscal year 2021, from $2.16 million for fiscal year 2020, primarily due to the reduced average size and scope of the 18 technological consulting service projects we worked on in 2021 compared to projects in 2020, and accordingly costs associated with hardware and components installation in technology consulting services for smart campus related projects decreased in 2021. In addition, our cost associated with Sino-foreign jointly managed academic programs decreased by $0.2 million, or 38.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, in 2021 as compared to 2020, which was mainly attributable to a decrease in salary, welfare and insurance costs of foreigner teachers in Sino-foreign jointly managed academic programs. Due to travel bans or restrictions caused by the COVID-19 pandemic, some foreign teachers were unable to enter China and we engaged more Chinese teachers to provide teaching services to students in 2021.

Gross Profit

Gross profit decreased by $0.11 million, or 3.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $2.76 million for fiscal year 2021, from $2.87 million for fiscal year 2020, while gross profit margin increased by 13.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to 70.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} for fiscal year 2021 from 57.1{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} for fiscal year 2020. The decrease in gross profit was primarily due to a decrease in gross profit contribution from smart campus related technological consulting services, which mainly resulted from the decrease in average project size and average gross profit per project in fiscal year 2021 compared to fiscal year 2020, as we executed more projects with software customization rather than hardware installation in fiscal year 2021. Also, gross profit contribution from overseas study consulting services decreased by 135.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} in fiscal year 2021 compared to fiscal year 2020 due to higher student recruitment costs in 2021. Additionally, gross profit contribution from textbook and course material sales decreased by 100{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} due to the decrease in publication volume.

Operating Expenses

Selling expenses decreased by $76,897, or 166.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $152,759 for fiscal year 2021, from $229,656 for fiscal year 2020. The decrease in selling expenses was primarily attributable to a decrease in depreciation of $18,236 and a decrease in rental expenses by $16,018 when we relocated to a smaller office space due to streamlining of operations, a decrease in salary and employee welfare benefit expenses paid to sales and marketing personnel by $14,893, resulting from cutting down our sales and marketing force, and a decrease in office and other miscellaneous expenses.

General and administrative expenses increased by $2.58 million, or 214.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $3.78 million for fiscal year 2021, from $1.20 million for fiscal year 2020, primarily due to an increase in share-based compensation to employees of $2.3 million, an increase in professional service fees of $72,229, an increase in audit fee of $67,300, an increase in investor relation expenses of $61,376, and an increase in director and officer insurance expenses of $34,127.

Interest Income

Interest income decreased by $7,062, or 7.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $94,195 for fiscal year 2021, from $101,257 for fiscal year 2020. In connection with the technological consulting services for smart campus projects, we recognized financing component resulted from a timing difference between when control was transferred and when we collected cash consideration from the customer. For the years ended December 31, 2021 and 2020, we recognized $87,589 and $94,271 in interest income in connection with the aforementioned financing component, respectively. In addition, we reported interest income of $6,606 and $6,986 from bank deposit balance in the years ended December 31, 2021 and 2020, respectively. These factors led to decreased interest income in fiscal year 2021, as compared to fiscal year 2020.

Other Income (Expense), Net

Other income was $126,648 for fiscal year 2021, as compared to other expense of $26,035 for fiscal year 2020. The increase in other income was primarily due to provision of other training services in fiscal year 2021.

Provision for Income Taxes

Provision for income taxes was $300,034 for fiscal year 2021, decreased from $303,246 for fiscal year 2020 due to lower taxable income.

Net Income (Loss)

Net loss was $1.25 million for fiscal year 2021, compared to net income of $1.21 million for fiscal year 2020. Basic and diluted loss per share were $0.12 for fiscal year 2021, compared to basic and diluted earnings per share of $0.21 for fiscal year 2020.

Financial Condition

As of December 31, 2021, the Company had cash of $32.68 million, compared to $5.01 million as of December 31, 2020.

Net cash used in operating activities was $1.41 million for fiscal year 2021, compared to net cash provided by operating activities of $0.64 million for fiscal year 2020.

Net cash used in investing activities was $7,543 for fiscal year 2021, compared to $1,396,125 for fiscal year 2020.

Net cash provided by financing activities was $29.06 million for fiscal year 2021, compared to $3.97 million for fiscal year 2020.

