GUSHEN: Discussion and analysis by management of the financial position and operating results. (form 10-Q)

As used herein and unless otherwise specified, the terms “Company”, “it (s)”, “our”, “we”, “we” and “GSHN” mean Gushen, Inc., a Nevada company and its consolidated subsidiary, if applicable.



 The following discussion of our financial condition and results of operations
should be read in conjunction with our audited consolidated financial statements
and the notes to those consolidated financial statements appearing elsewhere in
this report.



Certain statements in this report constitute forward-looking statements. These
forward-looking statements include statements, which involve risks and
uncertainties, regarding, among other things, (a) our projected sales,
profitability, and cash flows, (b) our growth strategy, (c) anticipated trends
in our industry, (d) our future financing plans, and (e) our anticipated needs
for, and use of, working capital. They are generally identifiable by use of the
words "may," "will," "should," "anticipate," "estimate," "plan," "potential,"
"project," "continuing," "ongoing," "expects," "management believes," "we
believe," "we intend," or the negative of these words or other variations on
these words or comparable terminology. In light of these risks and
uncertainties, there can be no assurance that the forward-looking statements
contained in this filing will in fact occur. You should not place undue reliance
on these forward-looking statements.



The forward-looking statements speak only as of the date on which they are made,
and, except to the extent required by federal securities laws, we undertake no
obligation to update any forward-looking statements to reflect events or
circumstances after the date on which the statements are made or to reflect the
occurrence of unanticipated events.



Overview



On July 30, 2021, Gushen, Inc., a Nevada corporation ("GSHN" or the "Company"),
Dyckmanst Limited, a company organized under the laws of the British Virgin
Islands ("Dyckmanst Limited"), and all shareholders of Dyckmanst Limited
immediately prior to the closing (collectively, the "Dyckmanst Limited
Shareholders", each, a "Dyckmanst Limited Shareholder") entered into a share
exchange agreement (the "Share Exchange Agreement"), pursuant to which the
Company acquired 100% of the issued and outstanding equity securities of
Dyckmanst Limited in exchange for 381,600,000 shares of common stock, par value
$0.0001 per share (the "Common Stock") of the Company (the "Share Exchange").
Immediately prior to the closing of the Share Exchange, two existing holders of
aggregated 30,000,000 shares of Series A preferred stock of the Company, par
value $0.0001 per share (the "Preferred Stock") delivered 29,000,000 shares of
Preferred Stock to the Company for cancellation ("the "Cancellation of Certain
Preferred Stock"), each Preferred Stock is convertible into 10 shares of Common
Stock. As a result, immediately following the closing of the Share Exchange,
there are 410,618,750 shares of Common Stock issued and outstanding and
1,000,000 shares of Preferred Stock issued and outstanding. Dyckmanst Limited
Shareholders collectively control 90.72% voting power of the Company on as
converted basis, with respect to all of the shares of common stock and preferred
stock, voting as a single class, with each share of common stock entitles to 1
vote and each share of preferred stock entitles to 10 votes. The Share Exchange
Agreement is incorporated by reference from the current reports on Form 8-K
filed with the the Securities and Exchange Commission on August 6, 2021.



Immediately prior to entering into the Share Exchange Agreement with Dyckmanst
Limited and shareholders of Dyckmanst Limited, we were a shell company with no
significant asset or operation, we have never generated any revenue, and during
the period from November 2017 through March 2020, we were dormant. As a result
of the Share Exchange, we operate through our PRC affiliated entity, Beijing
Zhuoxun Century Culture Communication Co., Ltd. ("Zhuoxun Beijing"), located in
Beijing, China. Dyckmanst Limited does not have any substantive operations other
than holding Edeshler Limited, a Hong Kong company, which in return holding
Beijing Fengyuan Zhihui Education Technology Co., Ltd. (Fengyuan Beijing), who
controls Zhuoxun Beijing through certain contractual arrangements.



