OFFCN EDUCATION TECHNOLOGY CO., LTD. First Quarter 2021 Report Stock Code: 002607 Stock Abbr.: OFFCN EDU April, 2021 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Chapter I. Important Information The Company ’ s Board of Directors, Supervisory Committee, directors, supervisors, and senior management hereby guarantee that the contents of the annual report are true, accurate, and complete, and that there are no misrepresentations, misleading statements, or material omissions, and shall assume individual and joint legal liabilities. This report is prepared and published in Chinese version, and the English version is for reference only. Should there be any inconsistency between the Chinese version and English version, the Chinese version shall prevail. All directors attended the board meeting for reviewing this quarterly report. Wang Zhendong, the Company ’s legal representative, Shi Lei, the responsible person in charge of accounting work, and Luo Xue, the person in charge of the accounting department, hereby declare that the financial report in this quarterly report is authentic, accurate and complete. 2 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Chapter II. General Information of the Company Section I. Key accounting information and financial indicators Whether the Company needs to adjust its financial information retrospectively or restate its previous year accounting information □ Yes √ No Increase/Decrease in the Current reporting Same period of the current reporting period over period previous year the same period of the previous year Operating income (RMB) 2,051,691,383.47 1,230,102,270.48 66.79% Net profit attributable to shareholders 140,729,639.84 116,303,799.91 21.00% of the listed Company (RMB) Net profit after deducting non-recurring profits and losses attributable to 92,213,329.43 77,685,654.82 18.70% shareholders of the listed Company (RMB) Net cash flow from operating -246,724,873.67 2,564,218,312.85 -109.62% activities (RMB) Basic earnings per share (RMB/share) 0.02 0.02 0.00% Diluted earnings per share 0.02 0.02 0.00% (RMB/share) Weighted average return on net assets 3.24% 3.33% -0.09% Increase/Decrease at the end End of the current End of the previous of this reporting period over reporting period year the end of the previous year Total assets (RMB) 15,995,461,567.61 14,418,850,027.27 10.93% Total net assets attributable to shareholders of the listed Company 4,415,857,433.04 4,275,127,793.20 3.29% (RMB) Items with non-recurring gains or losses and the amounts √ Applicable □ Not applicable Unit: RMB Amount from the Items Description beginning of the year to the 3 Offcn Education Technology Co., Ltd. First Quarter 2021 Report end of the reporting period Profits or losses on disposal of non-current assets (including 56,256.12 offsetting amount for the provision of impairment of assets) Government subsidies included in the current profits and losses (except for government subsidies closely related to the business of 1,006,121.68 the enterprise that are fixed or quantified in accordance with national unified standards) Profits or losses from entrusting others to invest or manage assets 10,983,589.09 Other non-operating income and expenses except for the items -69,002.90 above Other profits or losses items that meet the definition of 45,101,048.40 non-recurring profits and losses Less: Impact on income tax 8,561,701.98 Total 48,516,310.41 -- Provide explanations for classifying items of non-recurring profits or losses defined or listed in the Explanatory Announcement No. 1 for Information Disclosures of the Company Issuing Securities Publicly — Non-recurring Profits and Losses as items of recurring profits or losses. □ Applicable √ Not applicable The Company has not classified non-recurring profits or losses items defined or listed in the Explanatory Announcement No. 1 for Information Disclosures of the Company Issuing Securities Publicly — Non-recurring profits and losses as recurring profit or loss items in the reporting period. Section II. Tables on the total number of shareholders and shares held by the top 10 shareholders at the end of the reporting period 1. Table on the total number of common shareholders, preferred shareholders with restored voting rights and shares held by the top 10 shareholders Unit: share(s) Total number of preferred Total number of common shareholders at shareholders with restored 57,045 0 the end of the reporting period voting rights at the end of the reporting period (if any) Particulars about shares held by the top 10 shareholders Number of Pledged or frozen Name of Nature of Shareholding Number of shares held Status of Number of shareholders shareholders ratio (%) shares held with sales shares shares restrictions Domestic Lu Zhongfang 41.36% 2,550,549,260 2,550,549,260 Pledged 450,000,000 natural person 4 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Domestic Li Yongxin 18.35% 1,131,415,121 1,095,063,560 Pledged 459,846,561 natural person Domestic Wang Zhendong 15.61% 962,471,418 721,853,563 Pledged 245,589,966 natural person Beijing Aerospace Domestic Industry non-state-owned 4.25% 261,960,371 0 Investment legal person Fund (Limited Partnership) Hong Kong Securities Overseas legal 2.27% 140,112,381 0 Clearing person Co., Ltd. Beijing Kerui Technology Innovation Domestic Investment non-state-owned 1.44% 89,117,723 89,117,723 Center legal person (Limited Partnership) Beijing Offcn Future Information Domestic Consulting non-state-owned 1.30% 80,000,000 0 Center legal person (Limited Partnership) Domestic Zhou Xiayun 1.28% 78,848,640 0 Pledged 48,500,000 natural person Domestic Zhun Hui 1.17% 72,277,920 0 Pledged 11,050,000 natural person Beijing Guangyin Domestic Venture Capital non-state-owned 1.12% 68,848,230 0 Center legal person (Limited Partnership) 5 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Particulars about shares held by the top 10 shareholders without sales restrictions Type of shares Name of shareholders Number of shares without sales restrictions held Number of Type of shares shares Beijing Aerospace Industry Investment RMB common 261,960,371 261,960,371 Fund (Limited Partnership) shares RMB common Wang Zhendong 240,617,855 240,617,855 shares RMB common Hong Kong Securities Clearing Co., Ltd. 140,112,381 140,112,381 shares Beijing Offcn Future Information RMB common Consulting Center 80,000,000 80,000,000 shares (Limited Partnership) RMB common Zhou Xiayun 78,848,640 78,848,640 shares RMB common Zhou Hui 72,277,920 72,277,920 shares Beijing Guangyin Venture Capital RMB common 68,848,230 68,848,230 Center (Limited Partnership) shares RMB common Zhou Li 48,185,280 48,185,280 shares RMB common Li Yongxin 36,351,561 36,351,561 shares China Merchants Bank Co., Ltd. — RMB common BOCOM Schroders Growth Hybrid 30,507,767 30,507,767 shares Securities Investment Fund The Company’s controlling shareholder and actual controller Lu Zhongfang and Li Yongxin are in a parent-child relationship. Lu Zhongfang, Li Yongxin, and Beijing Offcn Future Information Consulting Center (Limited Partnership) constitute Description of the relationship or persons acting in concert. Zhou Xiayun and Zhou Hui have a father-son relationship. concerted action among the above Zhou Xiayun and Zhou Li have a father-daughter relationship. It is unknown mentioned shareholders whether there is an