Impact of the COVID-19 on Performance and Financial Indicators

Our results of operations and financial conditions in 2021 were affected by the COVID-19 pandemic and may continue to be affected by COVID-19 pandemic in 2022 and potentially beyond. COVID-19 has impact on China’s study abroad consulting and training services industry and the business operations of our Company. The extent to which COVID-19 impacts our results of operations in the future will depend on the future developments of the pandemic, including new information concerning the global severity of and actions taken to contain the pandemic, which are highly uncertain and unpredictable. In addition, our results of operations could be adversely affected to the extent that the pandemic harms the Chinese and global economy in general. We face risks related to natural disasters, extreme weather conditions, health epidemics including the COVID-19, and other catastrophic incidents, which could significantly disrupt our operations.

The pandemic and related travel restrictions have affected and may continue to adversely affect our business and results of operations, including the demand for our services and the ability of partner schools to pay back accounts receivable on a timely basis. We will pay close attention to the future development of COVID-19 pandemic and perform further assessment of its impact and take relevant measures to minimize the impact. Uncertainties associated with COVID-19 pandemic may cause the Company’s revenue and cash flows to underperform in the next 12 months.

About China Liberal Education Holdings Limited

China Liberal, headquartered in Beijing, is an educational service provider in China. It provides a wide range of services, including those under sino-foreign jointly managed academic programs; overseas study consulting services; technological consulting services for Chinese universities to improve their campus information and data management system and to optimize their teaching, operating and management environment, creating a “smart campus”; and tailored job readiness training to graduating students. For more information, please visit the Company’s website at ir.chinaliberal.com.

Forward-Looking Statements

This document contains forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s expectations and projections about future events, which the Company derives from the information currently available to the Company. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this press release and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. The Company undertakes no obligation to update 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 risk factors that may affect its future results in the Company’s registration statement and in its other filings with the U.S. Securities and Exchange Commission.

Investor Relations Contact

China Liberal Education Holdings Limited
Email: [email protected]

Ascent Investor Relations LLC
Ms. Tina Xiao
Email: [email protected]
Tel: +1 917 609 0333

CHINA LIBERAL EDUCATION HOLDINGS LIMITED
CONSOLIDATED BALANCE SHEETS


	As of December 31,
	2021		2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	32,678,421	$	5,007,449
Account receivables		2,462,550		915,618
Contract assets,		2,014,146		4,448,946
Advance to suppliers		4,525,794		94,648
Prepayment to acquire a subsidiary		1,492,772		–
Due from a related party		–		1,439,080
Inventories		201,091		196,326
Prepaid expenses and other current assets		175,956		223,387
TOTAL CURRENT ASSETS	$	43,550,730	$	12,325,454
NON-CURRENT ASSETS
Plant and equipment		35,384		49,148
Right-of-use asset		47,617		136,695
Contract assets		–		262,617
TOTAL NON-CURRENT ASSETS	$	83,001	$	448,460

TOTAL ASSETS	$	43,633,731	$	12,773,914

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Account payables	$	169,137	$	125,223
Contract liabilities		291,833		154,927
Taxes payable		740,966		633,651
Due to related parties		23,557		–
Lease liability		47,617		90,253
Accrued expenses and other liabilities		402,233		105,829
TOTAL CURRENT LIABILITIES	$	1,675,343	$	1,109,883
NON-CURRENT LIABILITIES
Lease liability		–		23,102
TOTAL LIABILITIES	$	1,675,343	$	1,132,985

COMMITMENTS AND CONTINGENCIES		–		–

SHAREHOLDERS’ EQUITY
Ordinary shares, $0.001 par value, 50,000,000 shares authorized, 13,848,333 and 6,333,333 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively	$	13,848	$	6,333
Additional paid-in capital		40,686,311		9,358,487
Statutory reserve		719,804		551,146
Retained earnings		147,278		1,565,817
Accumulated other comprehensive income		391,147		159,146
Total shareholders’ equity	$	41,958,388	$	11,640,929

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	43,633,731	$	12,773,914

CHINA LIBERAL EDUCATION HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)


	For the years ended December 31
	2021		2020		2019

REVENUE	$	3,909,546	$	5,023,099	$	5,255,810
COST OF REVENUE		(1,149,148)		(2,157,033)		(3,360,694)
GROSS PROFIT		2,760,398		2,866,066		1,895,116

OPERATING EXPENSES
Selling expenses		(152,759)		(229,656)		(593,215)
General and administrative expenses		(3,778,329)		(1,199,690)		(783,241)
Total operating expenses		(3,931,088)		(1,429,346)		(1,376,456)

(LOSS) INCOME FROM OPERATIONS		(1,170,690)		1,436,720		518,660

OTHER INCOME
Interest income		94,195		101,257		6,120
Other income (expenses), net		126,648		(26,035)		69,162
Total other income, net		220,843		75,222		75,282

