GSX Answers Frequently Asked Questions on its Annual Report for Fiscal Year 2019
BEIJING, April 6, 2020 /PRNewswire/ -- GSX Techedu Inc. (NYSE: GSX) ("GSX" or the "Company"), a leading online K-12 large-class after-school tutoring service provider in China, today provided answers to frequently asked questions on its annual report on Form 20-F for fiscal year 2019 filed with the SEC on April 3, 2020.
Q. Is the audit opinion letter issued by Deloitte Touche Tohmatsu Certified Public Accountants LLP a standard, unqualified audit opinion letter?
A. Yes. As stated in the audit opinion letter signed by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.
Q. Why is it that the audit opinion letter issued by Deloitte Touche Tohmatsu Certified Public Accountants LLP does not include any opinion on the effectiveness of internal control over financial reporting?
A. As the Company was listed on NYSE and became a SEC reporting company in June 2019, it will not be eligible for being a large accelerated filer nor an accelerated filer until one year after it becomes a SEC reporting company, as each such term is defined under the U.S. securities law. Consequently, pursuant to Section 404(c) of the Sarbanes-Oxley Act of 2002, the Company is exempt from the registered public accounting firm attestation and reporting requirement on the internal control over financial reporting of the Company. Such exemption is commonly relied upon by newly listed first-time issuers in their first annual reports after the IPO.
Q. When does the Company plan to conduct SOX 404 internal control audit?
A. The Company has begun to prepare for the SOX 404 internal control audit. The Company expects to include in its annual report on Form 20-F for fiscal year 2020, to be filed in 2021, an attestation and report from its registered public accounting firm on the internal control over financial reporting of the Company.
Q. Compared with the prospectus used in the registered follow-on offering in November 2019, why does the list of major shareholders in the annual report seem to be much shorter?
A. In the annual report, the Company is only required to identify shareholders that are the beneficial owners of 5% or more of each class of the Company's voting securities as of the most recent practicable date.
In the registered follow-on offering prospectus, all selling shareholders in the offering, regardless of their shareholding percentage in the Company, were listed in the Principal and Selling Shareholders section of the prospectus, and the shareholders owning less than 5% of the Company were listed because they were selling shareholders in the offering.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. GSX may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Further information regarding these and other risks is included in the Company's reports filed with, or furnished to the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of this press release, and GSX undertakes no duty to update such information or any forward-looking statement, except as required under applicable law.
GSX is a technology-driven education company and leading online K-12 large-class after-school tutoring service provider in China. GSX offers K-12 courses covering all primary and secondary grades as well as foreign language, professional and interest courses. GSX adopts an online live large-class format to deliver its courses, which the Company believes is the most effective and scalable model to disseminate scarce high-quality teaching resources to aspiring students in China. Big data analytics permeates each aspect of the Company's business and facilitates the application of the latest technology to improve teaching delivery, student learning experience, and operational efficiency.
For further information, please contact:
GSX Techedu Inc.
Ms. Sandy Qin, CFA
Mr. Christian Arnell
Ms. Linda Bergkamp
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