associated relationship among the above-mentioned other shareholders, and whether the above-mentioned shareholders belong to the parties acting in concert. Description of the top 10 shareholders participating in the margin trading (if None any) 6 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Whether the top 10 common shareholders and the top 10 common shareholders without sales conditions of the Company carry out the agreed repurchase transaction during the reporting period □ Yes √ No The Company’s top 10 common shareholders and top 10 common shareholders without sales conditions didn’t conduct agreed repurchase transactions during the reporting period 2. Table on the total number of preferred shareholders and shares held by the top 10 preferred shareholders □ Applicable √ Not Applicable 7 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Chapter III. Significant Events Section I. Cases and reasons of main financial data and indicators fluctuation during the reporting period √ Applicable □ Not Applicable Unit:RMB Amount at the Amount at the Balance Sheet end of the beginning of the Growth Statements reporting period reporting period Mainly due to the increase in the purchase and Monetary funds 3,127,976,812.41 5,950,395,089.12 -47.43% construction of fixed assets and land use rights Transactional financial Mainly due to the structural adjustment of asset allocation 340,458,014.46 983,205,858.25 -65.37% assets in the current period Mainly due to the increased prepayments Prepayments 2,984,481.00 2,204,120.00 35.40% for the employees’ business travel air tickets to the travel agency. Mainly due to the increase in current accounts and Other receivables 562,009,727.82 304,318,966.20 84.68% employee borrowings Mainly due to the increase in time deposits purchased by Other current assets 837,225,325.51 175,179,650.61 377.92% the company within one year Mainly due to the implementation of the new lease Right-of-use assets 1,449,126,148.68 standard from January 1, 2021, and the increase in right-of-use assets Other non-current Mainly due to the purchase and construction of fixed 3,827,994,523.92 1,151,091,703.31 232.55% assets assets and intangible assets Employee benefits Mainly due to the effect of employee salaried and bonuses 360,434,166.16 637,448,433.99 -43.46% payable of the previous year Mainly due to the payment of corporate income tax in Q4 Taxes payable 76,878,568.77 131,111,770.78 -41.36% of 2020 Mainly due to the implementation of the new lease Non-current liabilities 479,787,466.27 standard from January 1, 2021, and the increase in due within one year non-current liabilities due within one year Mainly due to the implementation of the new lease Lease liability 592,382,877.48 standard from January 1, 2021, and the increase in lease liabilities 8 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Income Statement Current period Previous period Growth Statements Mainly due to the gradual end of the pandemic in the Total operating income 2,051,691,383.47 1,230,102,270.48 66.79% second half of 2020, the continuous recovery of the market and the gradual increase in business income Mainly due to the end of the pandemic and the gradual Operating cost 824,615,510.04 520,863,204.58 58.32% recovery of offline training Sales expense 435,647,726.75 273,147,797.16 59.49% Mainly due to the resumption of marketing activities Management expense 340,240,393.35 209,704,141.65 62.25% Mainly due to the resumption of daily business activities Mainly due to the Company's expansion of R&D and R&D expense 267,150,553.55 105,248,410.14 153.83% increased investment Mainly due to the increase in short-term borrowing interest and collection fees and the amortization of Financial expense 108,656,990.19 55,032,787.52 97.44% unrecognized financing expenses to financial expenses according to the new lease standard Mainly due to the increase of reduction in value-added tax Other income 60,454,036.43 36,688,536.72 64.78% enjoyed by the company Mainly due to the structural adjustment of asset allocation Investment income 32,350,483.88 49,118,685.21 -34.14% in the current period and the decline in the rate of return on property management Cash Flow Statement Current period Previous period Growth Statements Cash receipts from the Mainly due to the impact of one month in advance of the sale of goods and the 2,257,705,337.11 4,268,644,542.62 -47.11% multi-provincial joint examination, the peak fee period rendering of services was reduced by nearly one month Other cash received Mainly due to the increase in interest on bank demand related to operating 8,365,632.60 3,552,880.40 135.46% deposits and the increase in other income activities Cash paid to and for Mainly due to the increase in employee salaries paid in the 1,788,537,241.10 1,090,339,239.09 64.03% employees current period Cash receipts from Mainly due to the structural adjustment of asset allocation disposals and recovery 4,234,310,000.00 9,555,548,985.25 -55.69% in the current period of investments Cash received from Mainly due to the structural adjustment of asset allocation 11,192,589.09 31,375,210.42 -64.33% investment income in the current period Cash paid for the purchase and Mainly due to the purchase and construction of fixed 2,774,248,578.57 812,081,033.98 241.62% construction of fixed assets and intangible assets assets, intangible 9 Offcn Education Technology Co., Ltd. First Quarter 2021 Report assets and other long-term assets Cash paid for Mainly due to the structural adjustment of asset allocation 4,226,550,000.00 13,732,288,090.00 -69.22% investment in the current period Cash received from the 2,670,000,000.00 1,660,000,000.00 60.84% Mainly due to the increase in borrowings loan Cash paid for debt 2,090,000,000.00 810,000,000.00 158.02% Mainly due to the repayment of short-term loans repayment Cash paid for Mainly due to the increase in interest payments on dividends, profits, or 46,324,162.51 32,099,556.25 44.31% short-term loans interest payments Mainly due to the implementation of the new lease standard from January 1, 2021, the rent paid during the Other cash paid related 354,129,507.17 reporting period was adjusted from “ payment of other to financing activities cash related to operating activities” to “payment of other cash related to financing activities” Section II. Progress of significant events, their impact and analysis on the solutions √ Applicable □Not applicable Significant events and their progress during the reporting period have been disclosed in the interim announcement. For details, please refer to the disclosure index below Website index for query of Disclosure Overview of significant events interim report date disclosure The Company held the fourteenth meeting of the fifth board of directors on November 10, and 26, 2020, and the second extraordinary general meeting of shareholders in 2020. Proposal on wholly-owned subsidiary to participate in the bidding for land use right, was http://www.cninf reviewed and passed, approving Beijing Offcn Future Education Technology Co., Ltd. ,a o.com.cn/new/dis wholly-owned subsidiary to participate in the bidding for land use right of state-owned closure/detail?pla land, first-level development project CP00-1804-0002 land, R2 second-class residential te=szse&orgId=9 land, CP00-1804-0012 land and F3 for other types of multi-functional land