Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Limited operating history with current business model.
• Inability to attract and retain students.
• Maintaining and enhancing brand recognition.
• Conducting cost-effective sales and marketing.
• Engaging, training, and retaining qualified teachers.
• Significant competition in the market.
• Executing growth strategies successfully.
• Developing and introducing new courses.
• Addressing risks related to new courses.
• Protecting against network interruptions, security breaches, and system failures.
• Higher labor costs, inflation, and stricter labor laws.
• Student attrition.
• Protecting intellectual property rights.
• Protecting confidential information of teachers and students.
• Territorial disputes between China and the Philippines.
• Misconduct and misuse of the platform by students and teachers.
• Employee misconduct.
• Allegations, harassment, or other detrimental conduct by third parties.
• Achieving benefits from acquisitions.
• Use of unregistered business premises.
• Renewing current leases or locating alternative facilities.
• Risks related to payment methods.
• Effective collaboration of senior management.
• Currency fluctuations.
• Regional political and economic risks.
• Seasonal fluctuations.
• Share-based compensation expenses.
• Limited insurance coverage.
• Implementing and maintaining effective internal controls.
• Lack of PCAOB inspections of auditors in China.
• Risks related to natural and other disasters.
• Non-compliance with contractual arrangements for ICP license.
• Ineffectiveness of contractual arrangements.
• Conflicts of interest with Dasheng Zhixing shareholders.
• Limitations on PRC subsidiary's ability to make payments.
• Scrutiny of contractual arrangements by PRC tax authorities.
• Potential liquidation of Dasheng Zhixing.
• Uncertainties in the interpretation and enforcement of PRC laws.
• Complexity and changes in PRC regulation of internet-related businesses.
• Control over website through contractual arrangements.
• Inadequate contributions to employee benefit plans.
• Enforcement of PRC Labor Contract Law.
• Regulation and censorship of information on the internet.
• Operation of Dasheng Zhixing beyond authorized business scope.
• Licensing requirements for internet audio-video programs.
• Obtaining and maintaining operating licenses and permits.
• Changes in China's economic, political, or social conditions.
• PRC regulations on foreign exchange registration.
• Restrictions on using proceeds of equity offerings.
• Classification as a PRC resident enterprise.
• Scrutiny of acquisition transactions by PRC tax authorities.
• Registration requirements for employee share ownership plans.
• Restrictions on paying dividends.
• Governmental control of currency conversion.
• Complex procedures for acquisitions of Chinese companies.
• Fluctuations in exchange rates.
• Volatility in ADS trading prices.
• Analyst reports and ratings.
• Dual-class share structure.
• Sales of substantial amounts of ADSs.
• Passive foreign investment company (PFIC) classification.
• Difficulties in protecting shareholder interests.
• Limitations on transfer of ADSs.
• Increased costs as a public company.
• Potential securities class action lawsuits.

