The following management's discussion and analysis ("MD&A") should be read in conjunction with financial statements of Quality Online Education Group Inc. (ticker symbol: QOEG) for the years ended August 31, 2022 and 2021.

Safe Harbor for Forward-Looking Statements

Certain statements included in this MD&A constitute forward-looking statements, including those identified by the expressions anticipate, believe, plan, estimate, expect, intend, and similar expressions to the extent they relate to Quality Online Education Group Inc. (ticker symbol: QOEG) or its management. These forward-looking statements are not facts, promises, or guarantees; rather, they reflect current expectations regarding future results or events. These forward-looking statements are subject to risks and uncertainties that could cause actual results, activities, performance, or events to differ materially from current expectations. These include risks related to revenue growth, operating results, industry, products, and litigation, as well as the matters discussed in QOEG's MD&A under Risk Factors. Readers should not place undue reliance on any such forward-looking statements. QOEG disclaims any obligation to publicly update or to revise any such statements to reflect any change in the Company's expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included in this report.




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Liquidity, Capital Resources and Plan of Operations

Going Concern

Our financial statements appearing elsewhere in this offering circular have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company's ability to continue as a going concern is contingent upon its ability to raise additional capital as required. For the year ended August 31, 2022, the Company incurred net losses of ($3,790,411). Initially, we intend to finance our operations through equity financings.

Our auditors have indicated that these conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.

There are no external sources of liquidity.

Financings and Securities Offerings

Investing Activities.

Since inception, our principal sources of operating funds have been proceeds from equity financing including the sale of our Common Stock to initial investors known to management and principal shareholders of the Company. We do not expect that our current cash on hand will fund our existing operations. We will need to raise additional capital in order execute our business plan and growth goals for at least the next twelve-month period thereafter. If the Company is unable to raise sufficient additional funds, it will have to execute a slower than planned growth path, reduce overhead and scale back its business plan until sufficient additional capital is raised to support further operational expansion and growth. There can be no assurance that such a plan will be successful.

Business Strategy

Quality Online Education Group has founded in Aug 2018 in Ontario Canada with a global reach. We provide comprehensive online English lessons to students around the world. English education resource is unbalanced between areas. To address this unmet need, we have developed online and mobile education platforms, customized the content and optimized the marketing method to provide high quality yet affordable products that enable students around the world to take live online English lessons with native English-speaking teachers. We connect our students with highly qualified teachers who have gone through our rigorous selection and training process before they deliver lessons. We hire, train, and manage our tutors from North America and the Philippines.

Our market consists of students from K12 to adults. The lessons we provide are focused on the interaction and application of English.

We have successfully launched a direct selling model through Mommy Influencer in different part of Southeast Asia countries. This business model is cost-effective, saving us significant sales and marketing dollars and build a better cash flow outlook compared to the competitors who only use online advertisement. With the proper expansion of operations, coupled with the replication of our direct selling model to targeted areas around the world more than 200 cities around the globe, we expect to achieve magnitudes of exponential growth.

Company's Plan of Operation.

We are launching small group lessons, where one teacher simultaneously teaches 2-4 students online. The one-to-many model has a lower unit price than other competitors, and may be affordable for more students yet yield a higher margin.

We intend to further develop our sales platform by entering additional cities in Southeast Asia and other countries in need of English teaching resources. Also, we plan to develop and launch new product lines such as the test preparation training for IELTS and non-English types. Our current student base covers Japan, Thailand, France and Germany. We anticipate a more significant profit margin through increasing the student retention rate and launching new product lines, like group lessons.




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Revenue

During the year ended 31st Aug, 2022, the Company billed our customers over $2.70 million and realized a revenue of $1.67 million compared to $481,561 for the year ended 2021. The gross margin for the year ended 31st Aug, 2022 was $961,424 or 57.3%, compared to $45,365 or 9.4% for the year ended 31st Aug, 2021. The increased average selling prices and reduced free demo and trial classes for customers primarily drove the increase in gross margin.

The low gross margin for both periods ended 2020 and 2021 was primarily due to:

1) Provided free demo classes and trial classes to students for better market

adoption;

2) Intentionally lowered our pricing in the competitive market for customer

attraction.

We terminated the only VIE contract in September 2021, and stopped acquiring students from mainland China in December 2021, and ceased offering tutoring services to students in mainland China by the end of April 2022. Our focus is on North America, Southeast Asia and Europe markets. We are ambitiously looking for more overseas business partners, and researched and developed our education platform better for customers. As a result, we do not anticipate that the cessation of services to students in China will negatively impact our revenues in the future.

Operating expenses



The following is the breakdown of operating expenses for year ended of 8/31/22
and 8/31/21:

                                     For year ended       For year ended
                                       8/31/2022            8/31/2021
Operating expenses:
Advertising & Marketing                       67,414               59,739
Depreciation                                   3,599               68,842
Commission                                   412,664               82,729
Business consulting                        3,962,795               30,828
General & Administrative expenses            119,447              355,178
Legal & Professional fees                     93,408              134,633
Payroll & Benefits                            92,508            1,408,434
Total operating expenses                   4,751,835            2,140,383

Operating expenses were $4,751,835 for the year ended Aug 31, 2022 compared to $2,140,383 for the year ended Aug 31, 2021. The 122% increase in operating expenses during the year ended Aug 31, 2022 was primarily driven by business consulting expenses.

Advertising and Marketing

Advertising and marketing expenses are related to promoting the Company and service to our potential customers. For year ended Aug 31, 2022, the Company incurred an advertising and marketing expense of $67,414 compared to $59,739 for the same period of the prior year. The increase was mainly due to the more usage of services from social media channels and marketing companies.

Depreciation

Depreciation is related to computers, office furniture and equipment. For year ended Aug 31, 2022, the Company incurred a depreciation expense of $3,599, compared to $68,842 for the same period of the prior year. The decrease in depreciation expenses was due to the termination of a VIE with Tianjin Zhipin Education Technology Co., Ltd.




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Commission

Commission expenses are related to sales made by our Mommy Influencers and sales teams. For year ended Aug 31, 2022, the Company incurred a commission expense of $412,664, compared to $82,729 for the same period of the prior year. The increase in commission expenses was mainly driven by recruiting more commission-based salespeople.

Business Consulting

Business consulting expenses are related to the professional services provided by contractors. For year ended Aug 31, 2022, the Company incurred a business consulting fee of $3,962,795 compared to $30,828 for the same period of the prior year. The significant increase was primarily due to the expenses related to the service contract with Tianjin Zhipin Education Technology Co., Ltd., which provided online education market research, business and information technology consulting services.

General and Administrative expenses

General and administrative expenses are related to rent, office expenses, utilities, and meals, and entertainment. For year ended Aug 31, 2022, the Company incurred General and Administrative expenses of $119,447, compared to $355,178 for the same period of the prior year. The decrease was primarily due to the termination of the VIE with Tianjin Zhipin Education Technology Co., Ltd.

Legal and Professional fees

Legal and professional fees are related to professional services provided by lawyers and accountants. For year ended Aug 31, 2022, the Company incurred a legal and professional expense of $93,408 as compared to $134,633 for the same period of the prior year. There increase in the prior year was due to the audit fees the Company paid to the previous years.

Payroll& Benefits

For year ended Aug 31, 2022, payroll and benefits were $92,508, compared to $1,408,434 for the prior year. The significant decrease was primarily due to the termination of VIE contract with Tianjin Zhipin Education Technology Co., Ltd.

Contractual Obligations, Commitments and Contingencies

As of the date there are none.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements.

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