Overview

American Education Center, Inc. was incorporated in Nevada ("AEC Nevada") in
May 2014 as a holding company, and operates through its wholly owned
subsidiaries, American Education Center, Inc., incorporated in the State of New
York in 1999 ("AEC New York"), AEC Management Ltd., incorporated in the British
Virgin Islands on October 23, 2018 ("AEC BVI") and the subsidiaries of AEC BVI.

For approximately 20 years, AEC New York has devoted itself to international education exchanges between China and the U.S., by providing education and career enrichment opportunities for students, teachers, and educational institutions from both countries.



AEC Nevada acquired AEC Southern Management Co., Ltd, a company formed pursuant
to the laws of England and Wales ("AEC Southern UK") and its subsidiaries in
2016 pursuant to a certain share exchange agreement. AEC Southern UK holds 100%
of the equity interests in AEC Southern Management Limited, a Hong Kong company
("AEC Southern HK") incorporated on December 29, 2015, with a registered capital
of HK$10,000. AEC Southern UK owns 100% of the equity interests in Qianhai
Meijiao Education Consulting Management Co., Ltd. ("AEC Southern Shenzhen"), a
foreign wholly owned subsidiary incorporated pursuant to PRC law on March 29,
2016, with a registered capital of RMB5,000,000.

On July 10, 2018, AEC New York acquired a 51% equity ownership in American
Institute of Financial Intelligence LLC, a New Jersey limited liability company
("AIFI") from FIFPAC Inc. ("FIFPAC"), a New Jersey corporation, the then 100%
owner of AIFI, pursuant to a Business Purchase Agreement. AIFI currently does
not have any active operating activities.

On April 22, 2019, AEC BVI acquired AEC Southern HK and its subsidiary, AEC
Southern Shenzhen, pursuant to a share transfer agreement by and among the
related parties, AEC BVI and AEC Southern UK, for a nominal consideration (the
"AEC Southern HK Transfer"). On May 1, 2019, Pursuant to a certain share
exchange agreement dated May 1, 2019, AEC Nevada sold 100% of the equity
interest in AEC Southern UK to three individuals, Ye Tian, Rongxia Wang and
Weishou Li (the "AEC Southern UK Sale"). Accordingly, following the transactions
underlying the AEC Southern HK Transfer and the AEC Southern UK Sale, AEC
Southern UK is no longer a subsidiary of ours, and we operate AEC Southern HK
and AEC Southern Shenzhen through AEC BVI.

AEC BVI, via its operating entity in the PRC, AEC Southern Shenzhen, serves as a
local platform for expanding the Company's business in mainland China. Our PRC
operations are based in the city of Shenzhen, Guangdong province, a city
designated by the PRC as a Special Economic Zone ("SEZ"). SEZs are granted a
more free-market oriented economic and regulatory environment, with business and
tax policies designed to attract foreign investment and technology.

On May 22, 2020, AEC Southern HK formed Yiqilai (Shenzhen) Consulting Management
Co., Ltd. ("AEC YQL") in Shenzhen, China pursuant to PRC laws. AEC YQL is a
wholly owned subsidiary of AEC Southern HK, and as of the date of this Quarterly
Report on Form 10-Q, does not have significant business activities.

On August 18, 2020, AEC YQL entered into a series of contractual arrangements,
including an Equity Pledge Agreement, Exclusive Management Consulting Agreement,
Exclusive Option Agreement, and Irrevocable Power of Attorney (collectively, the
"VIE Agreements"), with Shenzhen Zhongwei Technology Co., Ltd. ("Zhongwei"), a
PRC company, and Ding Xiang (Shenzhen) Investment Co., Ltd., a PRC company
("Pledgor"), the sole shareholder of Zhongwei controlled by Dewei Li and Bin Liu
(the "Zhongwei Ultimate Shareholders"). Pursuant to the VIE Agreements, AEC YQL
gained control over Zhongwei. Zhongwei is involved in, among other things,
e-commerce, and the Company plans to leverage Zhongwei's current e-commerce
platform, and to engage in business such as online education e-commerce. In
consideration for entering into the transactions contemplated by the VIE
Agreements, on August 18, 2020, the Company entered into a Share Issuance
Agreement (the "Share Issuance Agreement") with the Zhongwei Ultimate
Shareholders, whereby the Company agreed to issue to the Zhongwei Ultimate
Shareholders an aggregate of 2,640,690 shares of the Company's common stock, par
value $0.001. The transactions underlying the Share Issuance Agreement is closed
in August 2020. Although currently substantially all of our revenue comes from
our wholly owned subsidiaries, instead of our VIE, our VIE in China and our
investors may face uncertainty about future actions by the government of China
that could significantly affect the VIE and our subsidiaries' financial
performance and operations, including the enforceability of the VIE Agreements.