at Qiliqu November 11, 900021221&stoc Nanbei Village, Shahe Town, Changping District, Beijing 2020 kCode=002607& On December 2, 2020, the wholly-owned subsidiary Beijing Offcn Future Education announcementId Technology Co., Ltd. obtained Transfer Confirmation Letter for Use Right of Beijing =1208723592&a State-owned Construction Land , confirming that the wholly-owned subsidiary successfully nnouncementTim bid for the land for RMB 3,005 million. The Company plans to build the Company's online e=2020-11-11 technology R&D center, online and offline integrated education demonstration center, integrated training center for R&D and teaching personnel, vertical integration response command center for national market, and innovative education headquarters on this land. 10 Offcn Education Technology Co., Ltd. First Quarter 2021 Report The Company held its board of directors, board of supervisors, and the third extraordinary general meeting of shareholders in 2020 on November 23 and December 9, 2020, and reviewed and approved the Proposal on the Company’s Compliance with the Conditions for Non-public Issuance of A Shares, Proposal on the Company ’s Non-Public Issuance of A Shares and Proposal on the Company's Plan for Non-Public Issuance of A Shares and other http://www.cninf proposals related to this non-public issuance. o.com.cn/new/dis On December 30, 2020, the Company announced the Announcement on the Acceptance of closure/detail?pla Applications for Non-public Issuance of Shares by the China Securities Regulatory te=szse&orgId=9 Commission (Announcement No.: 2020-052). 900021221&stoc On January 8, 2021, the Company announced the "Notice on Receiving One Feedback from Jan. 27, 2021 kCode=002607& the Administrative License Project Review of China Securities Regulatory Commission announcementId (Announcement No: 2021-002). =1209194794&a On Jan 27, 2021, the Company announced the Report on the Response to Notice on nnouncementTim Receiving One Feedback from the Administrative License Project Review of China e=2021-01-27 Securities Regulatory Commission and other documents. On the same day, it also announced the adjustments to the non-public issuance plan including the Plan for Non-public Issuance of A Shares (Revised Draft) and related announcements reviewed and approved at the 17th meeting of the Fifth Board of Directors and the 14th Meeting of the Fifth Board of Supervisors. Implementation progress of share repurchase □Applicable √ Not applicable Progress in the implementation of shareholdings reduction through centralized bidding □Applicable √ Not applicable Section III. Commitments in implementation by the Company's actual controller, shareholders, related parties, acquirer and the Company itself, etc. during the reporting period √ Applicable □Not applicable The important commitments made by the major asset restructuring parties are as follows: Commit Perfo Commitment Commitment Commitm Main contents of commitment ment rman Party Type ent period time ce After the completion of the transaction (starting from the date of the listing of shares issued in this transaction), the Yaxia Industrial, company/I/the plan shall not transfer the shares with rights Under Zhou Xiayun, Letter of and interests of Yaxia Auto within 36 months . norma Zhou Hui, Zhou commitment May 4, Jan. 31, l After the completion of the transaction, the shares held by Li, Phase-I on lock-up 2018 2022 imple employee stock period the Company/I/the plan, derived from Yaxia Auto shares mentat ownership plan due to the distribution of stock dividends and the ion conversion of capital reserve to share capital shall also comply with the above-mentioned arrangement of 11 Offcn Education Technology Co., Ltd. First Quarter 2021 Report restricted sale of shares. If the China Securities Regulatory Commission and/or Shenzhen Stock Exchange have/has other provisions for the above-mentioned lock-up period arrangement , the company/I/the plan will adjust and implement the above-mentioned lock-up period arrangement according to the latest regulations of the China Securities Regulatory Commission and/or Shenzhen Stock Exchange. If violating the above commitments, the company/I/the plan will bear all losses caused to Yaxia Auto. 1. The shares of the listed Company subscribed by myself in this transaction shall not be transferred or dealt with in any other forms within 36 months from the date of the listing of the shares. Within 6 months after the listing of the shares, if the closing price of the listed company stock is lower than the issue price for consecutive 20 trading days , or the closing price of the stock at the end of the 6 months after the listing of the shares is lower than the issue price, the lock-up period of consideration shares acquired by myself shall be automatically extended for 6 months. (If dividend or bonus shares distribution, conversion of capital reserve or allotment by the listed company occurred during the above-mentioned period, the aforementioned issue price shall be calculated based on the price adjusted by factors as ex-dividend and ex-rights, Letter of etc.) Under Commitment 2. As the transferee of 72,696,561 Yaxia Auto shares held norma on lock-up Apr. 27, Jan. 31, l Li Yongxin by Anhui Yaxia Industrial Co., Ltd., I shall not transfer period for 2018 2022 imple subscription of such shares within 36 months from the registration date of mentat shares such shares in my securities account. ion 3. The aforesaid arrangement of share lock-up does not affect the implementation of profit compensation for this transaction, that is, when I need to make profit compensation, the listed company has the right to relieve the lock-up of shares in corresponding amount in advance for profit compensation. 4. I promise to abide by the following provision: if the transaction is investigated by judiciary authorities or the China Securities Regulatory Commission on suspicion of misrepresentations, misleading statements, or material omissions in regard to the information provided or disclosed, the shares of the listed Company acquired in this transaction shall not be transferred until the conclusion of the investigation is clarified. 5. After the completion date of this transaction, my 12 Offcn Education Technology Co., Ltd. First Quarter 2021 Report increased shares due to bonus shares distribution or conversion of capital reserve of the listed Company shall also comply with the foregoing requirements. 6. If the aforementioned lock-up period arrangement does not comply with the latest laws and regulations and the latest regulatory requirements of the securities regulatory institution, I agree to implement the arrangement in accordance with the latest laws and regulations and the requirements of the regulatory agency. 