CXJ GROUP CO., LIMITED Overview
We are engaged in trading of the automobile exhaust cleaner products and providing the brand name management and related training services.
COVID-19, a viral pandemic, has affected the international community, public health, and financial markets throughout the world. Similarly, this public health crisis has impacted the Company, its operations, and the results of those business activities as of year endedMay 31, 2021 .
Results of Operations
Our operations for the years ended
Year ended
Year Ended Year to Year Comparison
May 31, May 31, Increase/ Percentage
2021 2020 (Decrease) Change
$ $ $ %
Revenue 1,075,010 803,840 271,170 33.7 %Cost of Goods Sold (419,152 ) (614,967 ) 195,815 (31.8 )% Gross Profit 655,858 188,873 466,985 247.2 % Operating Expenses (2,536,599 ) (877,847 ) 1,658,752 (189.0 )% Other Income (Expenses) 2,485 7,926 5,441 68.6 % Interest Income 199
199
Provision for Income Taxes (8,185 ) (1,418 )
6,767 (477.2 )% Net Income (Loss) (1,886,242 ) (682,466 ) 2,138,144 (313.3 )%
The revenue for the year ended
Cost of goods sold for the year endedMay 31, 2021 decreased by$195,815 to$419,152 compared with the same period in 2020. The decrement is mainly due to the increase in sales of higher profitable products motor oil and decrease in sales of lower profitable product exhaust cleaner. Operating expenses for the year endedMay 31, 2021 increased by$1,658,752 to$2,536,599 compared with the same period in 2020. The increase is mainly due to write off of bad debts$1,593,899 and increased of research and development expenses$75,062 and amortization of intangible assets$11,522 . Net loss for the year endedMay 31, 2021 decreased by$2,138,144 to net loss$1,886,242 due to the write off bad debts$1,593,899 and increased of research and development expenses$75,062 and amortization of intangible assets$11,522 . 8 Table of Contents Liquidity and Capital Reserve
Since commencing operations, our working capital needs are generated from
operations, and we had generated cash flow
We are in start-up stage operations and have generated limited revenues. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products. We expect that we will be able to meet our needs to fund operations, capital expenditures and other commitments in the next 12 months primarily with our cash and cash equivalents, operating cash flows. We may, however, require additional cash resources due to changes in business conditions or other future developments. If these sources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity or equity-linked securities could contractual result in additional dilution to stockholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financial covenants that would restrict operations. Financing may not be available in amounts or on
terms acceptable to us, or at all.
The following table provides selected financial data about our Company as of
Working Capital
The following table provides selected financial data about our Company as of
Year Ended Year to Year Comparison
May 31, May 31, Increase/ Percentage
2021 2020 (Decrease) Change
$ $ $ %
Cash 340,109 15,588 324,521 2082 %
Current Assets 671,584 3,262,890 (2,591,306 ) (79 )%
Current Liabilities 3,434,867 4,001,981 (567,114 ) (14 )%
Working Capital (Deficiency) (2,763,283 ) (739,091 ) (2,024,192 ) 274 % The decrease in working capital deficiency was primarily attributed to write off bad debts$1,593,899 and increased research and development expenses$75,062 and amortization of intangible assets$11,522 .. The decrease in current liabilities was primarily attributed to amortization of advance received of brand name management fees. 9 Table of Contents Cash Flow Year Ended Year to Year Comparison May 31, May 31, Increase/ Percentage 2021 2020 (Decrease) Change $ $ $ % Cash Flows provided by (used in) operating activities 492,401 89,437 402,964 451 % Cash Flows used in Investing activities (12,014 ) (29,646 ) 17,632 (59 )% Cash Flows provided by (used in ) financing activities. 8,725 (46,505 ) 55,230 (119 )% Effects on change in foreign exchange rate (164,591 ) 2,302 (166,893 ) (7250 )% Net Change in cash during period 324,521 15,588 308,933 1982 %
Cash Flow from Operating Activities
During the year endedMay 31, 2021 , cash flow from operating activities increased by$402,964 to$492,401 compared with same period in 2020. The increase in cash flow provided by operation activities is primarily due to an increase cash flow$1,396,739 from prepayment, deposits and other receivable, decrease cash flow$260,480 from trade receivable, decrease cash flow$714,454 from accrued liabilities, other payable and deposits.
Cash Flow from Investing Activities
During the year ended
Cash Flow from Financing Activities
During the year endedMay 31, 2021 , cash flow from financing activities increased by$55,230 to$8,725 compared with same period in 2020. The increase in cash flow$55,230 from financing activities is mainly due to the director advance to company during the year.
Critical Accounting Policies and Estimates
The preparation of consolidated financial statements and related disclosures in conformity withU.S. generally accepted accounting principles and the Company's discussion and analysis of its financial condition and operating results require the Company's management to make judgments, assumptions and estimates that affect the amounts reported. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates, and such differences may be material.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
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