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As of the date of this report, the corporate structure of the Company is illustrated as follows:





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Our mission is to become a leading provider for international education services, and providing total solutions for technology in education field, as well as providing corporation advisory management services.

Currently, through AEC New York, AEC Southern Shenzhen and Zhongwei, we provide four types of consulting services:

? Placement Advisory Services;

? Career Advisory Services;

? Student & Family Services; and

? Other Advisory Services.

Services to our clients are provided through the Company's principal executive office in New York, NY, and AEC Southern Shenzhen's office in Shenzhen, China.



Leveraging our knowledge of the educational system and environment in the U.S.
and our understanding of the market demand for education services in the PRC and
its changing business economy, we specialize in the delivery of customized high
school and college Placement Advisory Services as well as Career Advisory
Services to Chinese students wishing to study and gain post-graduate work
experience in the U.S. Our advisory services are specifically designed to
address the educational needs of the rising middle-class families in China. The
demand for our advisory services is primarily the result of China's decades-long
one-child policy, society's focus and emphasis on children's education, and
families' desire to gain access to U.S. colleges and universities as well as
work experience in the U.S.

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Headquartered in New York with operations in the PRC, the Company, during the quarter ended June 30, 2021 operated, and currently operates in two market segments:

AEC New York capitalizes on the rising demand from the middle-class families

in China for quality education in the U.S. It delivers customized high school

(1) and college placement and Career Advisory Services to Chinese students

wishing to study in the U.S. Its advisory services include language training,

college admission advisory, on-campus advisory, internship and start-up

advisory as well as student and family services.

AEC BVI, though AEC Southern Shenzhen and Zhongwei, delivers customized high

(2) school and college placement and Career Advisory Services to Chinese students

wishing to study in the U.S. through businesses referred by AEC New York to


     AEC Southern Shenzhen.


Placement Advisory Services

Our Placement Advisory Services include Language Training, Placement Advisory and Elite College Advisory services.



Since 1999, we have been delivering customized Language Training & Placement
Advisory Services to Chinese students. Our one-stop advisory services encompass
ESL training and assistance throughout the high school and college application
and admission process.

Our Language Training service is based on the existing ESL training platform
which provides language training for standard test preparation and is designed
to help improve student's English listening, speaking, reading, and writing
skills. Student customers will be able to take these training courses online
when our ESL online training platform goes live, which we expect to take place
by the end of 2021.

Targeting the needs of Chinese families in obtaining admission to Ivy League and
other prestigious universities in the U.S., our Elite College Advisory service
is designed to assist qualified Chinese students in applying to prestigious
colleges and universities in the U.S. Specifically, we arrange campus tours,
assist our student customers with their university applications, provide
tailored language training, offer guidance on interview and communication
techniques, and follow up on their applications.

Once our student customers are admitted into their target universities, our
Placement Advisory Services further extend to academic and cultural related
experiences including, among other things, providing assistance with applying
for a second major or minor, transferring to a different university, housing
accommodations, and applying for accelerated degrees. To help students optimize
their on-campus experience and train their leadership and social skills, we also
organize seminars and social events with our partner scholars and universities,
non-profit and for-profit business organizations. Additionally, to help enrich
their cultural experiences, we organize extracurricular and artistic activities
including dance, music, painting, photography, and other performance events.

For college application, we have designed the Key School Admissions program,
giving student customers closely guided application consulting services to gain
admission to top U.S. universities.

For on-campus academic counseling, we offer the Elite100 program that focuses on leadership and communication skills development for our student customers.



We provide placement services through both AEC New York and AEC BVI. AEC New
York refers business to AEC Southern Shenzhen when clients in the PRC need

local
support.

Career Advisory Services

Our Career Advisory Services include our Internship Advisory program and our Start-up Advisory program.


Our Internship Advisory program focuses on students' career development by
helping them identify and secure suitable internship and part-time or full-time
work opportunities that are appropriate for their educational background and
experience level. Through this program, we strive to help students map and
navigate their career path and counsel them on matters including academic
improvement to career assistance. Through this program, our student customers
are given opportunities to communicate with professionals in their field of
study and to participate in real-world case studies.

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Our Start-up Advisory program provides advisory services to individual students
and/or their families who want to start or make an investment in a business in
the U.S. Collaborating with our strategic partners, our services include
(i) recommending alternative business development opportunities; (ii) assistance
with business plan development; (iii) assistance with accounting and financial
management, marketing, product and project design; and (iv) assistance in
project financing.