(LOSS) INCOME BEFORE INCOME TAXES		(949,847)		1,511,942		593,942
INCOME TAX EXPENSE		(300,034)		(303,246)		(156,038)

NET (LOSS) INCOME	$	(1,249,881)	$	1,208,696	$	437,904

COMPREHENSIVE (LOSS) INCOME
Total currency translation differences arising from consolidation		232,001		471,554		(78,171)
TOTAL COMPREHENSIVE INCOME (LOSS)	$	(1,017,880)	$	1,680,250	$	359,733

(LOSS) EARNINGS PER SHARE
Basic and diluted	$	(0.12)	$	0.21	$	0.09

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic and diluted		10,368,563		5,852,459		5,000,000

CHINA LIBERAL EDUCATION HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the years ended December 31,
	2021		2020		2019

Cash flows from operating activities
Net (loss) income	$	(1,249,881)	$	1,208,696	$	437,904
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization		18,652		15,891		40,038
Non-cash lease expenses		91,386		41,524		2,533
Loss on disposal of property and equipment		607		37,468		–
Share-based compensation		2,288,251		–		–
Changes in operating assets and liabilities:
Account receivables		(1,504,828)		(343,165)		306,781
Contract assets		2,781,603		(719,615)		(176,968)
Advance to suppliers		(4,355,926)		756,846		(824,141)
Deferred initial public offering costs		–		–		(650,092)
Due from a related party		–		–		72,371
Inventories		199		(185,985)		–
Prepaid expenses and other current assets		33,653		128,658		(57,406)
Account payables		40,239		66,961		(69,500)
Contract liabilities		462,253		(421,834)		417,987
Taxes payable		90,150		191,373		164,879
Lease liability		(67,754)		(60,907)		(5,252)
Accrued expenses and other liabilities		(40,842)		(80,097)		2,434
Net cash (used in) provided by operating activities		(1,412,238)		635,814		(338,432)

Cash flows from investing activities
Purchase of plant and equipment		(4,439)		(21,230)		(17,738)
Acquisition of 8.8228{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} non-controlling interest in China Liberal Beijing		–		–		(453,669)
Advance to a related party		–		(1,374,895)		–
Prepayment to acquire a subsidiary		(1,474,217)		–		–
Repayment of advance to a related party		1,471,113		–		–
Net cash used in investing activities		(7,543)		(1,396,125)		(471,407)

Cash flows from financing activities
Proceeds from related party borrowings		9,415		–		439,193
Repayment of due to a related party		–		(1,439,799)		–
Net proceeds from issuance of ordinary shares		29,047,088		5,405,451		–
Net cash provided by financing activities		29,056,503		3,965,652		439,193

Effect of changes of foreign exchange rates on cash		34,250		99,829		(4,241)
Net increase (decrease) in cash		27,670,972		3,305,170		(374,887)
Cash, beginning of year		5,007,449		1,702,279		2,077,166
Cash, end of year	$	32,678,421	$	5,007,449	$	1,702,279

Supplemental disclosure of cash flow information:
Cash paid for interest expense	$	40,555	$	2,697		–
Cash paid for income tax		–	$	20,775	$	18,657
Supplemental disclosure of non-cash investing and financing activities
Transfer of non-controlling interest		–		–	$	87,238
Right-of-use assets obtained in exchange for operating lease obligations		–	$	180,528	$	21,062

SOURCE China Liberal Education Holdings Limited

February 22, 2022

TAL Education Group Announces Unaudited Financial Results for the Third Fiscal Quarter Ended November 30, 2021

BEIJING, Feb. 21, 2022 /PRNewswire/ — TAL Education Group (NYSE: TAL) (“TAL” or the “Company”), a smart learning solutions provider in China, today announced its unaudited financial results for the third quarter of fiscal year 2022 ended November 30, 2021.

Highlights for the Third Quarter of Fiscal Year 2022

Net revenues decreased by 8.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} year-over-year to US$1,020.9 million from US$1,119.1 million in the same period of the prior year.
Loss from operations was US$108.4 million, compared to loss from operations of US$127.4 million in the same period of the prior year.
Non-GAAP loss from operations, which excluded share-based compensation expenses, was US$67.6 million, compared to non-GAAP loss from operations of US$73.4 million in the same period of the prior year.
Net loss attributable to TAL was US$99.4 million, compared to net loss attributable to TAL of US$43.6 million in the same period of the prior year.
Non-GAAP net loss attributable to TAL, which excluded share-based compensation expenses, was US$58.6 million, compared to non-GAAP net income attributable to TAL of US$10.4 million in the same period of the prior year.
Basic and diluted net loss per American Depositary Share (“ADS”) were both US$0.15. Non-GAAP basic and diluted net loss per ADS, which excluded share-based compensation expenses, were both US$0.09. Three ADSs represent one Class A common share.
Cash, cash equivalents and short-term investments totaled US$2,837.2 million as of November 30, 2021, compared to US$5,937.5 million as of February 28, 2021.

