China Education Resources Inc.
TSX VENTURE : CHN
PINK SHEETS : CHNUF

China Education Resources Inc.

May 06, 2008 14:21 ET

China Education Resources Announces Fiscal 2007 Annual Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 6, 2008) - China Education Resources Inc. ("CER," the "Company") (TSX VENTURE:CHN)(PINK SHEETS:CHNUF) today reported its financial results for the fourth quarter and twelve months ended December 31, 2007. During the year, sales and subsequent revenues shifted from the Company's traditional textbook business to online education services. The Company has completed the redirection of its efforts and resources to its online education offerings; China Education Resources and Services Platform (CERSP) www.cersp.com and 36 sub portals, including Education Services Portal (ESP).

For the year ended December 31, 2007, the Company reported aggregate sales of $1,439,637 (2006: $1,435,581). Sales revenue of $998,810 (2006: $nil) was attributable to revenue derived from teacher training service through the internet portal and $440,827 (2006: $1,435,581) was from the Company's traditional business, book selling, with related cost of sales of $240,694 (2006: $752,619).

Selling and general and administrative expenses

For the year ended December 31, 2007 selling and general and administrative expenses were $2,991,103 compared to $2,295,767 recorded in 2006 and reflect an increase in activities related to the internet portal and working to complete a registration statement in the US.

Web-site operating costs

The Company recorded web-site operating costs of $1,641,093 for maintenance and updating of the portal and web-sites.

Products - Operations

The goal of CER is to position CERSP.com as China's central on-line location for the K-12 education sector (students, teachers, parents, schools, government and administrators). These education users can access, discover, learn, socialize, create and share new curriculum materials. CERSP is an advanced learning, working and sharing platform that offers China's teachers, students, administrators, and parents a wide range of services and products.

CER's vision is to take the world's largest education system into the twenty-first century and make CERSP.com the world's largest on-line community. The Company currently is focused on the marketing, sales and continuing development of its educational internet portal. The portal features online teacher training programs, a student social network (which will include online tutoring and training programs), and supplemental materials and textbooks.

Teacher Training

To gain rapid adoption of China's new curriculum and the internet portal system, CER and the CDC initially focused on the development and on-line training of the new curriculum for teachers. The portal now contains hundreds of thousands of pages of new curriculum covering all key subjects. In collaboration with the CDC, CER completed 25 online government certificate courses aimed at the primary, middle school, and high school teachers.

Teacher training beta tests were completed in January 2007 and in August 2007 the CDC again adopted the CERSP portal in training 47,000 teachers for the new curriculum certificate program, which was the largest on-line training program ever done in China. The program consists of 25 courses, 14 of them were newly developed, and is divided into two modules. One module covers teachers from kindergarten to grade 9 and the second module covers the high school level teachers from grades 10-12.

The teacher-training program is one of the sources of revenue of the portal and CER believes that it will be able to capture a sizeable percentage of this $1.3 billion annual training market. China's 12,000,000 teachers not only have to be trained to teach the new curriculum but must participate in continuing education to maintain their teaching certification. Currently the portal's capacity is 500,000 simultaneous participants and CER is now working towards a capacity of over one million simultaneous users.

Education Service Portal

In April 2008, the Company launched its beta version of comprehensive Education Services Portal ("ESP"). ESP is a natural extension of the CER education portal, CERSP, and helps to organize the wealth of teaching, learning, and administrative resources available through CERSP at the individual and school levels.

The school administrators, teachers, students and parents can use ESP to upload and download education resources according to specific learning objectives. It enables teachers to communicate and work collaboratively with each other by providing them with the ability to share and exchange lesson plans, support materials, experiences, and even entire course modules. Students can use the Student Activity Center ("the Center"), to collaborate, work jointly on school projects, share learning experiences and even play educational games.

The ESP Testing and Assessment Center ("TAC"), enables schools to create and administer tests and assessments that align with learning objectives and automatically reports raw data results and various analyses that can be used to identify areas in which the student may need extra help and recommend learning strategies. The TAC provides a repository for education E-portfolios, which are complete records of each student's learning and achievements.

The Student Activity Center provides an informal environment where students can gather online to visit with each other, find relaxing, education-related activities, and to play learning games using points they earn from their educational achievements. The Center also features a customized, unique education resource search function.

OUTLOOK

The Company is preparing its online based teacher training program via CERSP and commercialization of its new ESP. In addition, CER is cooperating with California State University Monterey Bay ("CSUMB") Extended Education and International Programs ("EEIP") to implement a Chinese Mandarin web training program, which targets students in the United States and a commercial online English-as-a-second-language ("ESL") program available in China. The Company is also looking into the commercialization opportunities for on-line advertisement on its education portals and the provision of on-line student tutorial services. The Company expects that it can achieve a breakeven bottom line for the current financial year if the progress of the above matters is in accordance with the plan of management.

ABOUT CHINA EDUCATION RESOURCES INC.

In collaboration with China's Ministry of Education Curriculum Development Center, China Education Resources Inc. (CER) is helping to transform the curriculum of the world's largest educational system. Recognizing the need for centralization and increased accessibility to address the Chinese Central government's 2000 education reform policy changes, China Education Resources Inc. has created educational tools and curricula for China's entire kindergarten through twelfth grade system. By implementing the government's goal of converting the existing educational system from memory-based learning to creative thinking and utilizing a more interactive approach to embrace a world-based economy, CER has played an integral part in positioning China's educational system to reach new heights.

Safe Harbor Statement

This press release contains certain forward-looking statements that reflect the current views and/or expectations of China Education Resources Inc. with respect to its performance, business and future events. Such statements are subject to a number of risks, uncertainties and assumptions. Actual results and events may vary significantly.

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The TSX Venture Exchange has not reviewed, and does not accept, responsibility for the adequacy or accuracy of the contents of this press release.

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