Student & Family Advisory Services


Our Student & Family Advisory Services are designed to assist our students
and/or their families in the process of settling down in the U.S., so they can
effectively focus on their studies. We provide thorough services tailored to the
unique needs of each student family encountered in the U.S.

Through our business partners, we assist the students' families with purchasing
real estate properties, organizing their personal financial management and
investment needs, getting insurance and starting businesses. Our American Dream
program helps students' families find investment projects in the U.S. We also
advise corporate clients whose executives are moving to the U.S. for work. The
scope of our services includes assistance with business consulting, relocation
and other aspects of family support services. Services provided under this
program are customized and thorough, and tailored towards each family's unique
needs in the U.S.

Other Advisory Services


Through our Foreign Student Recruitment services, we assist universities in
China to recruit students from the U.S. We customize this service based on our
strategic relationship with college and universities in the U.S. and the
specific recruitment goals of these universities in China. The demand for our
recruitment services is driven mainly by the lack of an established channel to
attract students from the U.S. and the needs by the Chinese universities to
expand and diversify their student body.

Our Foreign Educator Placement services are designed to meet the increasing
demand for experienced educators and teachers from the U.S. to teach in China.
Such demand covers the need to recruit qualified US educators from Pre K-12 to
teach in China.

In order to respond to the adverse impact of the COVID-19 outbreak, we have
devoted time and effort to research and develop new services and products. For
the period ended June 30, 2021, through AEC Southern HK, we have assisted our
existing students, students' families, and corporate clients to obtain a health
product named Rocitin. On December 31, 2020, we entered into a Commission
Agreement with Clark Orient Company Limited ("Clark Orient"), pursuant to which
Clark Orient agrees to pay us RMB 10.00 on every bottle of Rocitin we sell
before March 31, 2021, and HKD 10.00 on every bottle of Rocitin we sell starting
from April 1, 2021. The Commission Agreement remains effective until either
party gives written notice of termination. As of June 30, 2021, revenue from
sales of Rocitin by AEC Southern HK was $8,617, approximately 11% of our total
revenue in the period ended June 30, 2021.

Impact of the COVID-19 Pandemic



In December 2019, a novel strain of coronavirus was reported to have surfaced in
Wuhan, China, which has and is continuing to spread throughout China and other
parts of the world, including the United States. The pandemic has forced
governments around the world to take drastic measures to halt the outbreak,
resulting in quarantines, stay-at-home requirements, travel restrictions,
temporary change of immigration policies and temporary closure of businesses and
facilities in China, the U.S., and throughout the world. A substantial part of
the Company's revenue and workforce are concentrated in China and in the U.S.
Additionally, all of our four lines of business rely upon the ability to travel
and the level of interest of our customers and prospective customers to study,
work and reside overseas, which has been significantly affected by the pandemic.
Consequently, we saw a significant decrease in requests for our services, which
has materially adversely affected the Company's business operations and its
financial condition and operating results for the six months ended June 30,
2021, and these negative impacts will likely continue through the rest of the
fiscal year 2021.

In order to respond to the COVID-19 outbreak, the Company has taken certain measures to our operations to ensure the safety of our staff, as well as to adjust to the reopening but potential surge of new cases. We have made work-from-home possible for our staff, so as to reduce congregation and possibility of transmission of the disease. We have identified an online platform related to education to diversify our means in generating revenue and are in still the process of negotiating a partnership or acquisition. In addition, we have been devoting time and effort to research and develop new services and products. As a result, we have been developing a new revenue resource by distributing health products through AEC Southern HK.



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The COVID-19 pandemic is rapidly evolving. The information in this Quarterly
Report on Form 10-Q is based on data currently available to us and will likely
change as the pandemic progresses. As of the date of this Quarterly Report on
Form 10-Q, some countries have slowly re-opened, but with surges of new cases
appearing, while the U.S. continues to see increasing new COVID-19 cases in
certain states. As COVID-19 persists throughout areas in which we operate and
the rest of the world, we believe the outbreak has the potential to continue to
have a material negative impact on our operating results and financial condition
going into the rest quarters of 2021. The extent of the impact of COVID-19 on
our operational and financial performance will depend on certain developments,
including the duration and spread of the outbreak, impact on our employees,
suppliers, student customers and other customers, and the impact on the
Company's ability to obtain debt and equity financing to fund business
activities, all of which are uncertain and cannot be predicted. Given these
uncertainties, at present, we cannot reasonably estimate the related impact to
our business, operating results and financial condition for the year ending
December 31, 2021.