                                       17




As a holding company with no material operations of our own, we conduct our
operations in China through our contractual arrangements dated February 5, 2021,
which also known as VIE Agreements, with Zhuoxun Beijing, a variable interest
entity, or "VIE", and its subsidiaries. Neither we nor our subsidiaries own any
equity interests in VIE. The VIE Agreements are designed to provide Fengyuan
Beijing, our wholly-owned subsidiary (the "WFOE"), with the power, rights, and
obligations equivalent in all material respects to those it would possess as the
principal equity holder of Zhuoxun Beijing, including absolute control rights
and the rights to the assets, property, and revenue of Zhuoxun Beijing. This VIE
structure is used to replicate foreign investment in Chinese-based companies
where Chinese law prohibits direct foreign investment in the telecommunications
sector. As a result of our direct ownership in Fengyuan Beijing and the VIE
Agreements, we are regarded as the primary beneficiary of our VIE. The VIE
Agreements are incorporated by reference from the current reports on Form 8-K
filed with the the Securities and Exchange Commission on August 6, 2021.Zhuoxun
Beijing provides family education resources to promote all-around education
onsite in local communities organized by their regional collaborative education
agency and offer parents easy access to a wide variety of courses online through
our application.


Zhuoxun Beijing delivers onsite educational services through our nationwide
physical network of regional collaborative education agency. Zhuoxun Beijing
onsite educational services include programs such as individual development,
youth leadership development, and parenting schools, enabling in-person guidance
and interactions in classes. Zhuoxun Beijing has developed long-term business
relationships with around 18 regional education agencies around the country,
whom Zhuoxun Beijing provides systematic training and management for to ensure
to deliver high-quality and uniformed educational service system.



Zhuoxun Beijing provides online education through their mobile application,
ZhuoXun App ("??"), which is geared towards Chinese parents designed to help
them acquire different family education resources. Zhuoxun Beijing's products
provide two sets of curricula: "Good Parenting" ("????") and "Wise Parents"
("????"). "Good Parenting", focused on child development, provides courses
including EQ training, learning habits, learning ability, parents-children
communication, stages of puberty, etc. to promote children's mental and
psychological health. "Wise Parents" introduces general strategies of family
education to parents to help them better understand and support children's
growth and needs, whereby courses such as traditional family values, improvement
of parents' qualifications, psychological analysis are provided. Through Zhuoxun
Beijing's mobile application, Zhuoxun Beijing's users can, based on their own
interest and needs, select courses that suitable for them and obtain valuable
knowledge and skills provided by Zhuoxun Beijing's courses. Zhuoxun Beijing's
users on mobile platform can use iPhone, Android, iPad and other tablets to
review the courses anywhere and anytime. As of the date hereof, Zhuoxun
Beijing's has around 1.52 million registered users  in ZhuoXun App.



Zhuoxun Beijing's online family education mobile platform monetizes through
in-app purchases. Zhuoxun Beijing provides one free trial class of each course
for all the users. The remaining classes are available for purchase. Users are
able to view the first class for free before determining if to purchase the
remaining classes.



Zhuoxun Beijing's product Zhuoxun Anti-Addiction Cellphone ("Zhuoxun Cellphone")
is an intelligent terminal device. Zhuoxun Beijing's cooperate with Dami Zhilian
Information Technology Group Co., Ltd, a technology company that develops and
produces smartphones ("Dami Zhilian"). Zhuoxun Beijing's gives their design
requirements to Dami Zhilian, who customizes and produces Zhuoxun Cellphone for
us. Zhuoxun Beijing doesnot own any intellectual property in connection with
Zhuoxun Cellphones. Zhuoxun Beijing sell Zhuoxun Cellphones through regional
collaborative education agency. Zhuoxun Cellphone has primarily four functions
including anti-addiction, myopia prevention, security, and study assistance, for
the purpose of managing elementary and middle school students. Parents are able
to personalize and monitor children's use of Zhuoxun Cellphone by setting screen
auto-lock, monitoring internet surfing, monitoring mobile application usage,
monitoring physical locations, etc.



                                       18




Critical accounting conventions and estimates


Basis of Presentation


The Company’s financial statements have been prepared in accordance with generally accepted accounting principles in United States (“we GAAP “)


Use of Estimates



The preparation of these consolidated financial statements in conformity with
U.S. GAAP requires management of the Company to make estimates and judgments
that affect the reported amounts of assets, liabilities, revenues, costs and
expenses, and related disclosures. On an on-going basis, the Company evaluates
its estimates based on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions.
Identified below are the accounting policies that reflect the Company's most
significant estimates and judgments, and those that the Company believes are the
most critical to fully understanding and evaluating its consolidated financial
statements.