Highlights for the Nine Months Ended November 30, 2021

Net revenues increased by 22.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} year-over-year to US$3,849.8 million from US$3,133.1 million in the same period of the prior year.
Loss from operations was US$615.2 million, compared to loss from operations of US$141.0 million in the same period of the prior year.
Non-GAAP loss from operations, which excluded share-based compensation expenses, was US$440.5 million, compared to non-GAAP loss from operations of US$16.4 million in the same period of the prior year.
Net loss attributable to TAL was US$1,028.0 million, compared to net income attributable to TAL of US$53.0 million in the same period of the prior year.
Non-GAAP net loss attributable to TAL, which excluded share-based compensation expenses, was US$853.3 million, compared to non-GAAP net income attributable to TAL of US$177.6 million in the same period of the prior year.
Basic and diluted net loss per ADS were both US$1.60. Non-GAAP basic and diluted net loss per ADS, excluding share-based compensation expenses, were both US$1.33.

Financial Data——Third Quarter and First Nine Months of Fiscal Year 2022

(In US$ thousands, except per ADS data and percentages)

	Three Months Ended
	November 30,
	2020	2021	Pct. Change
Net revenues	1,119,135	1,020,932	(8.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})
Loss from operations	(127,389)	(108,429)	(14.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})
Non-GAAP loss from operations	(73,354)	(67,611)	(7.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})
Net loss attributable to TAL	(43,608)	(99,368)	127.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Non-GAAP net income/(loss) attributable to TAL	10,427	(58,550)	(661.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})
Net loss per ADS attributable to TAL – basic	(0.07)	(0.15)	114.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Net loss per ADS attributable to TAL – diluted	(0.07)	(0.15)	114.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Non-GAAP net income/(loss) per ADS attributable to TAL – basic	0.02	(0.09)	(628.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})
Non-GAAP net income/(loss) per ADS attributable to TAL – diluted	0.02	(0.09)	(647.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})

	Nine Months Ended
	November 30,
	2020	2021	Pct. Change
Net revenues	3,133,066	3,849,755	22.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Loss from operations	(141,014)	(615,160)	336.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Non-GAAP loss from operations	(16,407)	(440,463)	2,584.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Net income/(loss) attributable to TAL	53,012	(1,027,992)	(2,039.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})
Non-GAAP net income/(loss) attributable to TAL	177,619	(853,295)	(580.4{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})
Net income/(loss) per ADS attributable to TAL – basic	0.09	(1.60)	(1,914.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})
Net income/(loss) per ADS attributable to TAL – diluted	0.08	(1.60)	(1,985.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})
Non-GAAP net income/(loss) per ADS attributable to TAL – basic	0.29	(1.33)	(549.4{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})
Non-GAAP net income/(loss) per ADS attributable to TAL – diluted	0.28	(1.33)	(567.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})

Financial Results for the Third Quarter of Fiscal Year 2022

Net Revenues

In the third quarter of fiscal year 2022, TAL reported net revenues of US$1,020.9 million, representing an 8.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} decrease from US$1,119.1 million in the third quarter of fiscal year 2021.

Operating Costs and Expenses

In the third quarter of fiscal year 2022, operating costs and expenses were US$1,139.3 million, representing a 9.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} decrease from US$1,255.9 million in the third quarter of fiscal year 2021. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$1,098.5 million, representing an 8.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} decrease from US$1,201.8 million in the third quarter of fiscal year 2021.

Cost of revenues increase by 0.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to US$519.5 million from US$516.0 million in the third quarter of fiscal year 2021. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increase by 0.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to US$519.2 million, from US$515.2 million in the third quarter of fiscal year 2021.

Selling and marketing expenses decreased by 35.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to US$273.6 million from US$420.7 million in the third quarter of fiscal year 2021. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, decreased by 36.4{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to US$258.6 million, from US$406.4 million in the third quarter of fiscal year 2021.

General and administrative expenses increased by 5.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to US$300.0 million from US$283.8 million in the third quarter of fiscal year 2021. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses, increased by 12.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to US$274.4 million, from US$244.5 million in the third quarter of fiscal year 2021.

