Visionary Education Technology Holdings Group (GV) Risk Analysis

Although we have had profitable quarterly and annual periods, we have also experienced losses in the past and may experience losses in the future. We expect that our operating expenses and business development expenses will increase as we enroll more students, open new campuses and develop new programs. As a result, there can be no assurance we will be able to generate sufficient revenues to maintain profitability.

In fiscal year ended March 31, 2022, we sold all eight lots of vacant land to third parties, and realized approximately $2.2 million revenue from the sales. We do not have any remaining lots available for sale and do not have any plans to sell any of the other real estate that we own. Therefore, we do not expect to generate any other revenue from the sale of real estate in future periods, and our principal sources of revenue will be from our educational business and leases of existing real estate that we own. If we are unable to generate additional income from those sources, our revenue will decline, which could have a material adverse effect on our results of operations.

Although we have been engaged in the real estate business since 2013 and have management with prior experience in providing education services, we have only been providing education services and operating schools through several acquisitions beginning in November 2017 when we purchased a majority interest in Toronto ESchool. Additionally, our limited history of operating our planned main business lines may not serve as an adequate basis for evaluating our prospects and operating results, including net revenue, cash flows, profitability, or prospects. We have encountered, and may continue to encounter in the future, risks, challenges, and uncertainties associated with operating a private education business, such as addressing regulatory compliance and uncertainty, engaging, training, and retaining high-quality teachers and administrators, and expanding our school network. If we do not manage these risks successfully, our operating and financial results may differ materially from our expectations and our business and financial performance may suffer. Some of our schools are in the early stages of development and have only limited operations. A negative change in the development or implementation of our PPP programs or 2+2 programs with public colleges or public universities, could cause delays in the execution of our business plan. Our inability to successfully increase the utilization rate for the schools that are in the ramp-up stage or adverse changes in our development of our PPP programs could have a material adverse effect on our results of operations, financial condition, and prospects. In addition, as some of our schools commenced operations recently, they have not yet reached their full capacity. For newly established schools, we have recruited students only for certain grades, which leads to a relatively lower utilization rate for such schools. With our existing students progressing into the next grades in school and as we fill up new entry classes, we expect the utilization rates of our newly established schools to increase accordingly. We cannot assure you that we will be able to successfully increase the utilization rate for the schools that are in the ramp-up stage, which may materially and adversely affect our business growth and profitability.

We will be in a continuing process of developing, establishing, and maintaining internal controls and procedures that will allow our management to report on, and our independent registered public accounting firm to attest to, our internal controls over financial reporting if and when required to do so under Section 404 of the Sarbanes-Oxley Act of 2002. Although our independent registered public accounting firm is not required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act until the date we are no longer an emerging growth company, our management will be required to report on our internal controls over financial reporting under Section 404. As of March 31, 2023, our management assessed the effectiveness of our internal control over financial reporting. The material deficiencies relate to that the Company does not have in-house accounting personnel with sufficient knowledge of US GAAP and SEC reporting experiences. In addition, the Company does not have adequate controls in place for the overall accounting function and oversight of financial reporting which resulted in audit adjustments. Management concluded that as of March 31, 2023, our internal control over financial reporting was ineffective. In order to address and resolve the foregoing material weaknesses, we have implemented measures designed to improve our internal control over financial reporting to remediate the material weaknesses, including hiring consultants who have requisite training and experience in the preparation of financial statements in compliance with applicable SEC requirements. In addition to hiring an outside consultant, we also plan to take remedial measures including (i) hiring more qualified accounting personnel with relevant U.S. GAAP and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework; (ii) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for our accounting and financial reporting personnel; (iii) setting up an internal audit function as well as engaging an external consulting firm to assist us with assessment of Sarbanes-Oxley compliance requirements and improvement of overall internal control; and (iv) appointing independent directors, establishing an audit committee, and strengthening corporate governance. The implementation of these measures may not fully address the material weaknesses in our internal control over financial reporting, and we cannot conclude that they have been fully remedied. Our failure to correct theses material weaknesses or our failure to discover and address any other material weaknesses could result in inaccuracies in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. As a result, our business, financial condition, results of operations and prospects, as well as the trading price of our Ordinary Shares, may be materially and adversely affected. Moreover, ineffective internal control over financial reporting significantly hinders our ability to prevent fraud. In addition, once we cease to be an "emerging growth company" as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, as a public company, our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.