COVID-19 Outbreak


In March 2020 the World Health Organization declared coronavirus COVID-19 a
global pandemic. The COVID-19 pandemic has negatively impacted the global
economy, workforces, customers, and created significant volatility and
disruption of financial markets. It has also disrupted the normal operations of
many businesses, including ours. This outbreak could decrease spending,
adversely affect demand for our services and harm our business and results of
operations. It is not possible for us to predict the duration or magnitude of
the adverse results of the outbreak and its effects on our business or results
of operations at this time.



Revenue Recognition



The Company recognizes revenues when its customer obtains control of promised
goods or services, in an amount that reflects the consideration which the
Company expects to receive in exchange for those goods or services. The Company
recognizes revenues following the five step model prescribed under ASU No.
2014-09: (i) identify contract(s) with a customer; (ii) identify the performance
obligations in the contract; (iii) determine the transaction price; (iv)
allocate the transaction price to the performance obligations in the contract;
and (v) recognize revenues when (or as) the Company satisfies the performance
obligation.



Revenues are recognized when control of the promised goods or services is
transferred to our customers, which may occur at a point in time or over time
depending on the terms and conditions of the agreement, in an amount that
reflects the consideration we expect to be entitled to in exchange for those
goods or services.


The Company has identified the following performance obligations for each type of contract:



Training Revenue



The Company's onsite training course service primarily includes assigning
instructors, providing onsite classes and presenting training materials to the
course participants who attend the classes. The series of tasks as discussed
above are interrelated and are not separable or distinct as the customers cannot
benefit from the standalone task.



The Company’s online training course service primarily consists of tutorials or videos already posted on the website. Other than providing access, there is no set or multiple separable and distinct tasks.

According to ASC 606-10-25-19, there is an obligation of result for the training service.

Revenue from student projects in China



The Company's Chinese Good Student Project includes assisting in both promoting
the program and organizing activities for the course participants. Those tasks
are not separable and the course participants cannot benefit from the standalone
task as defined under ASC 606-10-25-19.



Thus, there is only one performance obligation with respect to the China Good
Student Project service.



                                       19





Mobile Phone Revenue


The Company's sales contracts of anti-addiction mobile phone device provide that
the Company provides multiple delivery of the product specified in the
contracts. The contacts identify the quantity, product model, product type and
unit price of the product that will be sold to our customers. The contracts
allow the customers to place separate orders within the credit limit as
specified in the contracts. The delivery is based on the quantity of customers'
order. The Company's customers can benefit from the mobile phone devices every
time it delivers to them. Therefore, the delivery of the products is separately
identifiable and distinct.


Thus, there are multiple performance obligations in each of the anti-addiction mobile phone sales contracts.

Practical expedients and exemption

The company has not incurred any costs to secure contracts and does not disclose the value of unfulfilled performance obligations for contracts with an initial expected term of one year or less.

Other service revenue is earned when the service has been rendered.


Income Taxes


We account for income taxes using the liability method. Under this method,
deferred tax assets and liabilities are determined based on the difference
between the financial reporting and tax bases of assets and liabilities using
enacted tax rates that will be in effect in the period in which the differences
are expected to reverse. The Company records a valuation allowance against
deferred tax assets if, based on the weight of available evidence, it is
more-likely-than-not that some portion, or all, of the deferred tax assets will
not be realized. The effect on deferred taxes of a change in tax rates is
recognized in income in the period that includes the enactment date.



We apply ASC 740, Accounting for Income Taxes, to account for uncertainty in
income taxes and the evaluation of a tax position is a two-step process. The
first step is to determine whether it is more likely than not that a tax
position will be sustained upon examination, including the resolution of any
related appeals or litigation based on the technical merits of that position.
The second step is to measure a tax position that meets the more-likely-than-not
threshold to determine the amount of benefit to be recognized in the financial
statements. A tax position is measured at the largest amount of benefit that is
greater than 50 percent likelihood of being realized upon ultimate settlement.
Tax positions that previously failed to meet the more-likely-than-not
recognition threshold should be recognized in the first subsequent period in
which the threshold is met. Previously recognized tax positions that no longer
meet the more-likely-than-not criteria should be de-recognized in the first
subsequent financial reporting period in which the threshold is no longer met.