Significant Accounting Policies



The discussion and analysis of our consolidated financial condition and results
of operations is based upon our unaudited consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States of America ("US GAAP"). The preparation of these
consolidated financial statements requires us to make estimates and judgments
that affect the reported amounts of assets and liabilities. On an on-going
basis, we evaluate our estimates including the allowance for doubtful accounts,
income taxes and contingencies. We base our estimates on historical experience
and on other assumptions that we believe to be reasonable under the
circumstances, the results of which form our basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions. The consolidated financial statements are comprised
of AEC Nevada and its wholly owned subsidiaries, AEC New York, and AEC BVI. All
significant intercompany accounts and transactions have been eliminated in
consolidation.

As part of the process of preparing our unaudited consolidated financial
statements, we are required to estimate our income taxes. This process involves
estimating our current tax exposure together with assessing temporary
differences resulting from differing treatment of items for tax and accounting
purposes. These differences result in deferred tax assets and liabilities. As of
June 30, 2021, the Company does not have a liability for any unrecognized tax
benefits.

We cannot predict what future laws and regulations might be passed that could
have a material effect on our results of operations. We assess the impact of
significant changes in laws and regulations on a regular basis and update the
assumptions and estimates used to prepare our unaudited consolidated financial
statements when we deem it necessary.

We have determined significant accounting principles with policies that involve
the most complex and subjective decisions or assessments. While our significant
accounting policies are more fully described in Note 2 to our financial
statements, we believe that the following accounting policies are the most
critical to aid you in fully understanding and evaluating this "Management's
Discussion and Analysis of Financial Condition and Results of Operations." Both
operating groups are reported under the same accounting policies/estimations.

Revenue is recognized when the following criteria are met: (1) when persuasive
evidence of an arrangement exists; (2) delivery of the services has occurred;
(3) the fee is fixed or determinable; and (4) collectability of the resulting
receivable is reasonably assured. AEC New York delivers customized high school
and college placement, career advisory as well as student and family services.
Fees related to such advisory services that are collected from individuals are
generally paid to the Company in advance and they are recorded as deferred
revenue. Revenues are recognized proportionally as services are rendered or upon
completion. Fees related to our advisory services provided by AEC New York to
corporate customers (such as staffing agencies and placement agencies) are
generally collected after services are provided, and are recorded as accounts
receivable.

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On January 1, 2019, the Company adopted Accounting Standards Update No. 2016-02,
Leases (Topic 842) (ASU 2016-02), as amended, which supersedes the lease
accounting guidance under Topic 840, and generally requires lessees to recognize
operating and financing lease liabilities and corresponding right-of-use (ROU)
assets on the balance sheet and to provide enhanced disclosures surrounding the
amount, timing and uncertainty of cash flows arising from leasing arrangements.
We first evaluate our leases to determine whether they are classified as a
finance lease or as an operating lease. A lease is a finance lease if any of the
following criteria are met: (a) ownership transfers, (b) the lease includes an
option to purchase the underlying asset, (c) the lease term is for the major
part of the remaining economic life of the underlying asset, (d) the present
value of the lease payments equals or exceeds the fair value of the underlying
asset, or (e) the underlying asset is of a specialized nature that is expected
to have no alternative use to the lessor at the end of the lease term. As such,
all of our leases are classified as operating leases. We then determine whether
the short-term exemption applies. The short-term exemption applies if the lease
term 12 months or less and does not include a purchase option whose exercise is
reasonably certain. If the short-term exemption applies then lease payments are
recognized as expense and no asset or liability is recorded. If the short-term
exemption does not apply, then we record an operating lease right-of-use asset
and a corresponding operating lease liability equal to the present value of the
lease payments. The ten-year commercial real estate lease we entered into in
December 2014 did not meet the short-term exemption and, accordingly, we
recorded the present value of the lease payments as a right-of-use asset and a
lease liability in the unaudited consolidated balance sheet. We recognize
expense on a straight-line basis over the life of the lease.

Recent Accounting Pronouncements



In January 2017, the FASB issued accounting standard update which simplifies the
test for goodwill impairment. To address concerns over the cost and complexity
of the two-step goodwill impairment test, the amendments in this update remove
the second step of the test. An entity will apply a one-step quantitative test
and record the amount of goodwill impairment as the excess of a reporting unit's
carrying amount over its fair value, not to exceed the total amount of goodwill
allocated to the reporting unit. The new guidance does not amend the optional
qualitative assessment of goodwill impairment. This update is effective for
annual or any interim goodwill impairment tests in fiscal years beginning after
December 15, 2019. Early adoption is permitted for interim or annual goodwill
impairment tests performed on testing dates after January 1, 2017. The Company
adopted the update in the fourth quarter of 2018. The adoption of the new
standard did not have an impact on our consolidated financial statements.