Total share-based compensation expenses allocated to the related operating costs and expenses decreased by 24.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to US$40.8 million in the third quarter of fiscal year 2022 from US$54.0 million in the same period of fiscal year 2021.

Impairment loss on intangible assets and goodwill was $46.2 million for the third quarter of fiscal year 2022, compared to US$35.7 million for the third quarter of fiscal year 2021.

Gross Profit

Gross profit decreased by 16.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to US$501.4 million from US$603.6 million in the third quarter of fiscal year 2021.

Loss from Operations

Loss from operations was US$108.4 million in the third quarter of fiscal year 2022, compared to loss from operations of US$127.4 million in the third quarter of fiscal year 2021. Non-GAAP loss from operations was US$67.6 million, compared to Non-GAAP loss from operations of US$73.4 million in the same period of the prior year.

Other Income

Other income was US$9.5 million for the third quarter of fiscal year 2022, compared to other income of US$45.5 million in the third quarter of fiscal year 2021.

Impairment Loss on Long-term Investments

Impairment loss on long-term investments was nil for the third quarter of fiscal year 2022, compared to US$11.5 million for the third quarter of fiscal year 2021.

Income Tax Benefit/(expense)

Income tax expense was US$25.6 million in the third quarter of fiscal year 2022, compared to US$13.9 million of income tax benefit in the third quarter of fiscal year 2021.

Net Loss/(income) Attributable to TAL Education Group

Net loss attributable to TAL was US$99.4 million in the third quarter of fiscal year 2022, compared to net loss attributable to TAL of US$43.6 million in the third quarter of fiscal year 2021. Non-GAAP net loss attributable to TAL, which excluded share-based compensation expenses, was US$58.6 million, compared to Non-GAAP net income attributable to TAL of US$10.4 million in the third quarter of fiscal year 2021.

Basic and Diluted Net Loss per ADS

Basic and diluted net loss per ADS were both US$0.15 in the third quarter of fiscal year 2022. Non-GAAP basic and diluted net loss per ADS, which excluded share-based compensation expenses, were both US$0.09, in the third quarter of fiscal year 2022.

Cash, Cash Equivalents, and Short-Term Investments

As of November 30, 2021, the Company had US$1,347.9 million of cash and cash equivalents and US$1,489.3 million of short-term investments, compared to US$3,243.0 million of cash and cash equivalents and US$2,694.5 million of short-term investments as of February 28, 2021.

Financial Results for the First Nine Months of Fiscal Year 2022

Net Revenues

For the first nine months of fiscal year 2022, TAL reported net revenues of US$3,849.8 million, representing a 22.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase from US$3,133.1 million in the first nine months of fiscal year 2021.

Operating Costs and Expenses

In the first nine months of fiscal year 2022, operating costs and expenses were US$4,480.0 million, a 36.1{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase from US$3,291.5 million in the first nine months of fiscal year 2021. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$4,305.3 million, a 35.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase from US$3,166.9 million in the first nine months of fiscal year 2021.

Cost of revenues increased by 36.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to US$2,005.3 million from US$1,467.1 million in the first nine months of fiscal year 2021. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increased by 36.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to US$2,004.3 million from US$1,466.0 million in the first nine months of fiscal year 2021.

Selling and marketing expenses decreased by 0.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to US$1,014.7 million from US$1,019.6 million in the first nine months of fiscal year 2021. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, decreased by 3.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to US$951.2 million from US$988.0 million in the first nine months of fiscal year 2021.

General and administrative expenses increased by 28.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to US$987.6 million from US$768.7 million in the first nine months of fiscal year 2021. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses, increased by 29.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to US$877.3 million from US$676.9 million in the first nine months of fiscal year 2021.

Total share-based compensation expenses allocated to the related operating costs and expenses increased by 40.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to US$174.7 million in the first nine months of fiscal year 2022 from US$124.6 million in the same period of fiscal year 2021.

Impairment loss on intangible assets and goodwill was US$472.4 million for the first nine months of fiscal year 2022, compared to US$36.0 million for the same period of fiscal year 2021.

Gross Profit

Gross profit grew by 10.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to US$1,844.5 million from US$1,666.0 million in the first nine months of fiscal year 2021.

Loss from Operations

Loss from operations was US$615.2 million in the first nine months of fiscal year 2022, compared to loss from operations of US$141.0 million in the same period of the prior year. Non-GAAP loss from operations, which excluded share-based compensation expenses, was US$440.5 million for the first nine months of fiscal year 2022, compared to non-GAAP loss from operations, which excluded share-based compensation expenses, was US$16.4 million in the first nine months of fiscal year 2021.