Foreign currency and foreign currency conversion



The functional currency of the Company is the United States dollar ("US
dollar"). The Company's subsidiary and VIEs with operations in PRC uses the
local currency, the Chinese Yuan ("RMB"), as their functional currencies. An
entity's functional currency is the currency of the primary economic environment
in which it operates, normally that is the currency of the environment in which
the entity primarily generates and expends cash. Management's judgment is
essential to determine the functional currency by assessing various indicators,
such as cash flows, sales price and market, expenses, financing and
inter-company transactions and arrangements.



Foreign currency transactions denominated in currencies other than the
functional currency are translated into the functional currency using the
exchange rates prevailing at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the balance sheet date are
re-measured at the applicable rates of exchange in effect at that date. Gains
and losses resulting from foreign currency re-measurement are included in the
statements of comprehensive loss.



The consolidated financial statements are presented in U.S. dollars. Assets and
liabilities are translated into U.S. dollars at the current exchange rate in
effect at the balance sheet date, and revenues and expenses are translated at
the average of the exchange rates in effect during the reporting period.
Stockholders' equity accounts are translated using the historical exchange rates
at the date the entry to stockholders' equity was recorded, except for the
change in retained earnings during the period, which is translated using the
historical exchange rates used to translate each period's income statement.
Differences resulting from translating functional currencies to the reporting
currency are recorded in accumulated other comprehensive income in the
consolidated balance sheets.



                                       20




Converting amounts from RMB to we dollars was made at the following exchange rates:



Balance sheet items, except for equity accounts
September 30, 2020                                RMB6.8013 to $1
September 30, 2019                                RMB7.1360 to $1

Income statement and cash flows items
For the year ended September 30, 2020             RMB7.0061 to $1
For the year ended September 30, 2019             RMB6.8750 to $1




Cash and Cash Equivalents


Cash and cash equivalents consist of cash on hand and in banks and highly liquid investments, the withdrawal or use of which is not restricted, and which have an original maturity of one year or less at the time. of the purchase.


Accounts Receivable, Net



The carrying value of accounts receivable is reduced by an allowance that
reflects the Company's best estimate of the amounts that will not be collected.
The Company makes estimations of the collectability of accounts receivable. Many
factors are considered in estimating the general allowance, including reviewing
delinquent accounts receivable, performing an aging analysis and a customer
credit analysis, and analyzing historical bad debt records and current economic
trends.


The adoption of the new revenue standards did not change the Company’s historical accounting policies for its accounts receivable.


Long-Lived Assets


Long-term assets mainly consist of tangible and intangible assets.

Tangible fixed assets



Property, plant and equipment are recorded at cost less accumulated depreciation
and accumulated impairment. Depreciation is computed using the straight-line
method over the estimated useful lives of the assets.



                                Estimated useful lives (years)
Office and computer equipment                 5
Lease improvement                             3



Maintenance and repair expenses are recognized as expenses as they are incurred.



The gain or loss on the disposal of property, plant and equipment is the
difference between the net sales proceeds and the lower of the carrying value or
fair value less cost to the relevant assets and is recognized in general and
administrative expenses in the consolidated statements of comprehensive loss.



Intangible Assets



Intangible assets mainly comprise domain names and trademarks. Intangible assets
are recorded at cost less accumulated amortization with no residual value.
Amortization of intangible assets o is computed using the straight-line method
over their estimated useful lives.



The estimated useful lives of the Company's intangible assets are listed below:



           Estimated useful lives (years)
Software                                10



Impairment of long-lived assets



In accordance with ASC 360-10-35, the Company reviews the carrying values of
long-lived assets for impairment whenever events or changes in circumstances
indicate that the carrying value of an asset may not be recoverable. Based on
the existence of one or more indicators of impairment, the Company measures any
impairment of long-lived assets using the projected discounted cash flow method
at the asset group level. The estimation of future cash flows requires
significant management judgment based on the Company's historical results and
anticipated results and is subject to many factors. The discount rate that is
commensurate with the risk inherent in the Company's business model is
determined by its management. An impairment loss would be recorded if the
Company determined that the carrying value of long-lived assets may not be
recoverable. The impairment to be recognized is measured by the amount by which
the carrying values of the assets exceed the fair value of the assets. No
impairment has been recorded by the Company as of September 30, 2020 and 2019.