In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810):
Targeted Improvements to the Related Party Guidance for Variable Interest
Entities. ASU 2018-17 changes how entities evaluate decision-making fees under
the variable interest entity guidance. To determine whether decision-making fees
represent a variable interest, an entity considers indirect interests held
through related parties under common control on a proportional basis, rather
than in their entirety. This guidance will be adopted using a retrospective
approach and is effective for the Company on January 1, 2020. The Company has
evaluated the effect of the adoption of this ASU and the standard did not have
an impact on its consolidated financial statements and related disclosures from
the adoption of the new guidance.

In December 2019, the FASB issued ASU 2019-12 - Income Taxes (Topic 740):
Simplifying the Accounting for Income Taxes. This ASU provides an exception to
the general methodology for calculating income taxes in an interim period when a
year-to-date loss exceeds the anticipated loss for the year. This update also
(1) requires an entity to recognize a franchise tax (or similar tax) that is
partially based on income as an income-based tax and account for any incremental
amount incurred as a non-income-based tax, (2) requires an entity to evaluate
when a step-up in the tax basis of goodwill should be considered part of the
business combination in which goodwill was originally recognized for accounting
purposes and when it should be considered a separate transaction, and
(3) requires that an entity reflect the effect of an enacted change in tax laws
or rates in the annual effective tax rate computation in the interim period that
includes the enactment date. The Company adopted this ASU on January 1, 2021.
The adoption of the ASU did not have an impact on our consolidated financial
statements.

In March 2021, the FASB issued ASU 2021-03, Intangibles-Goodwill and Other
(Topic 350): Accounting Alternative for Evaluating Triggering Events. The
amendments in this Update are effective on a prospective basis for fiscal years
beginning after December 15, 2019. Early adoption is permitted for both interim
and annual financial statements that have not yet been issued or made available
for issuance as of March 30, 2021. An entity should not retroactively adopt the
amendments in this Update for interim financial statements already issued in the
year of adoption. The amendments in this Update also include an unconditional
one-time option for entities to adopt the alternative prospectively after its
effective date without assessing preferability under Topic 250, Accounting
Changes and Error Corrections.

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In May 2021, the FASB issued ASU 2021-4, Earnings Per Share (Topic 260),
Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock
Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity's Own
Equity (Subtopic 815-40): Issuer's Accounting for Certain Modifications or
Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of
the FASB Emerging Issues Task Force). The amendments in this Update are
effective for all entities for fiscal years beginning after December 15, 2021,
including interim periods within those fiscal years. An entity should apply the
amendments prospectively to modifications or exchanges occurring on or after the
effective date of the amendments. Early adoption is permitted for all entities,
including adoption in an interim period. If an entity elects to early adopt the
amendments in this Update in an interim period, the guidance should be applied
as of the beginning of the fiscal year that includes that interim period. The
FASB is issuing this Update to clarify and reduce diversity in an issuer's
accounting for modifications or exchanges of freestanding equity-classified
written call  options (for example, warrants) that remain equity classified
after modification or exchange.

In July 2021, the FASB issued ASU 2021-5, Leases (Topic 842): Lessors-Certain
Leases with Variable Lease Payments. The amendments in this Update amend Topic
842, which has different effective dates for public business entities and most
entities other than public business entities. The amendments are effective for
fiscal years beginning after December 15, 2021, for all entities, and interim
periods within those fiscal years for public business entities and interim
periods within fiscal years beginning after December 15, 2022, for all other
entities. The amendments in this Update address stakeholders' concerns by
amending the lease classification requirements for lessors to align them with
practice under Topic 840. Lessors should classify and account for a lease with
variable lease payments that do not depend on a reference index or a rate as an
operating lease if both of the following criteria are met: 1)The lease would
have been classified as a sales-type lease or a direct financing lease in
accordance with the classification criteria in paragraphs 842-10-25-2 through
25-3; 2)The lessor would have otherwise recognized a day-one loss.

The Company has assessed all newly issued accounting pronouncements released
during the six months ended June 30, 2021 and through the date of this filing
and believes none of them will have a material impact on the Company's financial
statements when or if adopted.

Results of Operations



Below we have included a discussion of our operating results and material
changes in the periods covered by this Quarterly Report on Form 10-Q. For
additional information on the potential risks associated with these initiatives
and our operations, please refer to the Risk Factors sections in our annual
report on Form 10-K for the year ended December 31, 2020, as filed on April 15,
2021. Our financial statements have been prepared assuming that we will continue
as a going concern. We expect we will require additional capital to meet our
long-term operating requirements. We expect to raise additional capital through,
among other things, additional funding from a shareholder of the Company, and
believe that will be sufficient to meet our anticipated needs for working
capital and satisfying our estimated liquidity needs 12 months from the date of
the financial statements.