7. After the lock-up period expires, it will be implemented in accordance with the relevant regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange. 1. The shares of the listed Company subscribed by myself in this transaction shall not be transferred or dealt with in any other forms within 36 months from the date of the listing of the shares. Within 6 months after the listing of the shares, if the closing price of the listed company stock is lower than the issue price for consecutive 20 trading days , or the closing price of the stock at the end of the 6 months after the listing of the shares is lower than the issue price, the lock-up period of consideration shares acquired by myself shall be automatically extended for 6 months. (If dividend or bonus shares distribution, conversion of capital reserve or allotment by the listed company occurred during the above-mentioned period, the aforementioned issue price shall be calculated based on Letter of Under the price adjusted by factors as ex-dividend and ex-rights, commitment norma on lock-up etc.) Jan. 31, l Lu Zhong Fang Apr. 27, period for 2. The aforesaid arrangement of share lock-up does not 2022 imple 2018 subscription of mentat affect the implementation of profit compensation for this shares ion transaction, that is, when I need to make profit compensation, the listed company has the right to relieve the lock-up of shares in corresponding amount in advance for profit compensation. 3. I promise to abide by the following provision: if the transaction is investigated by judiciary authorities or the China Securities Regulatory Commission on suspicion of misrepresentations, misleading statements, or material omissions in regard to the information provided or disclosed, the shares of the listed Company acquired in this transaction shall not be transferred until the conclusion of the investigation is clarified. 4. After the completion date of this transaction, my increased shares due to bonus shares distribution or 13 Offcn Education Technology Co., Ltd. First Quarter 2021 Report conversion of capital reserve of the listed Company shall also comply with the foregoing requirements. 5. If the aforementioned lock-up period arrangement does not comply with the latest laws and regulations and the latest regulatory requirements of the securities regulatory institution, I agree to implement the arrangement in accordance with the latest laws and regulations and the requirements of the regulatory agency. 6. After the lock-up period expires, it will be implemented in accordance with the relevant regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange. 1. The shares of the listed Company subscribed by Kerui Technology Innovation in this transaction shall not be transferred or dealt with in any other forms within 36 months from the date of the listing of the shares. Within 6 months after the listing of the shares, if the closing price of the listed company stock is lower than the issue price for consecutive 20 trading days, or the closing price of the stock at the end of the 6 months after the listing of the shares is lower than the issue price, the lock-up period of consideration shares acquired by Kerui Technology Innovation shall be automatically extended for 6 months. (If dividend or bonus shares distribution, conversion of capital reserve or allotment by the listed company occurred during the above-mentioned period, the Letter of aforementioned issue price shall be calculated based on Under commitment the price adjusted by factors as ex-dividend and ex-rights, norma Kerui Jan. 31, on lock-up Jul. 27, l Technology etc.) period for 2018 2022 Imple Innovation 2. The enterprise promises to abide by the following subscription of mentat shares provision: if the transaction is investigated by judiciary ion authorities or the China Securities Regulatory Commission on suspicion of misrepresentations, misleading statements, or material omissions in regard to the information provided or disclosed, the shares of the listed Company acquired in this transaction shall not be transferred until the conclusion of the investigation is clarified. 3. After the completion date of this transaction, the increased shares that the enterprise owns due to bonus shares distribution or conversion of capital reserve of the listed Company shall also comply with the foregoing requirements. 4. If the aforementioned lock-up period arrangement does not comply with the latest laws and regulations and the 14 Offcn Education Technology Co., Ltd. First Quarter 2021 Report latest regulatory requirements of the securities regulatory institution, the enterprise agrees to implement the arrangement in accordance with the latest laws and regulations and the requirements of the regulatory agency. 5. After the lock-up period expires, it will be implemented in accordance with the relevant regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange. Within 36 months from the date of the transfer of 80,000,000 shares of Yaxia Auto held by Anhui Yaxia Industrial Co., Ltd. to the enterprise, the shares shall not Letter of Under be transferred. The lock-up period of the shares increased norma commitment Offcn during the above period due to bonus shares distribution, Apr. 27, Jan. 31, l on the lock-up Partnership 2018 2022 imple conversion of capital reserve or allotment of shares by of shares mentat Yaxia Auto, shall also comply with the foregoing ion requirements. If the enterprise violates commitments listed above, it will bear all losses caused to Yaxia Auto. Within 36 months from the date of the transfer of 80,000,000 shares of Yaxia Auto held by Anhui Yaxia Letter of Industrial Co.,Ltd. to Beijing Offcn Future Information Consulting Center (Limited Partnership), I or the commitment Under enterprise shall not in any way transfer the shares of norma on the lock-up Beijing Offcn Future Information Consulting Center Jan. 31, Li Yongxin and Jul. 27, l of Offcn (Limited Partnership) or withdraw from the partnership other 10 2018 2022 imple with Beijing Offcn Future Information Consulting Center counterparties Partnership’s mentat (Limited Partnership), nor do we transfer, assign or contribution ion authorize other entities in any way to fully or partially shares have the rights and interests indirectly related to the shares of Yaxia Industrial Co., Ltd. held by Beijing Offcn Future Information Consulting Center (Limited Partnership). I. Guarantee the independence of the listed Company’s personnel (1) It is guaranteed that after the completion of this transaction, the personnel, human resources and remuneration management of the listed Company shall be completely independent from myself/Offcn Partnership, Li Yongxin Letter of and from other related parties, such as companies, Under commitment enterprises or economic organizations, controlled by imple Lu Zhongfang on maintaining April 27, mentat Wang Zhendong myself/Offcn Partnership. Long-term independence 2018 ion Offcn of the listed (2) It is guaranteed that after the completion of this norma Partnership Company transaction, senior executives shall work as full-time lly employees and receive remuneration in the listed Company. They shall not hold any positions other than directors or supervisors in other companies, enterprises, or economic organizations controlled by myself/Offcn Partnership. (3) It is guaranteed that after the completion of this 15 Offcn Education Technology Co., Ltd. First Quarter 2021 Report transaction, the official powers of the shareholders’ meeting and board of directors on personnel appointments and dismissals shall not be interfered. II. Guarantee the independence of institutes of the listed Company (1) It is guaranteed that after the completion of this transaction, the listed Company shall build a sound structure of corporate governance and develop an independent and complete organizational structure. (2) It is guaranteed that after the completion