                                       21





Credit risk


Financial instruments that potentially subject the Company to a significant
concentration of credit risk consist primarily of cash and cash equivalents. As
of September 30, 2020 and 2019, substantially all of the Company's cash and cash
equivalents were held by major financial institutions located in the PRC, which
management believes are of high credit quality.



For the credit risk related to trade accounts receivable, the Company performs
ongoing credit evaluations of its customers and, if necessary, maintains
reserves for potential credit losses. Historically, such losses have been within
management's expectations



Segments



The Company evaluates a reporting unit by first identifying its operating
segments, and then evaluates each operating segment to determine if it includes
one or more components that constitute a business. If there are components
within an operating segment that meets the definition of a business, the Company
evaluates those components to determine if they must be aggregated into one or
more reporting units. If applicable, when determining if it is appropriate to
aggregate different operating segments, the Company determines if the segments
are economically similar and, if so, the operating segments are aggregated. The
Company has only one major reportable segment in the periods presented.



Fair value of financial instruments

U.S. GAAP establishes a three-tier hierarchy to prioritize the inputs used in
the valuation methodologies in measuring the fair value of financial
instruments. This hierarchy also requires an entity to maximize the use of
observable inputs and minimize the use of unobservable inputs when measuring
fair value. The three-tier fair value hierarchy is:



Level 1 – observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – include other data that is directly or indirectly observable in the market

Level 3 – unobservable inputs that are supported by little or no market activity



The carrying value of the Company's financial instruments, including cash and
cash equivalents, accounts and other receivables, other current assets, accounts
and other payables, and other short-term liabilities approximate their fair
value due to their short maturities.



In accordance with ASC 825, for investments in financial instruments with a
variable interest rate indexed to performance of underlying assets, the Company
elected the fair value method at the date of initial recognition and carried
these investments at fair value. Changes in the fair value are reflected in the
accompanying consolidated statements of operations and comprehensive loss as
other income (expense). To estimate fair value, the Company refers to the quoted
rate of return provided by banks at the end of each period using the discounted
cash flow method. The Company classifies the valuation techniques that use these
inputs as Level 2 of fair value measurements.



From September 30, 2020 and 2019, the Company had no investment in financial instruments



Restricted assets



The Company's PRC subsidiary and VIE are restricted in their ability to transfer
a portion of their net assets to the Company. The payment of dividends by
entities organized in China is subject to limitations, procedures and
formalities. Regulations in the PRC currently permit payment of dividends only
out of accumulated profits as determined in accordance with accounting standards
and regulations in China. The Company's PRC subsidiary and its VIE are also
required to set aside at least 10% of its after-tax profit based on PRC
accounting standards each year to its statutory reserves account until the
accumulative amount of such reserves reaches 50% of its respective registered
capital. The aforementioned reserves can only be used for specific purposes and
are not distributable as cash dividends.



In addition, the Company's operations are conducted and revenues are generated
in China, and all of the Company's revenues earned and currency received are
denominated in RMB. RMB is subject to the foreign exchange control regulation in
China, and, as a result, the Company may be unable to distribute any dividends
outside of China due to PRC foreign exchange control regulations that restrict
the Company's ability to convert RMB into U.S. dollars.



                                       22




Recent accounting positions

Recently adopted accounting standards

Adoption of subject ASC 606, “Revenue from contracts with customers”



In May 2014, the Financial Accounting Standards Board (FASB) issued Topic 606,
which supersedes the revenue recognition requirements in Topic 605. The Company
adopted Topic 606 as of the inception date.



Adoption of ASC Topic 842, “Leases”

In February 2016, the FASB published ASU 2016-12, Leases (ASC Topic 842), which amends the requirements for leases in ASC Topic 840, Leases.



The Company adopted ASC Topic 842 using the modified retrospective transition
method effective the inception date. There was no cumulative effect of initially
applying ASC Topic 842 that required an adjustment to the opening retained
earnings on the adoption date. See Note 2 "Leases" above for further details.