Other Income

Other income was US$17.6 million for the first nine months of fiscal year 2022, compared to other income of US$132.9 million for the first nine months of fiscal year 2021.

Impairment Loss on Long-term Investments

Impairment loss on long-term investments was US$178.1 million for the first nine months of fiscal year 2022, compared to US$18.4 million for the first nine months of fiscal year 2021.

Income Tax Expense

Income tax expense was US$367.1 million in the first nine months of fiscal year 2022, compared to US$10.6 million of income tax expense in the first nine months of fiscal year 2021.

Net Loss/(income) Attributable to TAL Education Group

Net loss attributable to TAL was US$1,028.0 million in the first nine months of fiscal year 2022, compared to net income attributable to TAL of US$53.0 million in the first nine months of fiscal year 2021. Non-GAAP net loss attributable to TAL, which excluded share-based compensation expenses, was US$853.3 million in the first nine months of fiscal year 2022, compared to Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, was US$177.6 million in the first nine months of fiscal year 2021.

Basic and Diluted Net Loss per ADS

Basic and diluted net loss per ADS were both US$1.60, in the first nine months of fiscal year 2022. Non-GAAP basic and Non-GAAP diluted net loss per ADS, which excluded share-based compensation expenses, were both US$1.33, in the first nine months of fiscal year 2022.

Recent Development

On November 12, 2021, the Company issued a press release to announce that in response to the regulatory developments relating to after-school tutoring services, including the Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education, published in July 2021 by the General Office of the CPC Central Committee and the General Office of the State Council (the “Opinion”) and the related implementation rules, regulations and measures promulgated by competent authorities, the Company decided to cease offering academic subjects to students from kindergarten through grade nine (“K9 Academic AST Services”) in the mainland of China by the end of December 2021.

The Company has completed the cessation by the due date and expects that the cessation will have a substantial adverse impact on the Company’s revenues for the fiscal year ending February 28, 2022 and subsequent periods. In the fiscal year ended February 28, 2021, the revenues from offering K9 Academic AST Services accounted for a substantial majority of the Company’s total revenues in the year. Therefore, the Company believes that the financial results for the fiscal periods ended November 30, 2021 would not be indicative for its performance going forward.

By leveraging its leading-edge education technology, high quality content and extensive experience, the Company will continue to operate and develop the portion of its business other than K9 Academic AST Services, and will also explore other opportunities to provide learning solutions in accordance with relevant rules and regulations.

The Company will continue to seek guidance from and cooperate with government authorities in various provinces and municipalities in China in connection with its efforts to comply with the policy directives in the Opinion and any related implementation rules, regulations and measures. The Company will further adjust its business operations as required, and provide updates to its shareholders as appropriate.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, TAL Education Group’s strategic and operational plans contain forward-looking statements. The Company may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company’s ability to continue to provide competitive learning services and products; the Company’s ability to continue to recruit, train and retain talents; the Company’s ability to improve the content of current course offerings and develop new courses; the Company’s ability to maintain and enhance its brand; the Company’s ability to maintain and continue to improve its teaching results; and the Company’s ability to compete effectively against its competitors. Further information regarding these and other risks is included in the Company’s reports filed with, or furnished to the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of this press release, and TAL Education Group undertakes no duty to update such information or any forward-looking statement, except as required under applicable law.

About TAL Education Group

TAL Education Group is a smart learning solutions provider in China. The acronym “TAL” stands for “Tomorrow Advancing Life”, which reflects our vision to promote top learning opportunities for students through both high-quality teaching and content, as well as leading edge application of technology in the education experience. TAL Education Group offers comprehensive learning services to students from pre-school to the twelfth grade primarily through three flexible class formats: small classes, personalized premium services, and online courses. Our learning services mainly cover enrichment learnings programs and some academic subjects in and out of China. Our ADSs trade on the New York Stock Exchange under the symbol “TAL”.

About Non-GAAP Financial Measures

In evaluating its business, TAL considers and uses the following measures defined as non-GAAP financial measures by the SEC as supplemental metrics to review and assess its operating performance: non-GAAP operating costs and expenses, non-GAAP cost of revenues, non-GAAP selling and marketing expenses, non-GAAP general and administrative expenses, non-GAAP income from operations, non-GAAP net income attributable to TAL, non-GAAP basic and non-GAAP diluted net income per ADS. To present each of these non-GAAP measures, the Company excludes share-based compensation expenses. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of non-GAAP measures to the most comparable GAAP measures” set forth at the end of this release.