The Three Months Ended June 30, 2021, as Compared to the Three Months Ended June
30, 2020




                                   For the three months ended June 30,
                                 2021        2020        Variance       %
Key revenue streams:
Placement Advisory Services    $ 58,512    $  41,484    $    17,208      41 %
Career Advisory Services          4,240      120,500      (116,260)    (96) %
Other Advisory Services             554            -            554      NM
Commission                          337            -            337      NM
Total revenues                 $ 63,643    $ 161,984    $  (98,341)    (61) %
Gross Profit                   $ 52,743    $ 106,267    $  (53,524)    (50) %
Gross Margin                         83 %         66 %




Revenue

Total revenues for the three months ended June 30, 2021, were $63,643,

representing a decrease of $98,341, or 61% from $161,984 for the same period in

2020. The decrease was mainly due to the COVID-19 pandemic, which negatively

impacted our services to current customers who were getting ready to study or

? work in the U.S., besides the seasonality factors related to the high

school/college admission process. The outbreak of COVID-19 in China since

January 2020, coupled with travels bans from China to the US prevented students


   from China from entering the U.S. These factors adversely impacted the
   financial performance of the Company.


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Total revenues for the three months ended June 30, 2021 were generated by the operations of AEC New York and AEC BVI, which deliver Placement Advisory Services, Career Advisory Services and Other Advisory Services to our clients.

Revenues for the three months ended June 30, 2021, from our Placement Advisory

Services were $58,512, representing an increase from the same period in 2020.

The increase in our Placement Advisory Services was due to the increase demands

from customers who would like to study overseas. For the three months ended

June 30, 2021, $4,240 revenues from our Career Advisory Services were

generated, representing an decrease from the same period in 2020. The decrease

? was due to the decreased requests resulting from negative impact of the

COVID-19 pandemic. . Revenues for the three months ended June 30, 2021 from

Other Advisory Services were $544, representing an increase from $0 for the

same period in 2020. The increase was from other local advisory requests from

one client. To reduce the severe impact of pandemic, we developed a new source

of revenue in the first quarter of 2021 by selling health products on a

commission basis. The revenue generated from commission were $337.




We expect the impact of COVID-19 on our business, especially on school
application and Career Advisory Services, will last until the end of this year,
due to restrictions on domestic and international travels, delay of the spring
semester and cancellation of overseas exams, as well as difficulty to obtain
valid visas. We will continually monitor the development of the epidemic as well
as the impact on our operations and financial performance and actively adjust
our operational strategies and make efforts on cost control and reducing
expenditures. We will also strive to expand our target market and provide
support of online study to our customers.

In addition, the Chinese government offers incentives and benefits though its

Talents Policy to Chinese students who return to China to work and live there.

This Talents Policy has encouraged many of our clients who recently graduated

or are about to graduate to go back to China, instead of staying in the U.S.,

which resulted in less service requests for our placement advisory and

student & family advisory services. Additionally, the decrease in the value of

? China's currency and the relatively restrictive U.S. policy on international

students is increasingly driving Chinese students to choose to apply to

universities and colleges in non-U.S. countries or choose to return to the PRC

after graduation, rather than staying in the U.S. To mitigate the effect of


   such recent changes, we are expanding our local services in the PRC,
   concentrating on new services promotion and increasing our mergers and
   acquisitions efforts by focusing on researching, identifying prospective
   targets, negotiating and executing on this strategy.

Gross Profit & Gross Margin

Our gross profit for the three months ended June 30, 2021 was $52,743,

? representing an decrease of $53,524 from $106,267 for the three months ended

June 30, 2020. The decrease can be attributed mainly to the net effect of a


   decline in service request and decreased cost by reducing outsourcing.

The following table summarizes changes in operating expenses and provision for income taxes for the periods presented:






                                                         For the three months ended June 30,
                                                     2021           2020         Variance        %
Operating expenses
Selling and marketing                             $         -    $    60,754    $  (60,754)    (100) %

Research and development expenses                          22              -             22       NM
General and administrative                            345,406        777,991      (432,585)     (56) %
Total operating expenses                          $   345,428    $   838,745    $ (493,317)     (59) %
Income tax benefit                                $  (38,347)    $ (199,530)    $   161,183     (81) %
Net (loss) from continuing operations
including non-controlling interest                $ (176,750)    $ (532,945)    $   356,195     (67) %




Operating Expenses

Total operating expenses decreased by $493,317 or 59% as compared to the three

? months ended June 30, 2020. The decrease mainly due to the decrease of the


   rent expense and professional expense.


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Income Tax Benefit

? Income tax benefit of $38,347 for the three months ended June 30, 2021

represents the net losses for the periods presented.