Accounting position papers published but not yet adopted



Financial Instruments. In June 2016, the FASB issued Accounting Standards Update
No. 2016-13, "Financial Instruments - Credit Losses (Topic 326)" ("ASU
2016-13"). ASU 2016-13 revises the methodology for measuring credit losses on
financial instruments and the timing of when such losses are recorded.
Originally, ASU 2016-13 was effective for fiscal years, and for interim periods
within those fiscal years, beginning after December 15, 2019, with early
adoption permitted. In November 2019, FASB issued ASU 2019-10, "Financial
Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815),
and Leases (Topic 842)." This ASU defers the effective date of ASU 2016-13 for
public companies that are considered smaller reporting companies as defined by
the SEC to fiscal years beginning after December 15, 2022, including interim
periods within those fiscal years. The Company is planning to adopt this
standard in the first quarter of fiscal 2023.The Company is currently evaluating
the potential effects of adopting the provisions of ASU No. 2016-13 on its
consolidated financial statements.



Income Taxes. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic
740): Simplifying the Accounting for Income Taxes, which modifies and eliminates
certain exceptions to the general principles of ASC 740, Income Taxes. This
standard will be effective for King Eagle beginning September 30, 2021. We are
currently evaluating the impact of the standard on our consolidated financial
statements.



Financial Operations Overview


Comparison of the three completed months June 30, 2021 and 2020

The following table presents the key elements of our operating results during the three months ended. June 30, 2021 and 2020, both in dollars and as a percentage of our revenue.



                                                           Three Months Ended June 30,
                                                      2021                             2020
                                                                 %                              %
                                              Amount        of Revenue        Amount        of Revenue
Revenue                                    $     33,369          100.00     $  833,767           100.00
Cost of revenue                                 (13,122 )        (39.32 )     (189,563 )         (22.74 )
Gross profit                                     20,247           60.68        644,204            77.26
Selling expenses                             (1,746,126 )     (5,232.78 )     (827,554 )         (99.25 )
General and administrative expenses            (363,517 )       (110.51 )  
  (240,342 )        (110.51 )
Loss from operations                         (2,089,396 )       (513.39 )     (423,692 )        (513.39 )
Other income                                      5,748           17.23         12,933             1.55
Net loss before income taxes                 (2,083,648 )     (6,244.26 )     (410,759 )         (49.27 )
Income tax benefit                              408,431        1,223.98              0                -
Net loss                                   $ (1,675,217 )     (5,020.28 )   $ (410,759 )         (49.27 )




                                       23





Revenue.



The Company's revenue was decreased $800,398 from $33,369 to $833,767 during the
three months ended June 30, 2021 compared with the same period 2020. Due to the
Corona virus 19, the Company stop the offline training during the months ended
March 31, 2021.



Cost of revenue.


Our cost price was $ 13,122 and $ 189,563 for the three months ended June 30, 2021 and 2020, respectively. The drop is in line with the drop in turnover.

Gross margin and gross margin.



Our gross profit was $20,247 for the three months ended June 30, 2021, compared
with a gross profit of $644,204 for the same period last year. Gross profit as a
percentage of revenue (gross margin) was 39.32% for the three months ended June
30, 2021, compared to a gross profit of 22.74% for the same period last year.



Selling expenses.


Our selling expenses consist primarily of compensation and benefits to our
expense related to the revenue, such as advertising fee, marketing fees. Our
selling expenses increased by $918,572 to $1,746,126 for the three months ended
June 30, 2021, compared to $827.554 for the same period in 2020. We adjust the
strategy by reducing our own selling employees and raising more marketing fee to
local agents for attracting more customers.



                                                Three Months ended June 30,
                                2021                         2020                  Fluctuation
                          Amount           %         Amount          %         Amount          %
Salary and welfare          267,956       15.35       269,586       32.58        (1,630 )      (0.60 )
Advertising Fees             58,033        3.32           (75 )     (0.01 )      58,108       679.35
Conference Fees              40,868        2.34         6,599         0.8        34,269       519.31
Marketing fee               560,282       32.09       229,100       27.68       331,182        85.67
Service fee                 761,628       43.62       179,322       21.67       582,306       324.73
Others                       57,359        3.28       143,022       17.28       (85,663 )     (59.89 )
Total Selling Expense   $ 1,746,126         100     $ 827,554         100  
  $ 918,572        25.98



General and administrative expenses.



