VEDU Visionary Education Technology Holdings Group Inc

ITEM 4. INFORMATION ON THE COMPANY

Our Corporate History

Visionary Education Technology Holdings Group Inc. was founded in 2013 by Ms. Zhou, a vocational educator in Canada. We were incorporated by Ms. Zhou on August 20, 2013, as 123 Natural Food Ontario Ltd., a company limited by shares, under the Ontario Business Corporations Act. Our original goal was to develop and operate an international education platform focused on vocational education based on agricultural technology. However, we did not pursue this goal due to marketing barriers caused by the over specialization of the concept and a limited market.

In 2015, Ms. Zhou redirected our business toward an international education program focused on the OSSD. She launched a new company, China Youth Langton (Canada) Education Technology Ltd., or Langton. Langton, as the majority investor, and unaffiliated third-party investors organized Toronto ESchool Inc., or Toronto ESchool, on March 7, 2016, to provide grades 9 through 12 online OSSD courses. On November 15, 2017, we entered into a share purchase agreement to acquire a 55% equity interest in Toronto ESchool from Langton for a nominal purchase price of $0.8. Ms. Zhou sold her interest in Langton in 2018 to an unaffiliated party. On June 19, 2020, we acquired an additional 15% equity interest in Toronto ESchool from one of its third-party investors for $31,808. As a result of this transaction, we own a 70% equity interest of Toronto ESchool. On June 19, 2020, we transferred our 70% equity interest in Toronto ESchool to our wholly owned subsidiary Farvision Education Group Inc.

Concurrently with our organization, Ms. Zhou founded a separate company to acquire and develop educational real estate facilities as a complement to the education company. To better explore the international market and to enhance our competitiveness, Ms. Zhou increased her investment in teaching facilities through 123 Real Estate Development Ontario Ltd., or 123 Real Estate, which she organized on August 20, 2013. From 2013 through 2015 123 Real Estate purchased 22.4 acres of vacant land in Peterborough, Ontario, which was originally planned to be developed into an international student housing center. On November 14, 2015, 123 Real Estate purchased a building at 41 Metropolitan Road, Toronto, for use as a headquarters and teaching facility for international education On April 1, 2019, we acquired all the shares of 123 Real Estate from Ms. Zhou for $3,210,000 to enable us to own the office building and the vacant land and develop the land into a facility for international student services. In April 2021, we purchased office buildings at 200 and 260 Town Centre Blvd. to provide additional revenue from leasing and space for expansion of our educational facilities. On May 28, 2021, 123 Real Estate Development Ontario Ltd. changed its name to Visionary Education Real Estate Group Inc. On October 15, 2021, Visionary Education Real Estate Group Inc changed its name to Visionary Education Services and Management Inc.

On February 25, 2019, Visionary Education Services and Management Inc., then known as 123 Real Estate Development Ontario Ltd., entered into a share purchase agreement to acquire 100% of the equity interests in PrideMax Construction Group Inc., or PrideMax Construction, from its original shareholder for a nominal fee of $0.80. Incorporated on July 20, 2010 in Scarborough, Ontario, PrideMax Construction had no active business since its inception. The transaction was completed on April 1, 2019. On May 23, 2020, 123 Real Estate Development Ontario Ltd. transferred its 100% ownership in PrideMax Construction to NeoCanaan Investment Corporation, which was 100% owned by us, for a nominal fee of $0.80. On June 16, 2021, PrideMax Construction changed its name to Farvision Development Group Inc., or Farvision Development.

Between 2017 and 2019, we conducted a survey of the international market for OSSD. Based on the promising market opportunity for OSSD, we gradually built up a network of agents in Southeast Asia, India and South America to recruit students for our OSSD programs. In the meantime, we also developed online teaching dossiers for more than 60 OSSD courses (core courses and a broad range of elective courses). We established collaboration with educational organizations such as Mississauga District School Board and Trent University. The collaboration includes developing OSSD teaching methods and technologies, school management, and student promotion. We concluded that the initial results of this initiative and operation were promising.

However, we were adversely impacted by the COVID-19 pandemic beginning early in 2020. Our tuition and other revenue dropped precipitously. Without exception, the entire education industry in Canada has suffered from the difficulties caused by the pandemic. To survive while still creating opportunity to grow, we made significant changes to our strategic plan and commenced exploring new businesses. In response to the special economic environment in Canada, we optimized our educational assets so our operation could concentrate in the Toronto metropolitan area. We sold most of our land in Peterborough and channeled the income to the acquisition of quality educational organizations and institutional buildings. We have grown through the acquisition of seven educational organizations and two institutional buildings at what we believe are favorably low prices. These acquisitions and the reorganization of our corporate structure are described below.

On May 14, 2020, Farvision Education Group Inc., or Farvision Education, was incorporated under the Canada Business Corporation Act. Farvision Education is our wholly owned subsidiary of Visionary Education Technology Holdings Group Inc.

On July 27, 2020, Farvision Education entered into an investment agreement with 2549601 Ontario Inc., which owns a private high school license registered with Ontario Ministry of Education, to incorporate Maple Toronto Arts & Performance Academy Inc. with a total investment of $159,046 from Farvision Education and 2549601 Ontario Inc. Pursuant to the agreement, Farvision Education subscribed for 80% of the total 200,000 common shares at $0.80 per share, and 2549601 Ontario Inc. subscribed the remaining 20% of its total common shares at the same price. On August 3, 2020, Farvision Education filed articles of amendment to change the name of Maple Toronto Arts & Performance Academy Inc. from Alathena International Academy Richmond Hill to Maple Toronto Art Academy Inc. or Toronto Art Academy. On July 27, 2020, Toronto Art Academy entered into a license transfer agreement with 2549601 Ontario Inc. (operating as Alathena International Academy Richmond Hill), a private high school registered with Ontario Ministry of Education. Pursuant to the agreement, Toronto Art Academy acquired the private high school license for a consideration of $159,040. The transaction was completed on September 1, 2020.

On May 26, 2020, NeoCanaan Investment Corporation, or NeoCanaan Investment, was incorporated under the Canada Business Corporation Act. NeoCanaan Investment is a wholly owned subsidiary of Visionary Education Technology Holdings Group Inc. NeoCanaan Investment provides and manages investment of real properties to be used for educational purposes and other education services through two wholly-owned subsidiaries, Farvision Development Group Inc. and Canada Animation Industry Group Inc.

On October 8, 2020, Canada Animation Industry Group Inc., or Animation Group, was incorporated under the Canada Business Corporation Act. Animation Group provides investment on facilities for animation education and the animation industry, and an incubator for graduates to set up their own animation companies. Animation Industry Group Inc. is a wholly owned subsidiary of NeoCanaan Investment.

On June 12, 2021, Farvision Education entered into an investment agreement with two individuals who were the original shareholders of 9651837 Canada Inc., operating as “Lowell Academy,” a private high school offering classes for students in grades 9 through 12 and registered with the Ontario Ministry of Education. Pursuant to the agreement, Farvision Education subscribed for 70% of the shares of Lowell Academy for a consideration of $168,063 (C$210,000). The transaction was completed on June 12, 2021.

On March 1, 2021, Farvision Education entered into an investment agreement with two individuals who were the original shareholders of 7621531 Canada Inc., operating as Conbridge Institute of Technology, a private vocational college registered with Ontario Ministry of Colleges and Universities. Pursuant to the agreement, Farvision Education acquired 80% of the equity interest of Conbridge Institute of Technology for a total consideration of $64,024 (C$80,000). The transaction was completed on September 1, 2021.

