Skillful Craftsman Education Technology Ltd

Skillful Craftsman Education Technology Ltd. operates in the rapidly evolving, highly fragmented, and competitive artificial intelligence skills training, software development, artificial intelligence technology services, API interface services, and related product sales industry. The industry is characterized by competition based on brand recognition, product quality, price, and innovation, with competitors able to devote greater resources to development, promotion, and sale of programs and services. The company has been transitioning from the vocational education and training platform business to this new AI-focused business, incorporating Skilland Digital in Hong Kong to develop these operations.

The company faces significant competition in each type of product or service offered and in each geographic market where it operates. Competitors may be able to devote greater resources to development, promotion, and sale of programs and services, respond more quickly to changes in customers' needs, market trends, or new technologies, and have gained more experience due to longer operating history. The company cannot assure that it will be able to compete successfully against current or future competitors, and may be pressured to reduce fees charged or increase spending in response to competition to retain or attract more customers or pursue new market opportunities.

The company generates revenue through artificial intelligence skills training, software development, artificial intelligence technology services, API interface services, and related product sales. The business model relies on attracting and establishing customers on these new business lines, with success depending on the ability to develop new programs and systems to respond to changes in market trends and customers' demands, manage growth while maintaining consistent high quality, broaden relationships with strategic partners, and market apps and products effectively to a broader base of prospective customers.

The company's revenue streams include technical services revenue, online VIP membership revenue, and online SVIP membership revenue. For the fiscal year ended March 31, 2026, technical services revenue was $1,089,000 ¹, online VIP membership revenue was $0 ², and online SVIP membership revenue was $0 ³. For the fiscal year ended March 31, 2025, technical services revenue was $1,088,000 ⁴, online VIP membership revenue was $0 ⁵, and online SVIP membership revenue was $0 ⁶. For the fiscal year ended March 31, 2024, technical services revenue was $1,088,000 ⁷, online VIP membership revenue was $0 ⁸, and online SVIP membership revenue was $0 ⁹. The company's operations are primarily conducted through its PRC subsidiaries, with the business transitioning from vocational education and training platforms to the new business of artificial intelligence skills training, software development, artificial intelligence technology services, API interface services, and related product sales.

On March 17, 2025, Skillful Craftsman Network Technology (WUXI) Co. Ltd. entered into a Termination Agreement for VIE Agreements with Wuxi Kingway Technology Co., Ltd., Xiaofeng Gao and Lugang Hua to terminate the VIE Agreements dated July 17, 2019. Upon termination, the Company and WOFE no longer control the VIE and its subsidiaries and their business operations. On August 7, 2026, the Company entered into a Share Purchase Agreement with Penguins Investing Carnival Ltd., a British Virgin Islands company, to transfer 100% equity interest of Easy Skill Technology Ltd. and all of its subsidiaries for a total price of $4.5 million ¹⁰, payable in two installments: 20% ¹¹ of the Purchase Price within 5 business days of the Agreement and 80% ¹² within 1 year from the date of the Agreement. As of the date of the report, the Company has received the payment of 20% ¹³ of the Purchase Price. The Company is currently conducting business primarily through Skilland Digital. The WOFE has cumulatively transferred RMB 4.0 million (approximately $582,098 ¹⁴) to the VIE as repayment of the VIE's loan to the WOFE in relation to the consideration for the WOFE's acquisition of Wuxi Talent Home.

For the fiscal year ended March 31, 2026, total revenues were $1,089,000 ¹⁵, compared to $1,088,000 ¹⁶ for the fiscal year ended March 31, 2025, and $1,088,000 ¹⁷ for the fiscal year ended March 31, 2024. Net income for fiscal year 2026 was $1,089,000 ¹⁸, compared to $1,088,000 ¹⁹ for fiscal year 2025, and $1,088,000 ²⁰ for fiscal year 2024. The company's financial results may fluctuate significantly due to factors including the ability to attract new customers, maintain relationships with existing customers, expand into new territories in international markets, the amount and timing of operating expenses related to maintenance and expansion of business, operations and infrastructure, general economic industry and market conditions, emphasis on customer experience instead of near-term growth, and the timing of expenses related to development or acquisition of technologies or businesses and potential future charges for impairment of goodwill.

The company's primary growth vector is the transition from the vocational education and training platform business to the new business of artificial intelligence skills training, software development, artificial intelligence technology services, API interface services, and related product sales. The company has incorporated Skilland Digital in Hong Kong to develop this new business. Success depends on the ability to continue to attract and establish customers, develop new programs and systems to respond to changes in market trends and customers' demands, manage growth while maintaining consistent high quality, broaden relationships with strategic partners, and market apps and products effectively to a broader base of prospective customers.