of this transaction, the general meeting of shareholders, the board of directors, and the board of supervisors shall independently exercise their powers in accordance with laws, regulations and the Company’s Articles of Corporation. III. Guarantee the independence and completeness of the assets of the listed Company. (1) It is guaranteed that after the transaction, the listed Company shall have independent and complete assets related to production and operation. (2) It is guaranteed that after the completion of this transaction, the business premises of the listed Company shall be independent from myself/Offcn Partnership, and other related parties, such as companies, enterprises, or other economic organizations controlled by myself/Offcn Partnership. (3) It is guaranteed that after the completion of this transaction, except for normal business dealings, there shall be no capital and assets of the listed Company occupied by myself/Offcn Partnership, and other related parties, such as companies, enterprises or economic organizations, controlled by myself or Offcn Partnership. IV. Guarantee the independence of the listed Company’s business. (1) It is guaranteed that after the completion of this transaction, the listed Company shall have the qualifications of independently conducting business activities and the capabilities of running market-oriented, independent, autonomous, sustainable business. (2) It is guaranteed that after the completion of this transaction, I/Offcn Partnership,or other related parties,such as companies, enterprises, or other economic organization controlled by myself/Offcn Partnership shall avoid businesses which have a competitive relationship 16 Offcn Education Technology Co., Ltd. First Quarter 2021 Report with the listed Company and its subsidiaries. (3) It is guaranteed that after the completion of this transaction, I/Offcn Partnership, or related parties, such as companies, enterprises, or other economic organizations controlled by myself/Offcn Partnership shall reduce related-party transactions with the listed Company and its subsidiaries. Related-party transactions that are really necessary and unavoidable shall be conducted in a market-oriented and fairly way and perform relevant approval processes and information disclosure obligations in accordance with relevant laws, regulations and regulatory documents. V. Guarantee the financial independence of the listed Company. (1) It is guaranteed that after the completion of this transaction, the listed Company shall establish an independent financial department with independent financial accounting systems and standardized and independent financial accounting rules. (2)It is guaranteed that after the completion of this transaction, the listed Company shall open bank accounts independently and shall not share bank accounts with myself/Offcn Partnership/other related parties, such as companies, enterprises or other economic organizations controlled by myself or Offcn Partnership. (3) It is guaranteed that after the completion of this transaction, financial personnel hired by the listed Company shall not hold any part-time positions in other related parties, such as companies, enterprises or other economic organizations controlled by myself or Offcn Partnership (4) It is guaranteed that after the completion of this transaction, the listed Company can make financial decisions independently. I/Offcn Partnership shall not interfere with the use of funds by the listed Company. (5) It is guaranteed that after the completion of this transaction, the listed Company will pay taxes independently according to laws. I/Offcn Partnership shall be liable for all losses caused to the listed Company and its subsidiaries due to my/Offcn Partnership’s failure in fulfilling the above commitments. Letter of 1. As of the date of signing this commitment letter, As of Commitment myself, my close relatives and other companies, 1. The the Li Yongxin, Lu Sept. 20, on avoiding end of Zhongfang enterprises or economic organizations controlled by 2018 transfer of horizontal the competition myself and my close relatives, except for Beijing Offcn Kairuier reporti 17 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Online Education Technology Co., Ltd. (hereinafter Training ng referred to as Offcn Online), controlled by my relatives School in period , Xuhua and Lu Yan, and its affiliated schools which are Haidian Kairui involved in the same or similar businesses conducted by District of er Offcn Ltd., other related parties are not involved in any Beijing: Traini ng same, similar or related businesses conducted by the listed within 24 Schoo Company, Offcn Ltd. and its affiliated companies and months l in schools. Except for serving as a director in Kunming from the Haidia n Wuhua Offcn training school, which is affiliated to Offcn date of the Distric Online, Li Yongxin neither holds any full-time or signing of t of part-time positions nor provides consultancy at any this letter Beijin companies or enterprises, which conducts competitive of g had been businesses with the listed Company, Offcn Ltd. and their commitme transfe affiliates. I also do not directly or indirectly hold any nt rred to equity or shares of companies or enterprises conducting 2. The an transfer of unrela the same, similar or related businesses as the listed Kunming ted Company, Offcn Ltd. and its affiliates. Wuhua third 2. As of the date of signing this commitment letter, Offcn party. Training Other Offcn Online and its two subordinate training schools’ School : comm disposals are as follow: Offcn Online conducts no itment within 12 education businesses (to be canceled after subordinate months s are schools transferred). Kairuier Training School in Haidian after the under revised norma District of Beijing is to be transferred to an unrelated third l Regulation party and the transfer agreement has been signed. If the s of imple transfer is not completed within 24 months since the date Implement mentat ation ion of signing this commitment letter, I will urge Offcn Online officially to cancel the Kairuier Training School in Haidian District promulgate of Beijing. Kunming Wuhua Offcn Training School, d and associated with Offcn Online, has been closed and it will implement ed and be transferred to an unrelated third party or will be supporting canceled within 12 months after the revised Regulations regulations for the Implementation of the Law on the Promotion of formulated by relevant Private Education of the People’s Republic of China local (hereinafter referred to as Regulations of Implementation) education is officially promulgated and implemented and supporting authorities regulations formulated by relevant local education in accordance authorities in accordance with the revised Regulations of with the Implementation comes into effect. revised 3. As of the date of signing this commitment letter, Offcn Regulation s of Ltd. as the organizer intends to transfer its 100% of the Implement organizer’s rights of 33 private schools for non-academic ation qualifications to Li Yongxin and singed the Agreement on comes into effect. Transfer of Organizer’s Rights of Private Schools for Non-Academic Qualifications Affiliated to Beijing Offcn 18 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Education Technology Co., Ltd. Li Yongxin is willing to entrust the transferred 33 private schools for non-academic qualifications to Offcn Ltd. and signed the Trusteeship Agreement of Private Schools for Non-academic Qualifications. 