On April 1, 2021, we entered into a share transfer agreement with Mr. Xiaofeng Wang, a related party, to transfer his 100% of the equity interests in Glorious Future Study Abroad Immigration Group Inc., or Glorious Immigration, and PrideMax International Human Resources Services Inc., or PrideMax HR, for a nominal fee of $0.80. Before this share transfer, both Glorious Immigration and PrideMax HR had no active business since their incorporation. The transaction was completed on June 12, 2021. On July 13, 2021, Glorious Future Study Abroad Immigration Group Inc. changed its name to Visionary Study Abroad and Immigration Services Inc. On June 27, 2021, PrideMax HR changed its name to Farvision Human Resource Service Company Inc. Farvision HR acts as a human resource agent and provides career and internship recommendations for international students.

On June 6, 2021, Farvision Education entered into a share transfer agreement with Mr. Xiaofeng Wang, a related party to transfer his 70% of the equity interests in Princeton Career Education Group Inc., or PCE, for a nominal fee of $0.80. The transaction was completed on June 12, 2021.

On July 26, 2022, we decided to streamline our business lines, and focus on our core education sectors, including the operation of Ontario Secondary School Diploma, Griggs International Academy USA, Max the Mutt College for Animation, Design and Art, and future investment in education technology. We transferred Visionary Study Abroad and Immigration Services Inc., Farvision Human Resource Service Company Inc., and The Princeton Career Education Group Inc. for a sum of $0.80 to their prior owner, Mr. Xiaofeng Wang. Mr. Wang had transferred these companies to us in 2021 and then worked for us until his departure in May 2022. The divestiture of these three subsidiaries does not represent a strategic shift by us and is not expected to have any material effect on the Company’s operations and financial results.

On June 22, 2021, Ms. Zhou exchanged her 100% of our common shares for 100% of the common shares of 3888 Investment Group Limited (“3888”). Subsequently, Ms. Zhou transferred her ownership of the shares of 3888 in exchange for 83.212% of Northern CC Group, (‘Northern”) which owns 70% of 3888.

On December 15, 2021, 3888 transferred a portion of its Common Shares to each of its shareholders, other than Northern, in exchange for their shares of 3888 and transferred a portion of its common shares to certain shareholders of Northern, thereby reducing its ownership of us to 65% of our issued and outstanding Common Shares. 3888 transferred the Common Shares to give the owners of 3888 and Northern their proportionate interest in the asset of 3888, which was our Common Shares, and make them direct owners of us.

On February 28, 2022, we acquired 70% of the issued and outstanding shares of Max the Mutt Animation Inc., which operates Max the Mutt College of Animation, Art and Design, or MTM. MTM was founded in 1997 as a Canadian private career college and is located in Toronto, Ontario.

On June 24, 2022, pursuant to the agreement signed on December 19, 2020 and the amended agreement signed on February 28, 2022, Farvision Education paid the first deferred purchase payment of $80,030 for 10% of the shares of MTM. After this payment and share transfer, Farvision Education owns 80% of the total issued and outstanding shares of MTM.

MTM offers a full-time, four-year college diploma programs in Classical and Computer Animation and Production, Illustration and Storytelling for Sequential Arts, Concept Art for Animation and Video Games. MTM also offers a variety of digital, animation and art workshops and courses outside of the diploma programs as well as an intensive six-week certificate program for students who will be applying to art-based post-secondary programs.

On July 14, 2022, we entered into a Capital Increase and Share Expansion Agreement (the “Contribution Agreement”) with Griggs International Academy China Co. Ltd. (“Griggs China”), a Hong Kong private consulting and investment holding company offering United States K-12 diploma programs and services of Griggs International Academy USA at four locations in China. Pursuant to the Contribution Agreement, the Company has agreed to invest $900,000 in Griggs China in exchange for 9,000 newly issued shares of Griggs China, which will equal 90% of issued and outstanding shares of Griggs China. This transaction closed on July 31, 2022.

On July 19, 2022, we signed a purchase agreement with the two principal shareholders of Griggs China (“Griggs Shareholders”) to purchase their 1,000 shares for a total consideration of $50,000. The two Griggs Shareholders will retain 10% of the dividend rights of the Company’s business through Griggs China in exchange for the sale of their ordinary shares, and we guarantee to pay an annual minimum of $20,000 and $10,000, respectively, to the two Griggs Shareholders as a retainer if no dividend is declared. The payment of the retainer commences September 1, 2022 and remains in effect until August 31, 2032. After completing this transaction, we will own 100% of Griggs China.

We listed our common shares on the Nasdaq Capital Market under the symbol “VEDU” on May 17, 2022 and completed an initial public offering of 4,250,000 Common Shares on May 19, 2022 (the “IPO”), raising approximately $14.33 million in net proceeds after deducting underwriting commissions and the offering expenses payable by us.

The details of Visionary Education Technology Holdings Inc. and our subsidiaries are set out below as of the date of this report:

 ¹ Minority interests in subsidiaries owned by Farvision Education are held by unaffiliated third parties.

Our Corporate Structure

The following diagram illustrates our corporate structure as of the date of this report.

Our Solution

We are an education provider located in Canada that offers our high-quality education resources to students around the globe. We aim to provide access to secondary, college undergraduate and graduate and vocational education to students in Canada through technological innovation so that more people can learn, grow and succeed to their full potential. We use the technology that we have developed to provide customized teaching methods and to cultivate talented students to meet the challenges that they may face in their careers. We believe that we have assembled a distinguished faculty and experienced management team in North America to provide those resources to enable our students to achieve their career goals. We offer educational programs for secondary school, college, university, and advanced degree students together with services to support them, such as housing and career guidance. As a fully integrated provider of educational programs and services in Canada, we have been serving and will continue to serve both Canadian and international students. Our current businesses are organized into three clusters: Degree-oriented education, vocational education and education services, as described below. The three lines of business are inter-beneficial. We operate Education Services to support our students enrolled in both the degree-oriented and the vocational education programs. Such support includes study visa and immigration visa services, student housing, job placement, and funding.

Our degree-oriented educational programs include the OSSD (grades 9 through 12) program, career-oriented two-year college and four-year university programs, and master’s programs. Through three schools, we offer OSSD programs to both Canadian and international students using online, in-person, and hybrid learning methods that combine pre-recorded lectures, live-streamed lectures and tutorials, and live online and in-person consultation. Our three OSSD schools have signed agreements with public post-secondary institutions so that international students graduated from our OSSD schools can have an option to be directly admitted to the degree programs in these institutions without having to pass English proficiency tests such as the Test of English as a Foreign Language, or TOEFL, or the International English Language Testing System, or IELTS. We offer college programs through Conbridge College of Business and Technology, or Conbridge. Its curriculum is developed, regulated and updated to educate students to be career ready. At the bachelor’s degree level, Conbridge has established a partnership with a public university through “2+2” and “1+3” collaborative education modes, which are described below. At the master’s degree level, we have been collaborating with Niagara University Ontario, or NUO, as the exclusive student recruiting agent in Canada, China, India and certain other southeast Asian countries for four master’s programs in education offered by NUO. Additionally, on February 28, 2022, we acquired control of MTM, which has been operating a “4+1” collaborative education with Duncan of Jordanstone College of Art and Design, or Duncan College. Under that agreement, MTM students can be admitted to Duncan College for a one-year master’s program after they have successfully completed the four-year program at MTM.

Foreign students who graduate from our post-secondary programs are eligible to apply for immigration to Canada, which makes our programs attractive to international students. To facilitate international students’ transition into Canada and their successful development, we provide ancillary education services with respect to study and immigration visas, student housing, job placement, and internship and entrepreneurship.