TAL believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding share-based expenses that may not be indicative of its operating performance from a cash perspective. TAL believes that both management and investors benefit from these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to TAL’s historical performance and liquidity. TAL computes its non-GAAP financial measures using the same consistent method from quarter to quarter and from period to period. TAL believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using non-GAAP measures is that these non-GAAP measures exclude share-based compensation charges that have been and will continue to be for the foreseeable future a significant recurring expense in the Company’s business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.

TAL EDUCATION GROUP
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars)

	As of February 28, 2021	As of November 30, 2021
ASSETS

Current assets
Cash and cash equivalents	$ 3,242,953	$ 1,347,934
Restricted cash-current	1,758,937	1,110,112
Short-term investments	2,694,555	1,489,245
Inventory	38,675	22,239
Amounts due from related parties-current	2,964	2,093
Income tax receivables	15,641	20,926
Prepaid expenses and other current assets	403,110	178,349
Total current assets	8,156,835	4,170,898
Restricted cash-non-current	16,094	377,898
Property and equipment, net	511,415	358,914
Deferred tax assets	317,189	8,524
Rental deposits	102,555	94,234
Intangible assets, net	66,041	16,776
Land use right, net	216,702	216,942
Goodwill	454,413	18,836
Amounts due from related parties- non-current	–	63
Long-term investments	667,636	557,974
Long-term prepayments and other non-current assets	57,694	19,943
Operating lease right-of-use assets	1,545,735	828,980
Total assets	$ 12,112,309	$ 6,669,982

LIABILITIES AND EQUITY

Current liabilities
Accounts payable	$ 353,778	$ 150,867
Deferred revenue-current	1,387,493	538,979
Amounts due to related parties-current	3,488	312
Accrued expenses and other current liabilities	911,283	928,463
Income tax payable	65,138	33,297
Current portion of long-term debt	270,000	–
Operating lease liabilities, current portion	382,671	247,344
Total current liabilities	3,373,851	1,899,262
Deferred revenue-non-current	30,005	20
Deferred tax liabilities	10,333	17,898
Bond payable	2,300,000	–
Operating lease liabilities, non-current portion	1,193,564	634,295
Total liabilities	6,907,753	2,551,475
Mezzanine equity
Redeemable non-controlling interests	1,775	–
Equity
Class A common shares	148	166
Class B common shares	67	49
Additional paid-in capital	4,369,125	4,358,131
Statutory reserve	121,285	111,151
Retained earnings/(accumulated deficit)	624,883	(392,975)
Accumulated other comprehensive income	86,321	68,888
Total TAL Education Group’s equity	5,201,829	4,145,410
Noncontrolling interest	952	(26,903)
Total equity	5,202,781	4,118,507
Total liabilities, mezzanine equity and equity	$ 12,112,309	$ 6,669,982

TAL EDUCATION GROUP
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except share, ADS, per share and per ADS data)

	For the Three Months Ended November 30,		For the Nine Months Ended November 30,
	2020	2021	2020	2021
Net revenues	$ 1,119,135	$ 1,020,932	$ 3,133,066	$ 3,849,755
Cost of revenues (note 1)	515,560	519,483	1,467,112	2,005,252
Gross profit	603,575	501,449	1,665,954	1,844,503
Operating expenses (note 1)
Selling and marketing	420,747	273,629	1,019,598	1,014,666
General and administrative	283,827	299,963	768,719	987,595
Impairment loss on intangible assets and goodwill	35,727	46,247	36,031	472,437
Total operating expenses	740,301	619,839	1,824,348	2,474,698
Government subsidies	9,337	9,961	17,380	15,035
Loss from operations	(127,389)	(108,429)	(141,014)	(615,160)
Interest income	28,879	12,747	79,065	84,644
Interest expense	(2,714)	(1,821)	(9,378)	(7,871)
Other income	45,507	9,520	132,948	17,611
Impairment loss on long-term investments	(11,472)	–	(18,357)	(178,063)
(Loss)/income before provision for income tax and income from equity method investments	(67,189)	(87,983)	43,264	(698,839)
Income tax benefit/(expense)	13,887	(25,562)	(10,556)	(367,120)
Income from equity method investments	411	6,423	6,352	10,471
Net (loss)/income	(52,891)	(107,122)	39,060	(1,055,488)
Add: Net loss attributable to noncontrolling interest	9,283	7,754	13,952	27,496
Total net (loss)/income attributable to TAL Education Group	$ (43,608)	$ (99,368)	$ 53,012	$ (1,027,992)
Net (loss)/income per common share
Basic	$ (0.22)	$ (0.46)	$ 0.26	$ (4.79)
Diluted	(0.22)	(0.46)	0.25	(4.79)
Net (loss)/income per ADS (note 2)
Basic	$ (0.07)	$ (0.15)	$ 0.09	$ (1.60)
Diluted	(0.07)	(0.15)	0.08	(1.60)
Weighted average shares used in calculating net (loss)/income per common share
Basic	202,039,751	214,672,624	200,786,811	214,619,651
Diluted	202,039,751	214,672,624	208,710,216	214,619,651