4. After the completion of transaction, except for the above-mentioned cases, I promise that during the time of being the actual controller of the listed Company, I, my close relatives and other related parties, such as companies, enterprises or other economic organizations, controlled by myself and my close relatives shall not in any way (including but not limited to self operated or with other parties to operate joint venture, cooperation, joint operation, investment, mergence, and trustee operation home and aboard) engage in the same, similar, related and competitive businesses with the listed Company, which includes the follows: (1) I will not directly or indirectly operate, participate in or assist others to conduct same, similar businesses or other economic activities which directly or indirectly constitute a competitive relationship with businesses currently operated by the listed Company and its affiliated companies. (2) I will not directly or indirectly invest on any economic entities whose businesses constitute a direct or indirect competitive relationship with the listed Company and its affiliates. (3) I will not be hired by any competitors that directly or indirectly compete with the listed Company and its affiliates, or provide any advice, assistance or business opportunities directly or indirectly to such competitors;. (4) I will not instigate, mislead, encourage or otherwise induce, persuade, or coerce the employees or management personnel in the listed Company and its affiliates to terminate their labor or employment relationship with the Company and its affiliates. (5) I will not urge others to hire employees or management personnel from the listed Company and its affiliates. 5. I promise that if I, my close relatives and other related parties, such as companies, enterprises or other economic organizations controlled by myself and my close relatives obtain any business opportunities from any third party, which can or may compete with the listed Company and 19 Offcn Education Technology Co., Ltd. First Quarter 2021 Report its affiliates in the future, I will notify the listed Company and its affiliates in writing within 5 working days. After obtaining the third party’s promise, I will attempt to transfer these business opportunities to the listed Company and its affiliates. 6. I guarantee that I would never use my knowledge about and the information I’m aware of the listed Company and its affiliates to assist third parties to engage, participate, or invest in businesses or projects that compete with the listed companies and its affiliates. 7. If I violate the above commitments, the benefits obtained by the violation of commitments shall belong to the listed Company and I shall be liable for all losses caused to the listed Company and its affiliates. Within 30 working days since receiving the writing notice from the listed Company, compensation will be made in cash. 8. I will disclose relevant information in a timely manner if commitments fail to be fulfilled or to be fulfilled on schedule because of objective reasons, such as changes in relevant laws, regulations and policies, or natural disasters. Except for the above-mentioned objective reasons, if the commitment is anyhow unable to be fulfilled or fulfilling the commitment is not conducive to safeguarding the rights and interests of the listed Company, I should fully disclose the reasons and either provide a new commitment to the listed Company and related investors to replace the original one, or propose an exemption from fulfilling the commitment. 9. The commitment is valid from the date when the commit letter is signed to the time when I cease to be the actual controller of the listed Company. 1. As of the date of signing this letter of commitments, I, my close relatives, related parties, such as companies, enterprises or other economic organizations controlled by myself and my close relatives, Offcn Partnership and related parties, such as other enterprises or economic organizations controlled by Offcn Partnership, participate in no businesses which are the same, similar o or related to businesses competing with the listed Company, Offcn Under Letter of Wang Ltd. and their affiliated companies and schools. Except for norma Commitment Zhendong, April 27, l on avoiding serving as a director at Beijing Haidian District Kairuier Offcn 2018 Long-term imple horizontal Training School, affiliated to Offcn Online ( Offcn Online Partnership mentat competition tends to transfer the rights of Kairuier Training School to ion an unrelated third party and after this transfer, Wang Zhendong will not hold the post as a director.), I neither holds any full-time or part-time positions nor provides consultancy at any companies or enterprises which conducts competitive businesses with the listed Company, Offcn Ltd. and their affiliates.serve as a consultant or a part-time employee in other companies or enterprises that 20 Offcn Education Technology Co., Ltd. First Quarter 2021 Report pose competitions against the listed Company, Offcn Ltd. and its affiliates. I do not directly or indirectly hold the equity of an company or entity that runs the same, similar or relevant business engaged by the listed Company, Offcn Ltd. and its affiliates. 2.After the completion of transaction, I/Offcn Partnership promise that during the time of being shareholders of the listed Company, I, my close relatives and other related parties, such as companies, enterprises or other economic organizations, controlled by myself and my close relatives , Offcn Partnership and related parties, such as other enterprises or economic organizations controlled by Offcn Partnership, shall not in any way (including but not limited to self operated or with other parties to operate joint venture, cooperation, joint operation, investment, mergence, and trustee operation home and aboard) engage in the same, similar, related and competitive businesses with the listed Company, which includes the follows: I will not directly or indirectly operate, participate in or assist others to conduct same, similar businesses or other economic activities which directly or indirectly constitute a competitive relationship with businesses currently operated by the listed Company and its affiliated companies. 2. .I will not directly or indirectly invest on any economic entities whose businesses constitute a direct or indirect competitive relationship with the listed Company and its affiliates. 3. I will not be hired by any competitors that directly or indirectly compete with the listed Company and its affiliates, or provide any advice, assistance or business opportunities directly or indirectly to such competitors;. 4. I will not instigate, mislead, encourage or otherwise induce, persuade, or coerce the employees or management personnel in the listed Company and its affiliates to terminate their labor or employment relationship with the Company and its affiliates. 5. I will not urge others to hire employees or management personnel from the listed Company and its affiliates. 