Like many other education organizations, our business has been greatly affected by the COVID-19 pandemic. In order to maintain the quality of our existing education programs and services and to create opportunity to healthily grow during and after the pandemic, we have adapted a strategy for “survive and grow” in response to the adverse impact of COVID-19. During the pandemic, we have followed the governmental guidance to protect our staff and students. We have installed clear signage in all indoor environments and building entrances to remind people to social distance, that masks are mandatory, and that hand sanitizer is available. We have a special task force to address any emergency that may arise if any COVID-19 case is identified within our Company or its facilities. Thus far, no COVID-19 cases have been found among our students or staff. We have reorganized our assets from our pre-pandemic focus on providing student housing to establishing a comprehensive education eco-system. This new strategy emphases the importance of academic partnerships with reputable education organizations and employing technology in education. We own two campuses (the total building floor area of 65,000 square feet and 100,000 square feet, respectively) with one more in the final stage of acquisition (the total building floor area of 433,000 square feet). The education programs, which have been developed or are being developed, are or will be housed in these campuses, one focused on post-secondary programs, one on vocational education, and one on OSSD and animation education (one of our expected college/university programs). We believe that the facilities that we own make us unique and attractive to public colleges and universities seeking opportunities for collaborative education.

Degree-Oriented Education

We offer four levels of degree-oriented education programs, namely OSSD, college, university bachelor’s degree, and master’s degree. Currently, these programs are either offered by our own schools or in partnership with public institutions. The following sections provide the details of these operations.

Ontario Secondary School Diploma

The OSSD is a diploma granted to secondary school graduates in the Canadian province of Ontario. It is part of the publicly funded, province-wide school system. It is awarded to all students who complete the Ontario education curriculum, including students in Special Education, the Talented Offerings for Programs in the Sciences, or TOPS, program, the Mathematics, Science, and Computer Science, or MaCS, program, the International Baccalaureate, or IB, program, and other focused secondary school programs. OSSD education emphasizes critical, independent thinking and problem-solving skills and is recognized as a valid high school diploma by colleges and universities in Canada as well as many other countries. We believe that an OSSD lays the foundation for future learning and growth in the workplace, vocational training, college or university.

Ontario secondary high school normally runs from grade 9 to grade 12. To earn a high school diploma in Ontario, students must earn 18 compulsory credits and 12 optional credits, pass the literacy requirement, and complete a minimum of 40 hours of community involvement activities.

High school students can earn an OSSD through publicly funded schools, private schools, or homeschooling. There are four publicly funded school systems in Ontario, consisting of English Public, English Catholic, French-language Public, and French-language Catholic. All publicly funded schools are managed by district school boards. Private schools do not receive government funding, and usually students must pay, fully or partially, to attend them. These schools may focus on religion, culture, language, or specific approaches to teaching. The Ministry of Education maintains an up-to-date list of private schools in Ontario. As an alternative, students can also receive education via homeschooling.

We operate three OSSD schools through our subsidiaries: Lowell Academy, Toronto Art School, and Toronto ESchool:

Lowell Academy—9651837 Inc., which does business as Lowell Academy, offers high school credit courses and university preparatory courses for grades 9 to 12 in person at its facility in Toronto and online. Lowell Academy has signed agreements with Trent University and Algoma University that allow Lowell Academy graduates who have achieved a grade of more than 80% in Grade 12 English to be directly admitted to the degree programs in these two universities. Lowell Academy was founded in March 2016. We acquired a 70% equity interest in Lowell Academy in June 2021.

Supported by 12 certified teachers, Lowell Academy operates six terms per academic year so that international students have more flexibility in scheduling their studies. In each of the six terms, students concentrate on two courses. We believe that this is helpful for international students to overcome language difficulties. In comparison, all public and most private OSSD schools operate two semesters per academic year.

Based on the need and competence of the individual student, Lowell Academy offers personalized programs to best serve students. To ensure the quality of education, all courses are taught in small classes by Ontario Certified Teachers, or OCT’s. Additionally, students have access to one-to-one consultation from bilingual consultants. The teaching facilities consist of modern teaching equipment, computers, and science labs.

To enrich students’ learning experience and to enhance their connection with Canadian society, Lowell Academy also organizes special learning camps, one in the summer and one in the winter. Through these learning camps, the participating students have a chance to explore the world and extend their study beyond their comfort zone.

Tuition at Lowell Academy and the marketing costs that we pay our agents to recruit students are:

Lowell Academy has established a comprehensive student management system through which the students, parents/guardians, and school can have effective communication. Whenever there is a problem with an individual student, all parties involved can work together for the best solutions. This ensures that all students can properly make progress with their learning plan. For students with learning difficulties, Lowell Academy offers extra time and opportunities so that they can catch up.

We believe that Lowell Academy has built a reputation for high quality education through its students’ success. All graduated students have been admitted to colleges and universities.

Toronto ESchool Ltd., or Toronto ESchool, is an internet-based high school that provides grade 9 to 12 OSSD online courses to domestic students and to international students. It also provides special English and on-site tutorials for OSSD courses. Toronto ESchool has signed an agreement with Trent University in Peterborough, Ontario, Canada, which allows Toronto ESchool graduates to be directly admitted to the degree programs at that university. Toronto ESchool was founded in 2016. We acquired a 55% interest in Toronto ESchool from an affiliate in November 2017 and an additional 15% interest in June 2020.

We believe that Toronto ESchool, situated in Toronto, is a premier online high school that represents a leading education model in Canada. The school is fully inspected and approved to grant the OSSD diploma by the Ministry of Education (BSID# 886520). Toronto ESchool was founded by Demosthenes Aliferis, a renowned educator in Ontario. It is a pioneer and leader in the early stage of online education in Canada. The Toronto ESchool facilities are located in a Company-owned building at the intersection of 401 Expressway and Wharton Avenue in Toronto, one of the ten largest cities in North America and the largest city in Canada. The facilities comprise approximately 1,000 square feet of office space, which is used for administration, student recruiting, partner meetings, and on-site tutorials. Parking spaces for 300 vehicles adjoin the building.

According to the syllabus formulated by the Ontario Department of Education, Toronto ESchool has mapped out a unified curriculum based on its own research and development and has taken a customized education approach to meet students’ needs with the help of a team of OCT teachers. Through international education cooperation, Toronto ESchool has signed more than 20 OSSD authorized partners around the world to promote its global online education model in North America. Going beyond the traditional brick-and-mortar model, Toronto ESchool enables students to register and start learning anywhere at any time with flexible course schedules and self-paced learning processes. Students from around the world can directly register as Canadian high school students without going abroad, enjoy a high school education in North America, and apply to universities globally with an OSSD diploma.

Toronto ESchool has developed its global reach and presence over the years. Since it commenced operation in 2013, Toronto ESchool has granted more than 7,000 course credits and graduated more than 2,500 registered students, including local high school students in Canada, as well as students from more than 30 countries, including the United States, South Korea, Japan, India, Pakistan, Bangladesh, Singapore, the Philippines, Malaysia, Mexico, Ukraine, Russia, Morocco, Panama, Iran, and Bahrain. Through working closely with more than 100 global agents who recruit students, we have successfully helped thousands of students enter universities worldwide, including Canada, the United States, the United Kingdom, Australia, New Zealand, Japan, Singapore, and Hong Kong.

Tuition at Toronto ESchool and the marketing costs that we pay our agents to recruit students are:

Toronto ESchool has also entered into agreements with the eight public universities and colleges in the Province of Ontario listed below under which qualified Toronto ESchool graduates can be directly admitted without taking the TOEFL or IELTS examinations.

Toronto ESchool students who earn an OSSD can apply to colleges or universities in Canada and globally as an Ontario high school graduate. Toronto ESchool has a dedicated professional team to provide hands-on assistance to our students with a view to ensure a high enrollment rate into colleges and universities. A majority of the graduates are admitted by universities in Canada, such as the following:

Maple Toronto Art Academy Inc., or Art Academy, is a private school approved by the Ontario government (BSID#668739). It was founded in 2012 as Alathena International Academy Richmond Hill. We acquired an 80% equity interest in Toronto Art Academy in 2020.

