Sunlands Provides Update on its Status under the Holding Foreign Companies Accountable Act

Rhea-AI Summary

Sunlands Technology Group (NYSE: STG) announced on May 4, 2022, that it has been provisionally listed as a "Commission-Identified Issuer" under the Holding Foreign Companies Accountable Act. This follows the SEC's review of the Company's annual report for the fiscal year ended December 31, 2021, submitted on April 27, 2022. The listing indicates that its auditor's working papers are not fully inspectable by the PCAOB. Sunlands is actively monitoring this situation to protect shareholder interests while complying with regulations in both China and the U.S.

Positive

• Company is actively monitoring situation to protect shareholder interests.
• Continues to comply with laws and regulations in both China and the U.S.

Negative

• Provisionally listed as a "Commission-Identified Issuer" under HFCAA due to auditor issues.
• SEC may prohibit trading on U.S. exchanges if issues persist for three consecutive years.

BEIJING, May 5, 2022 /PRNewswire/ -- Sunlands Technology Group (NYSE: STG) ("Sunlands" or the "Company"), a leader in China's online post-secondary and professional education, today announced that that on May 4, 2022, the Securities and Exchange Commission (the "SEC") provisionally listed the Company as a "Commission-Identified Issuer" under the Holding Foreign Companies Accountable Act of the United States (the "HFCAA").

This identification was expected by the Company as a routine application procedure following the Company's filing of its annual report on Form 20-F for the fiscal year ended December 31, 2021 on April 27, 2022. This identification indicates that the SEC has determined the Company used an auditor whose working paper cannot be inspected or investigated completely by the Public Company Accounting Oversight Board of the United States (the "PCAOB") to issue the audit opinion for the Company's financial statements for the fiscal year ended December 31, 2021. The HFCAA requires the SEC to prohibit the securities of a "Commission-Identified Issuer" from being traded on any of the U.S. securities exchanges if the auditor of the covered issuer's financial statements is not subject to inspection by the PCAOB for three consecutive years, beginning in 2021.

Sunlands will continue to monitor developments and has been proactively exploring available options to protect the interest of its shareholders. Sunlands will continue to comply with applicable laws and regulations in both China and the United States, and strive to maintain its listing status on the New York Stock Exchange.

About Sunlands

Sunlands Technology Group (NYSE: STG) ("Sunlands" or the "Company"), formerly known as Sunlands Online Education Group, is the leader in China's online post-secondary and professional education. With a one to many, live streaming platform, Sunlands offers various degree and diploma-oriented post-secondary courses as well as online professional courses and educational content, to help students prepare for professional certification exams and attain professional skills. Students can access its services either through PC or mobile applications. The Company's online platform cultivates a personalized, interactive learning environment by featuring a virtual learning community and a vast library of educational content offerings that adapt to the learning habits of its students. Sunlands offers a unique approach to education research and development that organizes subject content into Learning Outcome Trees, the Company's proprietary knowledge management system. Sunlands has a deep understanding of the educational needs of its prospective students and offers solutions that help them achieve their goals.

Safe Harbor Statement

This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and 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," "confident" and similar statements. Sunlands 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 report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about Sunlands' beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: Sunlands' goals and strategies; its expectations regarding demand for and market acceptance of its brand and services; its ability to retain and increase student enrollments; its ability to offer new courses and educational content; its ability to improve teaching quality and students' learning results; its ability to improve sales and marketing efficiency and effectiveness; its ability to engage, train and retain new faculty members; its future business development, results of operations and financial condition; its ability to maintain and improve technology infrastructure necessary to operate its business; competition in the online education industry in China; relevant government policies and regulations relating to Sunlands' corporate structure, business and industry; and general economic and business condition in China Further information regarding these and other risks, uncertainties or factors is included in the Sunlands' filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and Sunlands does not undertake any obligation to update such information, except as required under applicable law.

For further information, please contact:

Sunlands Technology Group
Investor Relations
Email: sl-ir@sunlands.com

The Piacente Group, Inc.
Brandi Piacente
Tel: +1-212-481-2050
Email: sunlands@tpg-ir.com

Yang Song
Tel: +86-10-6508-0677
Email: sunlands@tpg-ir.com

 

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SOURCE Sunlands Technology Group

FAQ

What does it mean that Sunlands Technology Group is a "Commission-Identified Issuer" under HFCAA?

It indicates that the SEC has identified Sunlands due to its auditor's working papers not being fully inspectable by the PCAOB, which could affect trading in the U.S.

When was Sunlands Technology Group identified as a "Commission-Identified Issuer"?

The identification was made on May 4, 2022.

What actions is Sunlands taking in response to the SEC's identification?

Sunlands is monitoring the situation and exploring options to protect shareholder interests while adhering to relevant laws and regulations.

What could happen if Sunlands' auditor's issues are not resolved?

If unresolved for three consecutive years, the SEC could prohibit Sunlands' securities from being traded on U.S. exchanges.

What is the significance of the annual report filed by Sunlands on April 27, 2022?

The report is linked to the SEC's decision to identify the Company as a "Commission-Identified Issuer" under the HFCAA.