Our general and administrative expenses consist primarily of compensation and
benefits to our general management, finance and administrative staff,
professional fees and other expenses incurred in connection with general
operations. Our general and administrative expenses increased by $123,176 to
$363,517 for the three months ended June 30, 2021, compared to $240,341 for the
same period in 2020. We hired more staff for organization managements and reduce
the professional service by third parties.



                                                  Three Months ended June 30,
                                2021                          2020                    Fluctuation
                         Amount           %          Amount           %           Amount           %
Salary and welfare        228,578         62.87       129,052         53.70         99,526         77.12
Depreciation and
amortization               27,735          7.63        14,104          5.87         13,631         96.65
Rent                       22,097          6.08        50,582         21.05        (28,485 )      (56.31 )
Profession fee             60,329         16.60       (81,524 )      (33.92 )      141,853       (174.00 )
Others                     24,778          6.82       128,127         53.30       (103,349 )      (80.66 )
Total G&A Expenses      $ 363,517           100     $ 240,341           100     $  123,176         51.25




                                       24





Income tax benefit.


Our tax advantage has been $ 408,431 for the three months ended June 30, 2021, compared to zero for the same period last year.


Net loss.



As a result of the cumulative effect of the factors described above, our net
loss was $1,675,217 and $410,759 for the three months ended June 30, 2021 and
2020, respectively.


Comparison of the completed nine months June 30, 2021 and 2020



The following table sets forth key components of our results of operations
during the nine months ended June 30, 2021 and 2020, both in dollars and as a
percentage of our revenue.



                                                             Nine Months Ended June 30,
                                                      2021                               2020
                                                                 %                                 %
                                              Amount         of Revenue         Amount         of Revenue
Revenue                                    $  1,314,172           100.00     $  6,169,179           100.00
Cost of revenue                                (856,255 )         (65.16 )     (2,858,623 )         (46.34 )
Gross profit                                    457,917            34.84        3,310,556            53.66
Selling expenses                             (5,752,580 )        (437.73 )     (4,566,424 )         (74.02 )
General and administrative expenses          (1,452,230 )        (110.51 ) 
   (1,358,998 )         (22.03 )
Loss from operations                         (6,746,893 )        (513.39 )     (2,614,866 )         (42.39 )
Other income                                     25,955             1.98           25,671             0.42
Net loss before income taxes                 (6,720,938 )        (511.42 ) 
   (2,589,195 )         (41.97 )
Income tax benefit                              483,283            36.77                -                -
Net loss                                   $ (6,237,655 )        (474.65 )   $ (2,589,195 )         (41.97 )




Revenue.



The Company's revenue was decreased $4,855,007 from $6,169,179 to $1,314,172
during the nine months ended June 30, 2021 compared with the same period 2020.
Due to the Corona virus 19, the Company stop the offline training during the
months ended March 31, 2021.



Cost of revenue.



Our cost of revenue was $856,255 and $2,858,623 for the nine months ended June
30, 2021 and 2020, respectively. The decrease was in line with the decrease
of
revenue.


Gross profit and gross margin.



Our gross profit was $457,917 for the nine months ended June 30, 2021, compared
with a gross profit of $3,310,556 for the same period last year. Gross profit as
a percentage of revenue (gross margin) was 34.84% for the nine months ended June
30, 2021, compared to a gross profit of 53.66% for the same period last year.



                                       25





Selling expenses.


Our selling expenses consist primarily of compensation and benefits to our
expense related to the revenue, such as advertising fee, marketing fees. Our
selling expenses increased by $1,186,156 to $5,752,580 for the nine months ended
June 30, 2021, compared to $4,566,424 for the same period in 2020. We adjust the
strategy by reducing our own selling employees and raising more marketing fee to
local agents for attracting more customers.