We believe that with experienced OCT’s and advanced teaching facilities, Toronto Art Academy has become known as one of the top new educational institutions in Toronto. It provides grades 9 to 12 OSSD art programs, short-term art training programs, and summer and winter art camps to domestic and international students. As a specialized high school, Toronto Art Academy has established a four-year, art-focused high school curriculum. In addition to Ontario credit courses, it emphasizes a core art education. It offers the following four courses of instruction:

These programs enable its graduates to obtain admission into a variety of art programs in universities in Canada. Toronto Art Academy has signed an agreement with the Canadian Film and Television Institute, under which Toronto Art Academy graduates can be directly admitted to the institute.

By offering the following specialized courses, the Toronto Art Academy features the following advantages that are attractive to students with art talent:

Tuition for Toronto Art School and the marketing costs that we pay our agents to recruit student are:

U.S. Secondary School Diploma

Griggs International Academy China Co. Ltd. (“Griggs China”), registered in Hong Kong in 2017, is a subsidiary of Griggs International Academy (GIA) USA, which was founded by Mr. Frederick Griggs in 1909 and has been providing US K-12 diploma programs worldwide since then. GIA is owned and operated by Andrews University. Griggs China provides the service in the areas of school facilities set-up services, establishing academic committee and regular meeting system, recruitment and training of core academic team members, promotion and enrollment support, teaching plan support and quality control assessment, boarding program instruction and parent/community involvement support and overseas study planning and services.

Griggs China offers K-12 education resources to students in the Asia Pacific region; it provides US GIA high school courses, independent school and cooperative school model, high-end private schools and high-quality online education. Griggs China provides an integrated set of services to empower schools with GIA programs, including jointly designing a US-China Dual Diploma curriculum, setting up schools and/or managing entrusted school management, recruiting foreign Principals and teachers, monitoring and evaluating teaching quality, and assisting students to register at GIA’s headquarters in the US and obtain a US diploma. Currently in China there are three high schools licensed by Griggs China and one high school licensed by Griggs International Academy.

The market and competition

OSSD is a high school diploma recognized by colleges and universities in most countries and territories. The total number of students enrolled in post-secondary institutions in Canada increases each year, especially in the case of international students. According to Statistics Canada and Immigration and Citizenship Canada, Ontario has had the largest number of international students in Canada over the last ten years, which is largely the result of the increase in OSSD international students.

There are 76 public school boards in Ontario, including 38 public secular boards (34 English boards and 4 French boards (ACÉPO)), 38 public separate boards (29 English Catholic boards, eight French Catholic boards and one English Protestant board), and seven public school authorities that operate in children’s treatment centers. There are 1,503 private schools in Ontario in the 2021-2022 school year. The public high schools in the Markham area, where we are located, include Markville High School, Unionville High School, Bur Oak Secondary School, Pierre Elliott Trudeau High School, and Bill Crothers Secondary School. Private high schools in the Markham area include Peoples Christian Academy, J Addison School, Holy Trinity School, TMS School, and La Citadelle International Academy of Arts and Science. These competitors have long history, relatively large campus and excellent teaching facilities.

Our Plan to grow

Based on our existing programs that are with flexible scheduling and supported by advanced teaching facilities and methods, we expect to enhance our OSSD programs as follows:

Regulatory Matters

In Ontario, private schools operate as for-profit businesses or non-profit organizations, and as a result, the scheduling of the academic year, tuition, student recruiting, and school administration are not subject to control by the Ministry of Education. However, the curriculum must comply with the OSSD curriculum prescribed by the Ministry of Education. Private schools do not receive any funding or other financial support from the Ontario Provincial government. The Ministry does not regulate, license, accredit or oversee the day-to-day operation of private schools.

Despite this flexibility, any person, business, or non-profit entity wishing to operate a private school in Ontario must do so in accordance with the legal requirements of the Education Act, as amended by the Education Amendment Act, or more commonly known as Bill 82, and with the policies and procedures detailed in “Private Schools Policy and Procedures Manual” issued by Ministry of Education.

Over the past two school years, the COVID-19 pandemic has had a significant impact on the delivery of education in Ontario. Under a new Ministry of Education policy, starting with the grade 9 cohort for the 2020-21 school year, students will be required to earn two credits online as part of the graduation requirements of the OSSD. Online courses will be a mandatory graduation requirement.

College and University

We operate two colleges, Conbridge College of Business and Technology and Max the Mutt College of Animation, Art & Design, that offer college diploma programs, short-term training courses, vocational training programs, and collaborative education in partnership with public colleges and universities (1+3 and 2+2 programs) for bachelor’s degrees.

Conbridge College of Business and Technology

Conbridge College of Business and Technology, or Conbridge College, is a private vocational institute registered in Ontario under the Private Career College Act of 2005. It offers a wide variety of short-term, specialized programs, professional examination preparation, and professional development training courses and is qualified to confer college degrees. Conbridge College focuses on providing educational resources with a goal of ensuring the success of its graduates by equipping them with the knowledge and skills needed by potential employers. Its faculty members are experienced working professionals who have academic credentials that correlate with their areas of expertise.

The predecessor to Conbridge College was founded in 2005 as Toronto Engineering Training Centre, whose mission was to offer short-term courses and pre-examination sessions to facilitate the integration of new immigrants into the Canadian workforce. Its current training programs cover such areas as civil engineering, mechanical engineering, environmental engineering, and electrical engineering. The courses are designed to meet the immediate needs of newcomers to Canada. Since 2016, Conbridge College has prepared more than 300 students for entry into Canada’s labor force as trained engineers and professional technicians. Its strategic plan is to develop and register more college diploma programs and to seek partnerships with public colleges and universities.

Currently Conbridge College offers two vocational programs that are registered with the Ontario Ministry of Colleges and Universities:

Another three vocational programs have been registered and are pending approval:

Our subsidiary Farvision acquired an 80% equity interest in Conbridge College on September 1, 2021. Under the new ownership, Conbridge College has made the following advancements:

Student Services

In terms of student services, the Binding Policy Directive from the Minister of Education requires that “students enrolled in programs offered through PPP’s are entitled to all the rights and privileges afforded to other students of the college” and that “colleges will be held accountable for ensuring access to an appropriate range of student supports, either on the partnership campus, in the community, or through the college’s main campus.” Conbridge College has submitted a proposal to Holland College on Prince Edward Island for a PPP that would provide that students enrolled in the PPP program would have an appropriate range of services provided to them by Holland College. These services would include, student housing, and career development. As is the case with smaller campuses of public colleges, this range of services may not be as broad as the range of student services offered on the main campus, but will cover the essential services required, and may expand over time as enrollment grows.

Advantages of Conbridge College

Conbridge College had a history of successful operations prior to the COVID-19 pandemic, and we believe that it is now positioned for healthy growth supported by the following advantages:

Conbridge College’s tuition and the marketing costs that we pay our agents to recruit students are set forth below:

Industry competitors

The following private colleges have entered into PPP agreements with public colleges in the Greater Toronto Area:

These are all public colleges that have PPP programs with other private colleges. In comparison with these colleges and their partnerships, we have the following advantages:

Marketing

To promote multi-level, innovative partnerships and develop education on a global scale, Farvision is actively extending its outreach to recruit students from China, India, Vietnam, Southeast Asia, South Korea, Japan, Latin America, and other regions. Our mandate is to create a first-class learning environment and to develop opportunities for international students to allow them to study in Canada and pursue their educational, personal and career goals.

Farvision, through its colleges and schools, has developed partnerships with Canadian universities, public colleges and school boards in Ontario, Nova Scotia, Saskatchewan, and British Columbia. Farvision’s staff visits the key overseas markets and participates in education fairs in China and Hong Kong regularly.

Max the Mutt College of Animation, Art & Design

Max the Mutt College of Animation, Art & Design, or MTM, formerly known as Max the Mutt Animation School, and Studio M, was founded in 1997 as a Private Career College under the Private Career Colleges Act, 1990 with the Ontario Ministry of Advanced Education and Skills Development (Registration number 101408). MTM is located in Toronto, Canada.