Net Loss

Net loss from operations including non-controlling interest was $176,750 for

? the three months ended June 30, 2021, as compared to the net loss of $532,945

for the three months ended June 30, 2020, which representing the net effect of

the decreased operation expenses and the decreased revenue.




The Six Months Ended June 30, 2021, as Compared to the Six Months Ended June 30,
2020




                                    For the six months ended June 30,
                                 2021        2020        Variance      %
Key revenue streams:
Placement Advisory Services    $ 62,151    $  41,484    $    20,667     50 %
Career Advisory Services          4,240      234,191      (229,951)   (98) %
Other Advisory                    1,945          507          1,438    284 %
Commission                        8,617            -          8,617     NM
Total revenues                 $ 76,953    $ 276,182    $ (199,229)   (72) %
Gross Profit                   $ 63,503    $ 110,128    $  (46,625)   (42) %
Gross Margin                         83 %         40 %




Revenue

Total revenues for the six months ended June 30, 2021, were $ 76,953,

representing a decrease of $199,229, or 72% from $276,182 for the same period

in 2020. The decrease was mainly due to the COVID-19 pandemic, which negatively

impacted our services to current customers who were getting ready to study or

? work in the U.S., besides the seasonality factors related to the high

school/college admission process. The outbreak of COVID-19 in China since

January 2020, coupled with travels bans from China to the US prevented students

from China from entering the U.S. These factors adversely impacted the

financial performance of the Company .

Total revenues for the six months ended June 30, 2021 were generated by the operations of AEC New York and AEC BVI, which deliver Placement Advisory Services, Career Advisory Services and Other Advisory Services to our clients.

Revenues for the six months ended June 30, 2021, from our Placement Advisory

Services increased by $20,667 from $41,484 for the same period in 2020. The

increase in our Placement Advisory Services was due to the increase demands

from our clients. Revenues for our Career Advisory Services decreased by

$229,951, or 98% from $234,191 for the same period in 2020, primarily due to

? the declined requests from clients because of COVID-19 related issues. Revenues

from Other Advisory Services increased by $1,438 from $507 for the same period

in 2020, due to some incidental requests from local customers. To reduce the

severe impact of pandemic, we developed a new source of revenue in the first

quarter of 2021 by selling health products on a commission basis. The revenue

generated from commission were $8,617.




We expect the impact of COVID-19 on our business, especially on school
application and Career Advisory Services, will last until the end of this year,
due to restrictions on domestic and international travels, delay of the spring
semester and cancellation of overseas exams, as well as difficulty to obtain
valid visas. We will continually monitor the development of the epidemic as well
as the impact on our operations and financial performance and actively adjust
our operational strategies and make efforts on cost control and reducing
expenditures. We will also strive to expand our target market and provide
support of online study to our customers.

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In addition, the Chinese government offers incentives and benefits though its

Talents Policy to Chinese students who return to China to work and live there.

This Talents Policy has encouraged many of our clients who recently graduated

or are about to graduate to go back to China, instead of staying in the U.S.,

which resulted in less service requests for our placement advisory and student

& family advisory services. Additionally, the decrease in the value of China's

? currency and the relatively restrictive U.S. policy on international students

is increasingly driving Chinese students to choose to apply to universities and

colleges in non-U.S. countries or choose to return to the PRC after graduation,

rather than staying in the U.S. To mitigate the effect of such recent changes,

we are expanding our local services in the PRC, concentrating on new services

promotion and increasing our mergers and acquisitions efforts by focusing on

researching, identifying prospective targets, negotiating and executing on this


   strategy.


Gross Profit & Gross Margin

Our gross profit for the six months ended June 30, 2021 was $63,503

? representing a decrease of $46,625 from $110,128 for the six months ended June

30, 2020. The decrease can be attributed mainly to the net effect of a decline

in service request and decreased cost by reducing outsourcing.

? Our gross margin was approximately 83% for the six months ended June 30, 2021,

compared to approximately 40% for the same period in 2020.

The following table summarizes changes in operating expenses and provision for income taxes for the periods presented:






                                                          For the six months ended June 30,
                                                     2021           2020         Variance       %
Operating expenses
Selling and marketing                             $         -   $      74,115   $  (74,115)   (100) %

Research and development expenses                      12,242               -        12,242      NM
General and administrative                            706,803       1,425,116     (718,313)    (50) %
Total operating expenses                          $   719,405   $   1,499,231   $ (779,826)    (52) %
Income tax benefit                                $ (100,399)   $   (362,153)   $   261,754    (72) %
Net (loss) from continuing operations
including noncontrolling interest                 $ (477,555)   $ (1,026,633)   $   549,078    (53) %




Operating Expenses

Total operating expenses decreased by $779,826 or 52% as compared to the six

? months ended June 30, 2020. The decrease mainly represents the net effect of

the decrease of the marketing expense and professional fee, and the increase of

the research and development expenses.