                                                     Nine Months ended June 30,
                                 2021                            2020                      Fluctuation
                          Amount            %           Amount            %           Amount            %
Salary and welfare        1,082,666         18.82       1,334,852         29.23        (252,186 )      (18.89 )
Advertising Fees            166,157          2.89          21,320          0.47         144,837        679.35
Conference Fees              93,188          1.62         137,962          3.02         (44,774 )      (32.45 )
Marketing fee             1,419,594         24.68         764,561         16.74         655,033         85.67
Service fee               2,625,111         45.63       1,742,936         38.17         882,175         50.61
Others                      365,864          6.36         564,793         12.37        (198,929 )      (35.22 )
Total Selling Expense   $ 5,752,580           100     $ 4,566,424          
100     $ 1,186,156         25.98



General and administrative expenses.



Our general and administrative expenses consist primarily of compensation and
benefits to our general management, finance and administrative staff,
professional fees and other expenses incurred in connection with general
operations. Our general and administrative expenses increased by $93,232 to
$1,452,230 for the nine months ended June 30, 2021, compared to $1,358,998 for
the same period in 2020. We hired more staff for organization managements and
reduce the professional service by third parties.



                                                     Nine Months ended June 30,
                                 2021                            2020                     Fluctuation
                          Amount            %           Amount            %           Amount           %
Salary and welfare          729,380         50.23         347,888         25.60        381,492        109.66
Depreciation and
amortization                 82,729          5.70          42,120          3.10         40,609         96.41
Rent                         83,418          5.74         112,946          8.31        (29,528 )      (26.14 )
Profession fee              320,122         22.04         578,191         42.54       (258,069 )      (44.63 )
Others                      236,581         16.29         277,853         

20.45 (41,272) 14.85 Total general and administrative expenses $ 1,452,230 100.00 $ 1,358,998 100.00 $ 93,232 6.86



Income tax benefit.


Our tax advantage has been $ 483,283 for the nine months ended June 30, 2021, compared to zero for the same period last year.


Net loss.



As a result of the cumulative effect of the factors described above, our net
loss was $6,237,655 and $2,589,195 for the nine months ended June 30, 2021
and
2020, respectively.



                                       26




Liquidity and capital resources



The following table sets forth a summary of our cash flows for the periods
indicated:



                                                                     Nine Months Ended
                                                                         June 30,
                                                                   2021             2020
Net cash used in operating activities                          $ (3,488,115 )   $ (3,863,678 )
Net cash used in investing activities                               (79,289 )        (15,734 )
Net (decrease) increase in cash and cash equivalents             (3,567,404 )     (3,879,412 )
Effect of exchange rate changes on cash and cash equivalents        346,602

116,951

Cash and cash equivalents at the beginning of period              7,134,106

10 338 433

Cash and cash equivalents at the end of period                 $  3,913,303
    $  6,575,972




As of June 30, 2021 we had cash and cash equivalents of $3,913,303. To date, we
have financed our operations primarily through borrowings from our stockholders,
related and unrelated parties.



Operating Activities



Net cash used in operating activities was $3,488,115 for the nine months ended
June 30, 2021, as compared to $3,863,678 net cash used in operating activities
for the nine months ended June 30, 2020. The net cash provided by operating
activities for the nine months ended June 30, 2021 was mainly due to our net
loss of $6,237,655, an increase in other payables of $1,239,466, partially
offset by the decrease in other receivable of $1,923,731. The net cash provided
by operating activities for the nine months ended June 30, 2020 was mainly due
to our net loss of $2,589,194, increase in advances to suppliers of $1,747,281,
partially offset by the decrease in other receivable of $3,447,954.



Investing Activities


Net cash used in investing activities was $79,289 for the nine months ended June
30, 2021, as compared to $15,734 for the nine months ended June 30, 2020. The
net cash used in investing activities for the nine months ended June 30, 2021
and 2020 was mainly attributable to purchase of property, plant and equipment.



Off-balance sheet provisions

From June 30, 2021 and September 30, 2020, we had no off-balance sheet arrangement that has or is reasonably likely to have a current or future effect on our financial condition, changes in financial condition, income or expenses, results of operations, liquidity, capital expenditure or capital resources which is important to investors.

Critical accounting principles

The preparation of consolidated financial statements in accordance with US GAAP
requires the Company's management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results can, and in many cases will, differ from those estimates. We have
not identified any critical accounting policies.



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