Programs

MTM offers three four-year college diploma programs, Animation, Concept Art, and Illustration & Storytelling for Sequential Arts. The curriculum is largely designed, regularly reviewed, and updated by working professionals. Most faculty are working professionals who teach part-time. MTM also regularly offers short-term workshops and training courses.

Over the last 25 years, MTM has produced approximately 4,000 graduates who have entered the animation industry. Many of these graduates have joined animation studios such as Pixar, Walt Disney Animation Studios, and DreamWorks, or created their own studios. MTM currently has about 150 students. We believe that the market demand for graduates of animation programs has been rapidly expanding in recent years.

MTM’s tuition structure

Development

MTM entered into an agreement in 2018 with Duncan of Jordanstone College of Art and Design, or Duncan College, located in Dundee, Scotland, for collaborative education. MTM students can be admitted to Duncan College for a one-year master’s program after they have successfully completed the four-year program at MTM. This is known as a “4+1 program.” MTM is also developing a “2+2 program” with two Canadian public universities (Trent University and Brock University) in disciplines related to animation and art education. Under a 2+2 program, MTM students will be able to directly transfer to a public university for the remaining two years of study for bachelor’s degree after they have completed the first two years of study at MTM.

MTM is also preparing to file an application to convert all of its three college diploma programs to university bachelor’s degree programs with Ontario Ministry of Colleges and Universities. We expect MTM to obtain this approval by the end of 2023. These bachelor’s degree programs are expected to be housed in one of our three campuses, located at 200 and 260 Town Center Blvd., Markham, Ontario. We are the sole owner of these two buildings that have a total floor area of 100,000 square feet.

We believe that MTM programs have developed an exceptional reputation both nationally and internationally, which we believe will enhance MTM’s opportunity to attract highly talented students from all over the globe.

Marketing

We believe that the acquisition of MTM will generate a great opportunity to further develop MTM’s degree programs and relationships with other universities. Farvision has a global network of marketing agents that will connect MTM with potential talented art students. While maintaining MTM’s Canadian market share, Farvision plans to progressively promote MTM’s existing programs to attract international students. Targeted markets include China, India, South American countries, and southeast Asian countries. With expanded academic programs and enhanced teaching facilities, we plan to increase the enrollment to 2,000 students.

Post-Secondary Education Services in Canada

Canada ranks as the fourth most popular destination for international students after the United States, United Kingdom, and China. According to Statistics Canada, in the school year 2018-2019, revenue of universities and degree-granting colleges reached more than $31.8 billion by 2020. (see table below for details). We believe significant potential for growth exists in the post-secondary education service industry in Canada.

Revenues of universities and degree-granting colleges ($ Millions)

	2018	2019	2020
Canada	31,425	33,035	31,939
Ontario	19,944	21,137	21,082

Master’s Degree Programs

We presently offer educational opportunities at the master’s degree level through a collaboration agreement that Farvision signed with Niagara University Ontario, or NUO, on July 14, 2021. Under that agreement, Farvision is the exclusive student recruiting agent for NUO in Canada, India, and certain countries in southeast Asia. MTM also offers opportunities for a master’s degree through an agreement with Duncan of Jordanstone College of Art and Design, Dundee University. These programs are described in further detail below.

Niagara University Ontario

Niagara University Ontario was established on January 18, 2019 as the Toronto campus of Niagara University in Lewiston, New York, which was founded in 1856. NUO’s campus is located in the Expo City commercial and residential complex of the Vaughan Metropolitan Centre, Ontario. The campus covers 12,000 square feet, with classrooms, faculty offices, and student lounge and other facilities.

Currently, NUO offers four master’s degree programs that are registered with Ontario Ministry of Colleges and Universities:

Advantages of Niagara University Ontario Programs

We believe that the master programs offered by NUO have the following advantages:

Major competitors for the other master’s degree programs is summarized below.

Duncan of Jordanstone College of Art and Design, Dundee University

Duncan of Jordanstone College of Art & Design, or Duncan, is the creative heart of the University of Dundee, internationally known for its high-quality teaching and research. It offers a broad range of bachelor’s degree programs in art and design, including animation, art and design, art and philosophy, and graphic design. Its graduate programs include Animation & Visual Effects (VFX) Master of Science (MSc), Art & Humanities Master of Fine Arts (MFA), Art, Science & Visual Thinking MFA, Comics and Graphic Novels Master of Letters/Master of Design (MLitt)/Mdes), Design for Business MSc, Design for Healthcare MSc, Fine Art MFA, Forensic Art & Facial Imaging MSc, Medical Art MSc, and Product Design MSc.

Under the 4+1 agreement signed on September 10, 2018, between MTM and Duncan, MTM graduates will be treated as though they have earned a bachelor’s degree and will be able to apply for admission to the following master’s degree programs:

Vocational Education

Vocational education is a different learning option from the path of college or universities. It offers a career path that imparts the skills and knowledge needed to work in a given occupation. It is coordinated with the requirements of the labor market and is an integral part of the education system.

We believe that good vocational education expands a student’s ability to keep a job and teaches students how to educate themselves as they follow a career path. Vocational education usually provides for a quick education that will provide a marketable skill in a short time span. Often vocational programs are implemented on aspects of skilled trades license training, skilled trades career training, and high demand job training. Even though at the outset vocational education programs are relatively short in duration, lifelong learning is what students should continuously engage over their diverse career paths. Teachers focus on teaching students how to grow with technological trends, because few careers are stable technologically. However, the basics are generally constant in most fields.

The Canadian government has adopted a “block-purchased” training approach to fund large-scale training in response to the needs of certain recovery industries such as construction, manufacturing and hospitality. Examples of such programs include the Canada Ontario Job Grant Program, or COJG, the Second Career Program, and the Canadian Apprenticeship Program.

We offer the following vocational education programs through:

Immigration

According to the 2020 Annual Report to Parliament on Immigration” produced by Immigration, Refugees and Citizenship Canada, or the IRCC (available on https://www.canada.ca/en/immigration-refugees-citizenship/corporate/publications-manuals/annual-report-parliament-immigration-2020.html), 1.23 million people are expected to immigrate to Canada in the next three years. Canadian Immigration Minister Marco Mendicino declared three-year immigration plan for the next three years that will bring more skilled technicians, family members, and refugees.

We believe that 1.23 million new immigrants will result in substantial opportunities for the Canadian vocational training market.

Second Career Program

The Second Career strategy launched by the Ontario Ministry of Training, Colleges and Universities pays for the training or education that Ontarians require to get a better job. It provides financial assistance of up to $22,400, or more in some cases, to pay for tuition, living expenses, help caring for dependents, travel, transportation, disability supports, other living and training costs, and books.

The market size of the Canada Second Career Training Project is estimated to be $26.4 billion for 1.19 million people between 2022 and 2027. This estimate is based on the following official numbers issued by the Canadian government:

Canada-Ontario Job Grant and Apprenticeship Programs

The Canada-Ontario Job Grant, or COJB, provides direct financial support to individual employers or employer consortia that wish to purchase training for their employees. It is available to small, medium, and large businesses with a plan to deliver short-term training to existing and new employees.

Between 2016 and 2022, Canadian governmental jurisdictions have made the following expenditures for training:

Vocational Education Revenue in Canada

Vocational education’s revenue in Canada from 2016 through 2020 is shown below in millions of US$.

Personal Service Worker

To meet the growing need for personal service workers, or PSW, as a result of the growth of the aging population in North America, we have begun to build up our capacity to provide the education for PSWs. We are taking the following steps to enhance our educational resources to address this opportunity:

The duties of a PSW include managing daily tasks for people who are suffering from illness or injury or dealing with the effects of aging. PSWs generally provide services in home management, personal care, family responsibility, social and recurrent activities, and spiritual comfort. In Canada, where the population of people above 65 years has increased significantly and most family members work outside the home, it has become a significant challenge for family members to provide the full-time care that their elderly or ill family member needs. More and more families are now looking for PSWs to provide home-based health care.