Income Tax Benefit

Income tax benefit of $100,399 for the six months ended June 30, 2021

? represents the net effect of the tax payable and net losses for the periods


   presented.


Net Loss

Net loss from continuing operations including non-controlling interest was

? $477,555 for the six months ended June 30, 2021, as compared to the net loss of

$1,026,633 for the six months ended June 30, 2020, which representing the net


   effect of the decreased operation expenses and revenue.


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Liquidity and Capital Resources

Cash Flows and Working Capital

As of June 30, 2021, we had cash of $541,844, a decrease of $369,814 from $911,658 as of December 31, 2020. We have financed our operations primarily through cash flow from operating activities. We require cash for working capital, payment of accounts payables and accrued expenses, salaries, commissions and related benefits, and other operating expenses and income taxes. The following table sets forth a summary of our cash flows for the periods indicated.






                                                              Six Months ended June 30,
                                                     2021           2020         Variance        %
Net cash (used in) operating activities           $ (217,696)    $ (533,490)    $   315,794     (59) %
Net cash (used in) investing activities                 (734)              -          (734)       NM
Net cash (used in) financing activities           $ (154,880)    $   421,236      (576,116)    (137) %
Effect of exchange rates changes on cash                3,496          (574)          4,070    (709)
Net change in cash                                $ (369,814)    $ (112,828)    $ (256,986)      228 %

Cash Flow from Operating Activities

Net cash used in operating activities for the six months ended June 30, 2021

was $217,696, decreased by $315,794 for the six months ended June 30, 2020. The

? decrease in net cash used in operations in the six months ended June 30, 2021

was primarily attributable to slowing decreased operating expense and down

payment to our service providers.

Cash Flow from Investing Activities

? Net cash used in investing activities during the six months ended June 30, 2021


   was $734, increased by $734 for the six months ended June 30, 2020 .

Cash Flow from Financing Activities

? Net cash used in financing activities for the six months ended June 30, 2021

was $154,880, representing repayment of short-term loan.

Working Capital



The following table sets forth our working capital from continuing operations:




                                               June 30,       December 31,
                                                 2021             2020           Variance        %
Total current assets from continuing
operations                                   $     783,327    $   1,266,151    $  (482,824)      (38) %
Total current liabilities from continuing
operations                                       2,835,922        3,579,624       (743,702)      (21)
Working capital                              $ (2,052,595)    $ (2,313,473)    $    260,878      (11) %
Current ratio                                         0.28             0.35

As of June 30, 2021, we had a working capital deficiency of $2,052,595, an

? increase of $260,878 from a working capital deficiency of $2,313,473 as of

December 31, 2020. The increase in working capital represents the net effect of

decreased liabilities.

We believe that our working capital will be sufficient to enable us to meet our

? cash requirements for the next 12 months. We believe we have adequate working


   capital to fund future growth activities.


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Going Concern

The independent auditors' report accompanying our June 30, 2021 financial
statements contained an explanatory paragraph expressing substantial doubt about
our ability to continue as a going concern. The financial statements have been
prepared "assuming that we will continue as a going concern," which contemplates
that we will realize our assets and satisfy our liabilities and commitments in
the ordinary course of business.

Additionally, we expect that the COVID-19 pandemic will continue to have
material and adverse impacts on our cash flow for the three months ending
September 30, 2021 with potential continuing impacts on subsequent periods. As
such, we expect we will require additional capital to meet our long-term
operating requirements. We expect to raise additional capital through, among
other things, additional funding from a shareholder of the Company, and believe
that will be sufficient to meet our anticipated needs for working capital and
satisfying our estimated liquidity needs 12 months from the date of the
financial statements.

Off-Balance Sheet Arrangements

We did not have, during the period presented, and we are currently not party to, any off-balance sheet arrangements.

Seasonality



We experience seasonality in business with students as customers, specifically
our placement advisory, career advisory and student and family services, all
related to the business of AEC New York. The seasonality reflects the general
trend of the industry of admissions and education related services,
corresponding to the predominantly fall semester start dates of educational
institutions admissions. Our services are higher in the fourth and first
quarters of our fiscal year than the other two quarters, reflecting the
engagement for services of educational institutions admissions predominantly
occurring in the fourth quarter and first quarter of a calendar year, and other
consulting services corresponding to the beginning of academic year, i.e. the
fall semester.

Subsequent Events

The Company's management has performed subsequent events procedures through the date the financial statements were available to be issued. There were no subsequent events requiring adjustment to or disclosure in the consolidated financial.

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