3. I/Offcn Partnership promise that if I, my close relatives and other related parties, such as companies, enterprises or other economic organizations controlled by myself and my close relatives, Offcn Partnership and related parties, such as other enterprises or economic organizations controlled by Offcn Partnership, obtain any business 21 Offcn Education Technology Co., Ltd. First Quarter 2021 Report opportunities from any third party, which can or may compete with the listed Company and its affiliates in the future, I/Offcn Partnership will immediately notify the listed Company. After obtaining the third party’s promise, I will attempt to transfer these business opportunities to the listed Company and its affiliates. 4. I guarantee that I would never use my knowledge about and the information I’m aware of the listed Company and its affiliates to assist third parties to engage, participate, or invest in businesses or projects that compete with the listed companies and its affiliates. If I/Offcn Partnership shall be liable for all losses caused to the listed Company and its affiliates due to my/Offcn Partnership’s failure in fulfilling commitments. 1. After the transaction is completed, during the time of being the actual controller of the listed Company, I, my close relatives and other companies, enterprises or other economic organizations controlled by myself, my close relatives will try to avoid and reduce the related-party transactions with the listed Company and its affiliates; unless it is necessary for the business development of the listed Company, any related-party transactions with the listed Company and its affiliates will not be conducted. 2. After the transaction is completed, for the related-party transactions which are unavoidable or reasonable to happen with the listed Company and its affiliates, I, my close relatives and other companies, enterprises or economic organizations controlled by myself and my Letter of close relatives, will sign related-party transaction Commitment agreements with the listed Company and its affiliates in Under on reducing accordance with the relevant laws, regulations and norma Li Yongxin, Lu Jul. 27, l and regulating regulatory documents and follow the general business Zhongfang 2018 Long-term imple related-party principles of equality, willingness, equivalence and mentat transactions paid-use. The prices of related-party transactions shall be ion fair. Decision-making procedures, lawful information disclosure obligations and relevant reporting and approval procedures regarding the related-party transactions, shall be followed. The status of shareholders shall not be used to damage the legitimate rights and interests of the listed Company and other shareholders. 3. After the completion of the transaction, I will not use the shareholders’ rights of the listed Company to manipulate or instruct the listed Company or its directors, supervisors and senior executives to make the listed Company provide or accept funds, commodities, services or other assets under inequal conditions or engage in any behaviors that would damage the interests of the listed 22 Offcn Education Technology Co., Ltd. First Quarter 2021 Report companies. 4. I will urge my close relatives and other companies, enterprises and other economic organizations controlled by myself and my close relatives to abide by the aforementioned commitments. 5. If I, my close relatives and other companies, enterprises and other economic organizations controlled by myself and my close relatives violate the above commitments, the profits obtained by the violation of commitments belong to the listed Company, and I shall be liable for all losses caused to the listed Company and its affiliates. Within 30 working days since receiving the written notice from the listed Company, compensation will be made in cash. 6. The commitment is valid from the date when it is signed to the time when I cease to be the actual controller of Yaxia Auto and there is no other related relationship with Yaxia Auto. 1. After the completion of transaction, during the period of being the actual controller/shareholder , I, my close relatives and other companies, enterprises or other economic organizations controlled by myself, my close relatives , Aerospace Industry or Offcn Partnership, will try to avoid and reduce the related-party transactions with the listed Company. 2. After the transaction is completed, for the related-party transactions which are unavoidable or reasonable to happen with the listed Company and its affiliates, myself, my close relatives and other companies, enterprises or economic organizations controlled by myself and my Letter of close relatives, Aerospace Industry or Offcn Partnership, Commitment Under Wang will sign related-party transactionagreements with the on reducing norma Zhendong, listed Company and its affiliates in accordance with the April 27, l Aerospace and regulating relevant laws, regulations and regulatory documents and 2018 Long-term imple Industry, Offcn related-party mentat Partnership follow the general business principles of equality, transactions ion willingness, equivalence and paid-use. The prices of related-party transactions shall be fair. Decision-making procedures, lawful information disclosure obligations and relevant reporting and approval procedures regarding the related-party transactions, shall be followed. The status of shareholders shall not be used to damage the legitimate rights and interests of the listed Company and other shareholders. 3. After the completion of the transaction, I/Aerospace Industry/Offcn Partnership will not use the shareholders’ rights of the listed Company to manipulate or instruct the listed Company or the directors, supervisors and senior executives of the listed Company to make the listed 23 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Company provide or accept funds, commodities, services or other assets in different forms under unequal conditions or engage in any behaviors that would damage the interests of listed companies. I/Aerospace Industry/Offcn Partnership shall be liable for all losses caused to the listed Company and its affiliates due to my/Aerospace Industry’s/Offcn Partnership’s failures in fulfilling commitments. Whether the commitments Yes are fulfilled on time Section IV. Financial assets investment 1. Securities investment √ Applicable □Not applicable Unit: RMB Gains and Cumula Selli losses tive ng Gains Book Sec Accounti Origina Origi from changes Purchase Amo and loss value urit ng Source Securi Securities l nal changes in fair amount unt during at the Accounting ies measure s of ties abbreviation investm book in fair value for this for the end of subjects cod ment fund ent cost value value include period this reportin the e model for the d in perio g period period current equity d period Huitianfu Stable-profit fair 10,4 Hybrid 10,35 Transaction Self-o 010 Securities 9,999, value 67,9 -108,98 -108,98 Funds 0.00 0.00 0.00 8,964 al financial wned 439 Fund with 000.00 measure 53.1 9.10 9.10 .00 assets funds one-year ment 0 holding period Other securities investments -- -- -- held at the end of the period 10,4 10,35 9,999, 67,9 -108,98 -108,98 Total -- 0.00 0.00 0.00 8,964 -- -- 000.00 53.1 9.10 9.10 .00 0 Disclosure Date of the announcement of securities N/A investment approval board of directors Disclosure date of the N/A 24 Offcn Education Technology Co., Ltd. First