The PSW Job Market

According to the Ontario Ministry of Health and Long-term Care, as many as 100,000 professionals work in the PSW field in Ontario. Approximately 34,400 PSW positions are expected to open nationwide before 2026. In addition, Employment Canada notes that many full-time and part-time positions are available for PSWs. Sixty percent of PSWs work full-time, while 40 percent work part-time.

The median wage per hour in Ontario for this profession is $13.20. PSWs who work in city-owned nursing homes, however, can make as much as $17.60 per hour, and those in hospitals can earn approximately $18.40 per hour.

We believe that the outlook for employment in Ontario after completing PSW training is positive, based on several factors, including employment growth and positions opening up as current employees retire. More specifically, opportunities in the PSW field are expected to be driven by the needs of Ontario’s senior population, as well as how much funding is provided for these types of health care services. In fact, approximately 2.68 million people, or 18.1% of Ontario’s population, are seniors aged 65 and over. That percentage is expected to increase to 25 percent by 2041.

PSWs are generally employed by the following organizations:

We believe that training as a PSW affords several advantages to immigrants. From June 18, 2019, the IRCC, officially launched two new five-year caregivers pilot projects for nursing immigrants, the family support care project, and the family early childhood care project. Through these projects, qualified PSW and their family members are eligible to applying for immigration to Canada. Minor children who accompany immigrants under these programs can enroll in free public education in Canada. After obtaining a work visa and working in Canada for two years, participants in the programs can apply for permanent resident status directly.

Advantages of Ontario PSW immigration project

We believe that the Ontario PSW immigrant project provides several advantages to prospective immigrants to Canada:

Employment Prospects for PSW Nursing Students

We believe that the employment prospects for PSW nursing students and other PSWs are very promising.

With the surge in demand for nursing professionals in the international medical market, the phenomenon of “nursing shortage” has become increasingly prominent in various countries. In the next 10 years, the United States, Britain, Canada, New Zealand, Singapore, Japan and other countries in the world will be in urgent need of two million nurses.

The worldwide shortage of nurses has created more opportunities for nurses in various countries to enter the international market. Nursing is listed as a specialty talent by many governments. The shortage in supply coupled with growth in demand has driven up the compensation for nursing professionals. For example, the average annual salary of nurses in North American countries is US$50,000, while North American countries lack more than 300,000 nurses. In Australia, nurses are most likely to find jobs or get promotions. At the same time, if they have the qualification of Australian registered nurses, they are equal to getting a “green card” to work in commonwealth countries. Many European countries, such as Britain, France and Germany, have many preferential policies for nurses. Therefore, we believe that well trained nursing professionals with extensive professional knowledge and fluent international communication skills have broad prospects for employment.

With the transformation of countries to an aging society, we believe that PSWs engaged in geriatrics will be especially popular in the future, and doctors and family nursing practitioners will also become popular careers. With the improvement of people’s living standards, the disease spectrum of people has changed, and the demand for chronic disease care has increased. While people pay attention to physical and mental health, their awareness of disease prevention and self-care has also been strengthened. Accordingly, we believe that community medical care is facing a rare opportunity.

Partnership College Introduction

Since 1967, Cambrian College has been a leading post-secondary institution in northern Ontario. In 2021, Cambrian College had more than 11,000 students, with over 4,100 in 80 full-time programs, and over 7,000 students in almost 900 part-time courses and programs across three campus locations.

Cambrian College offers a one-year postgraduate certificate program, a two-year or three-year diploma program, and one-year certificate program. Students are eligible to apply for a work visa, or a PGWP, after graduation. There are more than 60,000 graduates of the college.

Halifax Language Institute of Canada - Toronto Campus: Language Training

Halifax Language Institute of Canada, or the Halifax Institute, is a private language school approved by the government of Nova Scotia and registered with the Ministry of Immigration, Refugees and Citizenship (File No.: O19091611322) on November 6, 2012. The Halifax Institute is certified by Languages Canada and by the Chinese Embassy in Canada. The Halifax Institute was founded by its president Dr. Wang Hong, who is also an IELTS examiner and longtime professor of English at Mount Saint Vincent University in Halifax, Nova Scotia, Canada.

Farvision signed a cooperation agreement with Halifax Institute on October 10, 2021, under which the two parties will establish a Toronto Branch of Halifax Institute, or the Halifax Institute Toronto. Halifax Institute Toronto is to be housed at our facility in Toronto. The Halifax Toronto Branch is expected to begin offering courses in July 2022. Under the cooperation agreement, Farvision is responsible for operation of the Halifax Institute Toronto and the enrollment of students in all courses offered by the Halifax Institute. Halifax Institute is responsible for school qualification and investment in brand and course development. As a part of its obligations under the cooperation agreement, the Halifax Institute is responsible for the express entry project between the Halifax Institute and Canadian public universities, which provides that as long as students obtain the English for Academic Purposes, or EAP, language qualification of the Halifax Institute, they are eligible to attend cooperative public universities without taking TOEFL / IELTS tests. Students at Halifax Institute Toronto will participate in language learning programs for four to eight months in the school, after which qualified students will be eligible to apply for university admission without taking the IELTS and TOEFL examination.

Halifax Institute Toronto will offer a variety of academic and general English courses and customized English courses for the training of employees in various enterprises. The mission of the Halifax Institute Toronto is to provide students with customized learning courses to improve their self-confidence, fluency and accuracy in English learning, so that students can master personal, academic and professional English skills. It attaches importance to each student’s unique advantages, learning habits and learning methods. Students learn through task-based learning, which aims to enable them to practice language skills in real life. Halifax Institute Toronto will provide the following courses:

Halifax Institute Toronto will also offer the following services to its students:

The Halifax Institute has signed cooperation agreements with the following 19 public universities and community colleges in Canada. Under these agreements, our students can use their EAP credit in lieu of TOEFL or IELTS in the application for admission to these universities and colleges:

Education Services

Study and Immigration Visa Services

Visionary Education Services & Management Inc., a direct wholly owned subsidiary of our Company, provides Canada study visa and immigration visa services. The application for a Canadian study visa is a complicated process, which includes both a study permit and a study visa. The study permit is issued the Canadian Government and allows foreign nationals to study at designated learning institutions, or DLI’s, in Canada. A study permit can be obtained through a face-to-face interview by immigration officers or through a visa issued by a Canadian embassy. After receiving a study permit, all students who wish to study in Canada must apply for a visa, and students can apply for it through the visa center of the Canadian Embassy. Visionary Education Services & Management Inc. assists international students with each step of the study permit and visa application process.

Other Services

In order to better serve international students, we also provide a full range of other services for international students’ dormitory living, including dormitory decoration, water and electricity maintenance, facilities and equipment maintenance, daily necessities, and school supplies through Visionary Education Services and Management Inc.

Our Education Facilities

In 2019, we acquired 123 Real Estate Development Ontario Ltd., an affiliated company under common ownership with Ms. Zhou for $3,210,000. At the time of the acquisition, 123 Real Estate, which changed its name to Visionary Education Real Estate Group Inc. in 2021, owned the Metropolitan Road and Peterborough properties described below. Through the end of our 2021 fiscal year, rental income from and sales of these properties have been our principal source of revenue. In April 2021, we acquired the Town Centre Boulevard properties described below. While all or a portion of each of the buildings that we own are currently leased to unaffiliated third parties, we expect that rental income from such leases will decline as the leases expire and we plan to use the available space for our principal education business. See “Business-Properties”, “Risk Factors.”

We own two buildings in Markham, Ontario, which house our current operations, and one building in Toronto, and are expanding to develop Visionary University Town, which will be established in two additional office buildings on a seven-acre campus that we have agreed to purchase, with a closing scheduled for March 2022. We believe that these facilities are sufficient for our current operations and planned expansion.