The company's growth strategy also involves expanding into new territories in international markets. The ability to attract new customers, maintain relationships with existing customers, and expand into new territories in international markets are identified as factors that may cause fluctuations in quarterly results. The company may evaluate and consider strategic transactions, combinations, acquisitions, or alliances to enhance the existing business or develop new products and services, though these could be material to financial condition and results of operations if consummated.

The filing does not provide specific margin trajectory, cost structure evolution, or efficiency or restructuring targets with exact figures.

The company's operational outlook involves developing new programs and systems to respond to changes in market trends and customers' demands, managing growth while maintaining consistent high quality, and broadening relationships with strategic partners. The company has adopted security policies and measures to protect proprietary data and customer information, and has made preparations for compliance with evolving PRC laws and regulations regarding data privacy, cybersecurity, and personal information protection, including planning of information collection, assessing whether current business operations meet regulatory requirements, implementing background checks on personnel, security training, regular network security drills, and security testing and evaluation, and establishing a sustainable framework for personal information protection.

The filing does not specify R&D spending levels, capital expenditure plans, share repurchase authorization amounts, or dividend policy with exact figures. The company has never declared or paid any dividend on ordinary shares and does not anticipate paying any dividends in the future, currently intending to retain all future earnings to finance subsidiaries' operations and expand its business.

The company faces structural headwinds including the need to continue to attract and establish customers on the new business of artificial intelligence skills training, software development, artificial intelligence technology services, API interface services, and related product sales. If unable to obtain and maintain new customers, net revenue may decline. The company's results of operations may fluctuate significantly and may not fully reflect the underlying performance of the business due to factors including the ability to attract new customers, maintain relationships with existing customers, expand into new territories in international markets, the amount and timing of operating expenses, general economic conditions, emphasis on customer experience instead of near-term growth, and timing of expenses related to development or acquisition of technologies or businesses.

The company faces significant regulatory constraints in China. The PRC government has initiated a series of regulatory actions to regulate business operations in China, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas, adopting new measures to extend the scope of cybersecurity reviews, and expanding efforts in anti-monopoly enforcement. The company faces risks relating to regulatory approvals on overseas listings, anti-monopoly regulatory actions, and oversight on cybersecurity and data privacy. The New Overseas Listing Rules took effect on March 31, 2023, requiring domestic enterprises to complete filings with CSRC under certain circumstances. The company may be subject to cybersecurity review requirements under the Cybersecurity Review Measures, which provide that Network Platform Operators with personal information data of more than one million users that seek for listing in a foreign country are obliged to apply for a cybersecurity review. The company's PRC legal counsel advised that the company and its PRC subsidiaries are not required to apply for a cyber security review with CAC since the company listed its ordinary shares on Nasdaq before the effective date of the Review Measures.

The company faces material risk from its indirect ownership of a 3% ²¹ minority equity interest in Fujian Pingtan Ocean Fisheries Group Co., Ltd., a PRC company designated by OFAC as a Specially Designated National in December 2022, which may expose the company to enforcement actions, secondary sanctions designation, and restrictions on access to U.S. capital markets. The company is classified as a passive foreign investment company for the fiscal year ended March 31, 2026, resulting in adverse U.S. federal income tax consequences for U.S. taxpayers who own ordinary shares. The company's dual-class share structure gives Mr. Xuejun Ji, who beneficially owns 666,666 ²² issued and outstanding Series B Preference Shares each entitled to 200 ²³ votes, concentrated control over more than 50% ²⁴ of the voting power, limiting other shareholders' ability to influence corporate matters. The company faces significant regulatory risks from evolving PRC laws including the Cybersecurity Review Measures requiring Network Platform Operators with personal information data of more than one million ²⁵ users seeking foreign listing to apply for cybersecurity review, and the Data Security Law and Personal Information Protection Law which impose compliance obligations that could result in government enforcement actions, fines, penalties, and suspension of non-compliant operations.

Management's message emphasizes the company's transition from the vocational education and training platform business to the new business of artificial intelligence skills training, software development, artificial intelligence technology services, API interface services, and related product sales. The company has incorporated Skilland Digital in Hong Kong to develop this new business. Management has identified the ability to continue to attract and establish customers as critical to the continued success and growth of the business, depending on several factors including the ability to develop new programs and systems to respond to changes in market trends and customers' demands, manage growth while maintaining consistent high quality, broaden relationships with strategic partners, and market apps and products effectively to a broader base of prospective customers. The company's strategic priorities include transitioning to the new AI-focused business, developing Skilland Digital in Hong Kong, and navigating the complex and evolving PRC regulatory environment including compliance with the New Overseas Listing Rules, Cybersecurity Review Measures, Data Security Law, and Personal Information Protection Law.