Note1: Share-based compensation expenses are included in the operating costs and expenses as follows:

	For the Three Months		For the Nine Months
	Ended November 30,		Ended November 30,
	2020	2021	2020	2021
Cost of revenues	$ 404	$ 262	$ 1,158	$ 996
Selling and marketing expenses	14,322	15,008	31,644	63,440
General and administrative expenses	39,309	25,548	91,805	110,261
Total	$ 54,035	$ 40,818	$ 124,607	$ 174,697

Note 2: Three ADSs represent one Class A common Share.

TAL EDUCATION GROUP
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME/(LOSS)
(In thousands of U.S. dollars)

	For the Three Months Ended November 30,		For the Nine Months Ended November 30,
	2020	2021	2020	2021

Net (loss)/income	$ (52,891)	$ (107,122)	$ 39,060	$ (1,055,488)
Other comprehensive income/(loss), net of tax	54,944	6,053	87,834	(17,796)
Comprehensive income/(loss)	2,053	(101,069)	126,894	(1,073,284)
Add: Comprehensive loss attributable to noncontrolling interest	8,581	8,106	12,872	27,855
Comprehensive income/(loss) attributable to TAL Education Group	$ 10,634	$ (92,963)	$ 139,766	$ (1,045,429)

TAL EDUCATION GROUP
Reconciliation of Non-GAAP Measures to the Most Comparable GAAP Measures
(In thousands of U.S. dollars, except share, ADS, per share and per ADS data)

	For the Three Months Ended November 30,		For the Nine Months Ended November 30,
	2020	2021	2020	2021

Cost of revenues	$ 515,560	$ 519,483	$ 1,467,112	$ 2,005,252
Share-based compensation expense in cost of revenues	404	262	1,158	996
Non-GAAP cost of revenues	515,156	519,221	1,465,954	2,004,256

Selling and marketing expenses	420,747	273,629	1,019,598	1,014,666
Share-based compensation expense in selling and marketing expenses	14,322	15,008	31,644	63,440
Non-GAAP selling and marketing expenses	406,425	258,621	987,954	951,226
General and administrative expenses	283,827	299,963	768,719	987,595
Share-based compensation expense in general and administrative expenses	39,309	25,548	91,805	110,261
Non-GAAP general and administrative expenses	244,518	274,415	676,914	877,334

Operating costs and expenses	1,255,861	1,139,322	3,291,460	4,479,950
Share-based compensation expense in operating costs and expenses	54,035	40,818	124,607	174,697
Non-GAAP operating costs and expenses	1,201,826	1,098,504	3,166,853	4,305,253

Loss from operations	(127,389)	(108,429)	(141,014)	(615,160)
Share based compensation expenses	54,035	40,818	124,607	174,697
Non-GAAP loss from operations	(73,354)	(67,611)	(16,407)	(440,463)

Net (loss)/income attributable to TAL Education Group	(43,608)	(99,368)	53,012	(1,027,992)
Share based compensation expenses	54,035	40,818	124,607	174,697
Non-GAAP net income/(loss) attributable to TAL Education Group	$ 10,427	$ (58,550)	$ 177,619	$ (853,295)
Net (loss)/income per ADS
Basic	$ (0.07)	$ (0.15)	$ 0.09	$ (1.60)
Diluted	(0.07)	(0.15)	0.08	(1.60)
Non-GAAP Net income/(loss) per ADS
Basic	$ 0.02	$ (0.09)	$ 0.29	$ (1.33)
Diluted	0.02	(0.09)	0.28	(1.33)
ADSs used in calculating net (loss)/income per ADS
Basic	606,119,253	644,017,872	602,360,433	643,858,953
Diluted	606,119,253	644,017,872	626,130,648	643,858,953
ADSs used in calculating Non-GAAP income/(loss) per ADS
Basic	606,119,253	644,017,872	602,360,433	643,858,953
Diluted	627,950,637	644,017,872	626,130,648	643,858,953

Cision

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SOURCE TAL Education Group