Town Centre Boulevard

Our operations are currently conducted at 200 Town Centre Boulevard in Markham, Ontario. The building, which we own, is approximately 52,217 square feet of office space. Toronto Art Academy, Lowell Academy and Conbridge College each lease space at the building. We also lease office space in the building to unaffiliated third parties, whose leases expire between February 2022 and August 2027.

We also own a 39,252 square foot office building at 260 Town Centre Boulevard. All of the space in the building is currently leased to unaffiliated third parties, whose leases expire between June 2022 and October 2024.

Metropolitan Road

We own a 62,140 square foot warehouse at 41 Metropolitan Road in Toronto. Substantially all of the building’s space is currently leased to unaffiliated third parties, whose leases expire between October 2023 and April 2026. While currently used as a warehouse, 41 Metropolitan Road was originally built as a commercial/industrial building and may be used for adult education.

VUT

In order to strengthen the competitiveness of our college and university businesses, to provide a state-of-art learning environment to match with the growing demands for our students, and to develop our partnerships with universities, we are establishing an innovative university town in North York, a suburb of Toronto. VUT will be the campus for our PPP program, with a capacity of approximately 12,000 to 15,000 students.

We executed a purchase agreement on May 19, 2021 to acquire the campus comprising nine acres of land and two buildings, with a total of approximately 433,000 square feet of space for a total price of $73.2 million (C$93.3 million). On July 15, 2022, our wholly owned subsidiary Visionary Education & Service Management Inc. entered into the eighth amendment to the Moatfield Drive Purchase Agreement. Pursuant to the eighth amendment, VESM paid an eighth deposit of approximately $0.8 million (C$1 million) on July 15, 2022 and the closing of the two Moatfield Drive buildings was postponed to August 18, 2022.

We plan to have the facility available for the initial PPP students in September 2022, provided that we can obtain sufficient financing to close the acquisition and make necessary renovations. The current leases, for an aggregate of approximately 388,000 square feet, will expire in September 2025 and May 2026. With the current tenants occupying their respective spaces, there will be 26,000 square feet of available space for our use. Should our PPP program require additional space before the expiration of these leases, we intend to use space at the properties at Town Centre Boulevard.

While we are in discussions to obtain the balance of the financing necessary to close the acquisition, we do not yet have any agreement for the financing for the acquisition or build-out of VUT, and there is no assurance that such financing will be available on terms acceptable to us or at all. We have paid a $15.04 million (C$18.8 million) non-refundable deposit. Ms. Zhou, our founder and majority shareholder has loaned us $4,674,329 to date for the deposit and agreed to loan us $4.8 million by August 31 for funds we also used for the deposit. See “Business-Properties;” “Risk Factors - Potential Loss of Revenue from Property Leases; Related Party Transactions.”

Land Purchases

From 2013 through 2015, 123 Real Estate purchased 28 parcels for residential construction on 22.4 acres of land in Peterborough, Ontario, which we acquired as a result of our acquisition of 123 Real Estate. The initial intent of the purchase was to build an international student housing center. Partly because of the economic adversity caused by the COVID pandemic, we revised our strategy and are not seeking vacant land for development of educational facilities, preferring to acquire existing structures. We sold one parcel of land in the fiscal year ended March 31, 2019, sold 19 parcels in the fiscal year ended March 31, 2021 and utilized a portion of the approximately $6.6 million in sales revenue to purchase additional education companies. We have sold an additional eight parcels in the fiscal year ended March 31, 2022 for revenue of approximately $2.3 million, which we are using for our education business’ operating expenses.

Government Regulation

Canadian Federal and Provincial Laws Governing the Administration of Education

Disclaimer:

This summary is based on the provisions of the applicable laws and regulations in force as of October 1, 2021. This summary considers all specific proposals to amend the Income Tax Act publicly announced by or on behalf of or by the Government of Canada or any applicable Canadian provincial or territorial jurisdiction prior to October 1, 2021 (the “Proposed Amendments”) and assumes that all Proposed Amendments will be enacted in the form proposed. However, no assurances can be given that the Proposed Amendments will be enacted as proposed, or at all. This summary does not otherwise consider or anticipate any changes in law or administrative policy whether by legislative, regulatory, administrative, or judicial action nor does it consider legislation or considerations of any foreign jurisdiction, which may differ from those discussed herein.

Law and Regulatory Matters

As a service provider to students and working with education institutions in various levels, both in Canada and internationally, either directly or indirectly through our arrangements with domestic and global partners, we are required to comply with education laws and regulations in Canada.

General

Canada has no federal education department or similar governmental authority. All delivery, organization, and evaluation of educational services fall under the jurisdiction of its 10 provinces and 3 territories, subject to the federal laws which indirectly impacts education as further explained below. The only exception to this at the post-secondary level is the Royal Military College, which is part of the Canadian Ministry of National Defense. The provincial/territorial jurisdiction over education was determined in 1867 and is explicitly set out in Canada’s Constitution Act 1867. One reason for this decentralization was to protect the interests of the different populations who inhabited the particular parts of the country, as strong ethnic and religious differences existed by region.

The actual delivery and structure of educational services is, however, very similar across the country, even though there are differences between jurisdictions which were due to the unique historical, cultural, geographical, and political circumstances upon which such jurisdictions evolved. Each jurisdiction has its own Education Act, which is a detailed legal document that outlines how education will be organized and delivered, along with student eligibility criteria, duties of employees (teachers, principals, superintendents, and support staff), accountability measures, and different types of programs permitted and/or available. Most jurisdictions, including Ontario, also have other Acts dealing with community colleges, universities as well as private career colleges.

Federal Laws Relating to Education in Canada

For greater clarity, in addition to the provincial/territorial Education Acts noted above, the requirements set out in the following federal laws and regulations has impact on the delivery of education in Canada:

The Canadian Human Rights Act 1985 requires that individuals cannot be discriminated against on the basis of: race, national or ethnic origin, color, religion, age, sex, sexual orientation, marital status, family status, disability, and covers the field of education.

The Indian Act 1985 defines the rights and responsibilities of First Nations people and communities, and the role of the federal government in First Nations matters. This includes federal responsibility for the education of First Nations children and youth living on reserve. The Indian Act also enables First Nations to enter into agreements with provincial school boards so that their students may attend schools that are located off reserve.

The Copyright Act 1985 establishes the rights of ownership, reproduction and use of original works (for example, textbooks and other educational resources, literature, music, academic writing) and the penalties for unauthorized use of such works. All provincial school authorities must comply with international and federal copyright legislation and related agreements.

Provincial Authorities Administrating Education in Canada

Under the Canadian Constitution, provincial governments have exclusive responsibility for all levels of education. There is no ministry or department of education at the federal level.

In the province of Ontario, The Ministry of Colleges and Universities is the ministry of the government of Ontario responsible for the administration of policies, laws, and funding relating to Ontario’s 24 public colleges and 22 public universities as well as private colleges and universities. This ministry is one of two education ministries, the other being the Ministry of Education, which is responsible for the administration of the system of publicly funded elementary and secondary school education in Ontario.

The key legislation governing private career colleges in Ontario is the Private Colleges Act (2005) and associated Regulations. For those private career colleges interested in developing a public-private-partnership with a public college (referred to as a PPP), they are also subject to the Minister’s Binding Policy Directive of December 2019, but only for those activities falling within the purview of the PPP. From a legal perspective, the Minister’s Binding Policy Directive of December 2019 regulates the public colleges who enter into partnerships with private career colleges. Notwithstanding, the Directive can have an impact on private career colleges.

Within the Ministry, the administrative unit responsible for private career colleges is headed by a Superintendent of Private Career Colleges. The Superintendent is responsible for ensuring that all private career colleges operate in accordance with the Private Career Colleges Act. Among the key requirements of the Act are the need to have an approved license to operate and that programs of study leading to a credential have been approved by the Ministry. In addition, the Act and Regulations specify the reporting requirement, including Annual Reports and data on key performance indicators.