We plan to pursue a number of different strategies to expand our operations. These strategies include: - acquiring existing education institutions that align with our business plan,   - exploring blockchain and artificial intelligence technology to be applied into our business,   - expanding our relationship with agents who recruit students on our behalf,   - bringing international students to Canada who will pay higher tuition fees, thereby generating more revenues than domestic students,   - enhancing our infrastructure in Canada, and   - opening additional campuses in Canada. We acquired control of MTM and Conbridge on February 28, 2022 and September 1, 2021, respectively. We plan to expand their program offerings and partnerships. The rapid pace at which we have expanded and plan to continue expanding may place substantial demands on our management, faculty, administrators, operational, technological and other resources. In particular, we may face challenges in the following areas: - controlling costs and developing operating efficiencies to manage the financial side of our expansion;   - maintaining the consistency of our teaching quality and our culture to ensure that recognition of our brands does not suffer;   - improving our existing operational, administrative and technological systems and our internal control over financial reporting;   - recruiting, training and retaining additional qualified instructors and management personnel as well as other administrative and sales and marketing personnel, particularly as we expand into new markets;   - continuing to market our brands to recruit new students for existing and future learning centers; and   - obtaining the necessary government approvals to operate in new schools and programs. We cannot assure you that we will be able to effectively and efficiently manage the growth of our operations. Any failure to effectively and efficiently manage our expansion may materially and adversely affect our ability to capitalize on new business opportunities or effectively run our existing operations, which in turn may have a material adverse impact on our business, our internal control over financial reporting, our financial condition and our results of operations.

The due diligence conducted in connection with an acquisition that we make and the indemnification that may be provided in the related acquisition agreement may not be sufficient to protect us from, or compensate us for, losses resulting from such acquisition. Subject to certain exceptions, the seller may only be liable for misrepresentations or breaches of representations and warranties for several months from the closing date of the acquisition. A material loss associated with the acquisition for which there is no adequate remedy under the acquisition agreement that becomes known to us after that time could materially adversely affect our results of operations and financial condition and reduce the anticipated benefits of the acquisition.

The financial results of any businesses that we acquire may be subject to many of the same factors that affect our financial condition and results of operations, including the seasonal nature of the education business, exposure to currency exchange rate fluctuations, the competitive nature of our markets, and regulatory, legislative and judicial developments. The financial results of any businesses acquired could be materially adversely affected as a result of any of these or other related factors, which we may not be able to manage successfully, and which could have a material adverse effect on our results of operations and financial condition on a consolidated basis.

We intend to enter into acquisitions, partnerships, joint ventures and other strategic transactions, directly or through our subsidiaries, as vehicles to expand our education business in Canada and other countries, particularly partnerships and licensing agreements with public colleges and other educational institutions. We continually seek out new business acquisitions, partnership opportunities and joint ventures to expand our operations. Our management is unable to predict whether or when any future strategic transactions will occur, including identifying suitable acquisition targets, partnership opportunities or joint venture partners, or the likelihood of any particular transaction being completed on terms and conditions that are favorable to us. Acquisitions, partnerships, joint ventures or other strategic transactions may present financial, managerial and operational challenges. We may be exposed to successor liability relating to prior actions involving a predecessor company, or contingent liabilities incurred before a strategic transaction. Liabilities associated with an acquisition or a strategic transaction could adversely affect our financial performance. Any failure to integrate new businesses or manage any new alliances successfully could adversely affect our reputation and financial performance.

We plan to partner with one or more colleges in Canada in the form of PPP. In a PPP partnership contract, we will provide to a public college applied arts and technology college programs leading to an Ontario College Credential. If we fail to obtain such partnerships or fail to maintain them, or if any unforeseeable events cause us to terminate our cooperation with our partner public colleges, we may not be able to accomplish our business goals and our prospects will suffer.