Mitigation Strategies

• Measures to remedy material weakness and control deficiencies.
• Outsourcing of marketing and sales functions.
• Development of in-house audio and video technologies.
• Implementation of security policies and measures.
• Close monitoring of Dasheng Zhixing's operations and finances.
• Implementation of control procedures to prevent teacher and student misconduct.
• Internal investigations into allegations of misconduct.
• Corrective measures for posting video clips without required licenses.
• Ongoing teacher training and development.
• Engagement of student service personnel and provision of training.
• Various marketing and branding activities.
• Internal reorganizations.
• Compliance with industry standards and privacy policies.
• Engagement of valuation specialists for fair value determination.
• Annual impairment assessment on goodwill.
• Periodic reviews of depreciation and amortization rates.
• Use of binomial option pricing model for share-based compensation.
• Retrospective valuations of ordinary shares.
• Completion of foreign exchange registrations.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Attracting and retaining students
• Maintaining and enhancing brand recognition
• Conducting cost-effective sales and marketing
• Significant competition
• Engaging, training, and retaining qualified teachers
• Executing growth strategies
• Developing and introducing new courses
• Adapting to technological changes
• Addressing risks related to new courses
• Protecting against network interruptions, security breaches, and system failures
• Higher labor costs, inflation, and stricter labor laws
• Territorial disputes between China and the Philippines
• Students' and teachers' misconduct
• Employees' misconduct
• Allegations, harassment, or other detrimental conduct by third parties
• Achieving benefits from acquisitions
• Use of unregistered business premises
• Renewing leases
• Payment processing risks
• Effective collaboration of senior management
• Currency fluctuations
• Regional political and economic risks
• Seasonal fluctuations
• Share-based compensation expenses
• Limited insurance coverage
• Implementing and maintaining effective internal controls
• Lack of PCAOB inspections in China
• Natural and other disasters
• Compliance with contractual arrangements for ICP license
• Effectiveness of contractual arrangements
• Newly enacted Foreign Investment Law of the PRC
• Performance of contractual arrangements
• Custodians' or authorized users' failure to fulfill responsibilities
• Potential conflicts of interest
• PRC subsidiaries' ability to make payments
• Scrutiny by PRC tax authorities
• Bankruptcy or liquidation of VIEs
• Uncertainties in the interpretation and enforcement of PRC laws
• Complexity, uncertainties, and changes in PRC regulation on Online Education
• Complexity, uncertainties, and changes in PRC regulation of internet-related business
• PRC regulation on after-school tutoring
• Employee benefit plan contributions
• Enforcement of PRC Labor Contract Law
• Regulation and censorship of information
• Operation of VIEs beyond authorized business scope
• Licensing requirement for Internet audio-video programs
• Operating licenses and permits
• Changes in China’s economic, political, or social conditions
• Economic downturn
• PRC regulations on foreign exchange
• Loans to and direct investment in PRC entities
• PRC Enterprise Income Tax Law classification
• Enhanced scrutiny over acquisition transactions
• Registration requirements for employee share ownership plans
• Restrictions on paying dividends
• Governmental control of currency conversion
• M&A Rules
• Exchange rate fluctuations
• Hedging options
• Fluctuation in ADS prices
• Dual-class share structure
• Sale of ADSs
• Passive foreign investment company (PFIC) classification
• Difficulties in protecting shareholder interests
• Limited ability to protect rights through U.S. courts
• Limited voting rights of ADS holders
• Reduced reporting requirements as an emerging growth company
• Costs of being a public company
• Securities class action lawsuits

Mitigation Strategies

• Investing in branding and marketing
• Improving online and mobile platforms
• Engaging Wang Junkai as brand ambassador
• Refining brand focus
• Outsourcing marketing and sales functions
• Improving operational efficiency
• Refining marketing and branding approaches
• Increasing operating margin
• Investing in branding and marketing activities
• Improving online and mobile platforms
• Improving data analytics capabilities
• Implementing control procedures
• Engaging and training teachers
• Providing competitive pay and benefits
• Developing new course contents and lesson formats
• Implementing security policies and measures
• Complying with industry standards and privacy policies
• Improving technology infrastructure and computer systems
• Passing increased labor costs to students
• Improving utilization of staff
• Engaging, training, and retaining qualified personnel in the Philippines
• Monitoring operations and finances of VIEs
• Providing financial support to VIEs
• Exercising purchase option
• Enforcing contractual arrangements
• Improving budgetary and internal controls
• Taking corporate or legal action
• Exercising purchase option
• Resolving conflicts of interest
• Monitoring operations and finances of VIEs
• Closely monitoring the operations and finances of Dasheng Zhixing and Dasheng Helloworld
• Implementing measures to remedy deficiencies in internal control
• Taking measures to remedy deficiencies
• Engaging in hedging transactions
• Complying with reporting obligations
• Improving internal control over financial reporting

Supply Chain Management

Climate-Related Risks & Opportunities