The Ministry of Colleges and Universities of Ontario also works with the following organizations:

Elementary and secondary education in Ontario is governed by the Education Act. Section 16 of the Act deals with private schools. Although all private schools must be approved to operate through an annual Notice of Intent process, those wishing to grant the Ontario Secondary School Diploma (OSSD) are designated as “Inspected Private Schools” and subject to additional requirements to ensure that the Provincial curriculum is being respected. The Policy Procures Manual (p. 6) defines “Inspected Private Schools” as follows: “Inspected private schools are seeking or have been given authority by the Ministry to provide courses offering credits toward the OSSD. This includes private schools offering a combined elementary-secondary curriculum (in which case only the secondary school will be inspected) and private schools offering credits in an online environment.”

Although referred to an inspection of the private school, the scope of the inspection is limited to the curriculum. The Policy Procedures Manual (p. 23) states the following: “The Ministry inspects all private schools seeking authority to grant credits in courses leading to the OSSD. The purpose of the inspection is to determine whether the instruction in OSSD credit courses is being delivered in compliance with Ministry requirements, including curriculum, assessment and evaluation policies.” Given that the OSSD diploma granted by the inspected private school is recognized as the equivalent to the diplomas granted by the public school boards, this is not an unexpected requirement.

The Ministry of Education of Ontario is affiliated with the following independent agencies, boards and commissions:

Education and Immigration Regulations in Canada

As a service provider to international students of various levels in Canada, we are required to comply with immigration laws and regulations in Canada.

IRCC is the federal department of the Government of Canada responsible for immigration matters in Canada, and includes the processing of refugees, and the granting of Canadian citizenship. We employ professionals to provide visa and immigration-related services to student clients in Canada. These professionals may include RCICs, Canadian Law Society members including licensed lawyers and paralegals. When RCIC consultant provides immigration related services with IRCC on behalf of client, his or her work will be under the supervision of ICCRC. ICCRC is the national regulatory body that promotes and protects the public interest by overseeing regulated immigration and citizenship consultants and international student advisors. On November 23, 2021, ICCRC will officially become the College of Immigration and Citizenship Consultants (CICC).

ICCRC’s current federal mandate stems from the Immigration and Refugee Protection Act (IRPA) 2001 and the Citizenship Act 1985 which require anyone providing Canadian immigration or citizenship advice or representation for a fee or other consideration to be a member in good standing of ICCRC, a Canadian Law Society or the Chambre des notaires du Québec.

When the student client’s representative is a member from Canadian Law Society, such as the Law Society of Ontario, the representative could be a licensed lawyer or a licensed paralegal, then the work of this representative should be under the supervision of its governing body, the Law Society of Ontario. Created by an act of the Legislative Assembly in 1797, the Law Society of Ontario governs Ontario’s lawyers and paralegals in the public interest by ensuring that the people of Ontario are served by lawyers and paralegals who meet high standards of learning, competence and professional conduct. The Law Society regulates, licenses and disciplines Ontario’s more than 55,000 lawyers and over 9,000 licensed paralegals pursuant to the Law Society Act and the Law Society’s rules, regulations and guidelines.

RCICs or lawyers and paralegals all have mandatory professional insurance to cover its liabilities. Only lawyers and paralegals can provide legal services directly to the public. The Law Society’s by-laws, Rules of Professional Conduct for lawyers and Paralegal Rules of Conduct, all based on the Law Society Act, set out the professional and ethical obligations of our lawyers and paralegals.

Our management considers our employees as key assets which play a pivotal role in our growth. It is our policy to maximize the potential of our employees through training and development. We provide on-the-job training to our employees covering various aspects of the marketing solution industry to keep abreast of the latest industry development. Our employee training and development aim at equipping our employees with the knowledge and skills necessary to perform their job functions and enhance their capability.

We do not engage any recruitment agent to hire our employees. We have a recruitment policy in place to maintain a fair and effective recruitment procedure. Under such policy, we normally recruit employees with (a) appropriate skills, both technical and personal; (b) relevant academic background; and (c) work experience in order to meet our current and future needs and to ensure that the employees appointed are qualified and competent to carry out the duties.

We have always maintained a good working relationship with our employees. As of the date of this annual report, none of our employees were members of any labor union, nor were there any labor dispute involving or against us.

We generally remunerate our employees with a fixed salary and a discretionary bonus based on our performance. We have designed an annual review system to assess the performance of our employees, which forms the basis of our decision with respect to salary increment, bonus and promotion.

Properties

As of the date of this annual report, we own the following properties: 200 Town Centre Boulevard, 260 Town Centre Boulevard and 41 Metropolitan Road. We executed an agreement in May 2021 to purchase the property at 95 and 105 Moatfield Road. The closing is expected to occur on August 18, 2022. We have commercial tenants at each of the locations All leases are with independent third parties, except as indicated below for three subsidiaries that lease space at 200 Town Centre Boulevard. We intend to use any vacant space that becomes available in any building for use by us and our subsidiaries.

200 Town Centre Boulevard

The property is a 2.09-acre property site with an office/commercial building located at 200 Town Centre Boulevard, Markham, Ontario, Canada. The building is 52,157 square feet and has a total of 18 units. The nine leases with unaffiliated third parties range in size from approximately 1,800 to 6,200 square feet, with rents from approximately $5,000 to $18,000 per month and expiration dates between February 2022 and July 2027. Three of our subsidiaries, Toronto Art Academy, Lowell Academy and 7621531 Canada Inc. lease between approximately 1,000 and 1,700 square feet each with rents from approximately $3,000 to $4,700 per month that expire between August 2023 and August 2026.

260 Town Centre Boulevard

The property is a 1.73-acre property site with an office/commercial building located at 260 Town Centre Boulevard, Markham, Ontario, Canada. The building is 39,252 square feet and has a total of five units. At this location, the five units are leased to unaffiliated third parties, who rent between approximately 4,400 and 13,700 square feet for rents ranging from approximately $15,000 to $35,000 per month and terms that expire between June 2022 and October 2024.

41 Metropolitan Road

The property is a 4.25-acre site with an industrial/office warehouse located at 41 Metropolitan Road, Toronto, Ontario, Canada. The building on the property is 62,410 square feet and is fully rented. Also located on the property is a North and South Warehouse. We have 12 unaffiliated tenants who each lease between approximately 200 and 13,000 square feet of space for monthly rents of between approximately $500 and $17,000 with terms that expire between December 2021 and April 2026.

95-105 Moatfield Drive

The property is a campus located at 95-105 Moatfield Drive, North York, Canada with two buildings located on the property: 95 Moatfield and 105 Moatfield. 95 Moatfield comprises 5 units that total 156,426 square feet. 105 Moatfield comprises 19 units that total 248,981 square feet. The total space that is not occupied is 27,786 square feet. We are scheduled to close the transaction on August 18, 2022.

Eastern Ontario

Our Company purchased a total of 28 lots of vacant land located in Peterborough, Ontario between 2013 and 2015. In the fiscal year ending in 2019, we sold one lot of vacant land to a third party. In the fiscal year ending March 31, 2021, we sold 19 lots of the vacant land to third parties and in the fiscal year ending March 31, 2022, we sold the remaining eight lots to unaffiliated third parties. We realized a total of approximately $6.6 million revenue from the sales in the fiscal year ended March 31, 2021 and approximately $2.3 million from the sales in the fiscal year ended March 31, 2022.

As at March 31, 2022 and 2021, our Company has nil lots and 8 lots of vacant land in Eastern Ontario respectively.

Environmental Regulations

Our operations are subject to local, state, and federal laws and regulations governing environmental quality and pollution control. To date, our compliance with these regulations has had no material effect on our operations, capital, earnings, or competitive position, and the cost of such compliance has not been material. We are unable to assess or predict at this time what effect additional regulations or legislation could have on our activities.