Quarter 2021 Report announcement of the securities investment approval board of shareholders (if any) 2. Derivatives investment □ Applicable √ Not applicable There was no derivatives investment during the reporting period. Section V. Progress of the funded investment project(s) □ Applicable √ Not applicable Section VI. Section VI. Prediction on the business performance of the first half in 2021 Alarm and explanations on that the accumulated net profit from the beginning of the year to the end of the next reporting period may be a loss or have a significant change compared with the same period of last year. □ Applicable √ Not applicable Section VII. Significant contracts of daily operations □ Applicable √ Not applicable Section VIII. Entrusted financial management √ Applicable □ Not applicable Unit: RMB 10,000 Source of entrusted Amount of entrusted Amount not recovered Type Unexpired balance financing financing after the due date Bank financial products Self-owned fund 126,155.00 20,970.00 0.00 Trust financial products Self-owned fund 27,000.00 27,000.00 0.00 Others Self-owned fund 999.90 999.90 0.00 Total 154,154.90 48,969.90 0.00 Particulars of high-risk entrusted financial management with a large single amount, low security, poor liquidity or no capital protection □ Applicable √ Not applicable Entrusted financing is overdue and the principal cannot be recovered or there are other cases that may cause impairments. □ Applicable √ Not applicable 25 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Section IX. External guarantee violating regulations □ Applicable √ Not applicable There was no external guarantee violating regulations during the reporting period of the Company. Section X. Capital of the listed Company used for non-operational purposes by the controlling shareholders or their related parties □ Applicable √ Not applicable There was no occupation of the Company’s capital by the controlling shareholders or their related parties for non-operating purposes during the reporting period of the Company. Section XI. Registration form(s) of activities including reception of research, communication or interviews during the reporting period □ Applicable √ Not applicable There was no reception of research, communication or interviews during the reporting period of the Company. 26 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Chapter IV Financial Statements Section I. Financial statements 1. Consolidated balance sheet Company: Offcn Education Technology Co., Ltd. March 31, 2021 Unit:RMB Item March 31, 2021 December 31, 2020 Current assets: Monetary funds 3,127,976,812.41 5,950,395,089.12 Settlement reserve Lendings Transactional financial assets 340,458,014.46 983,205,858.25 Derivative financial assets Notes receivable Accounts receivable 26,029,435.13 21,493,637.66 Receivables financing Prepayments 2,984,481.00 2,204,120.00 Premium receivable Accounts receivable reinsurance Reserve for reinsurance receivable contracts Other receivables 562,009,727.82 304,318,966.20 Inc: Interest receivables Dividends receivables Buying back the sale of financial assets Inventories Contract assets Assets held-for-sale Non-current assets due within 2,004,339,413.11 1,985,873,462.75 one year Other current assets 837,225,325.51 175,179,650.61 27 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Total current assets 6,901,023,209.44 9,422,670,784.59 Non-current assets: Loans and advances Debt investments Other debt investments Long-term receivables Long-term equity investments Other equity investment 152,800,000.00 152,800,000.00 Other non-current financial assets 208,450,315.01 208,450,315.01 Investment properties 664,213,321.52 668,014,515.82 Fixed assets 1,614,085,375.35 1,612,792,592.67 Construction in progress 217,725,379.72 214,248,125.04 Bearer biological assets Oil and gas assets Right-of-use assets 1,449,126,148.68 Intangible assets 416,934,093.04 426,352,455.75 Development expenditure Goodwill 99,867,720.38 99,867,720.38 Long-term prepaid expenses 421,579,394.69 440,955,377.93 Deferred tax assets 21,662,085.86 21,606,436.77 Other non-current assets 3,827,994,523.92 1,151,091,703.31 Total Non-current Assets 9,094,438,358.17 4,996,179,242.68 Total Assets 15,995,461,567.61 14,418,850,027.27 Current liabilities: Short-term borrowings 4,561,785,731.98 3,976,019,329.22 Borrowings from central bank Borrowings from banks and other financial institutions Transactional financial liabilities Derivative financial liabilities Notes payable Accounts payable 169,175,218.20 211,824,402.86 Deposit received Contract liabilities 5,071,125,095.49 4,925,428,309.33 28 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Financial assets sold for repurchase Absorbing deposits and interbank deposits Acting trading securities Acting underwriting securities Payroll payable 360,434,166.16 637,448,433.99 Taxes payable 76,878,568.77 131,111,770.78 Other payables 11,883,165.93 9,479,383.03 Inc: Interest payables Dividends payables Fees and commissions payable Reinsurance accounts payable Liabilities held-for-sale Non-current liabilities due 479,787,466.27 within one year Other current liabilities 152,133,752.86 147,765,156.66 Total Current Liabilities 10,883,203,165.66 10,039,076,785.87 Non-current Liabilities: Insurance contract reserve Long-term borrowings Bonds payable Inc: preferred share Perpetual bond Lease liabilities 592,382,877.48 Long-term payables Long-term employee benefits payable Estimated liabilities Deferred income Deferred tax liabilities 104,050,004.19 104,677,444.59 Other non-current liabilities Total non-current liabilities 696,432,881.67 104,677,444.59 Total liabilities 11,579,636,047.33 10,143,754,230.46 Owners' equity: 29 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Share capital 103,807,623.00 103,807,623.00 Other equity instrument Perpetual bond Inc: preferred share Perpetual bond Capital reserve 1,225,481,049.50 1,225,481,049.50 Less: Treasury stock Other comprehensive income 30,000,000.00 30,000,000.00 Special reserve Surplus reserves 45,000,000.00 45,000,000.00 General risk preparation Undistributed profits 3,011,568,760.54 2,870,839,120.70 Total owners' equity attributable to 4,415,857,433.04 4,275,127,793.20 parent company Minority shareholders' equity -31,912.76 -31,996.39 Total owners’ equity 4,415,825,520.28 4,275,095,796.81 Total liabilities and owners’ equity 15,995,461,567.61 14,418,850,027.27 Legal representative: Wang Zhendong Person in charge of accounting work: Shi Lei Head of the accounting department: Luo Xue 2. Parent company balance sheet Unit: RMB Item March 31, 2021 December31, 2020 Current Assets: Monetary funds 107,525,773.93 56,138,356.37 Transactional financial assets 1,630,453.37 1,630,453.37 Derivative financial assets Notes receivable Accounts receivable 18,421,510.11 14,792,320.38 Receivables financing Prepayments Other receivables 3,118,793,467.42 621,900,443.29 Inc: interest receivables Dividends receivables Inventories 30 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Contract assets Assets held-for-sale Non-current assets due within one year Other current assets Total current assets 3,246,371,204.83 694,461,573.41 Non-current assets: Debt investments Other debt investments Long-term receivables Long-term equity investments 18,582,307,907.14 18,582,307,907.14 Other equity instrument 152,800,000.00 152,800,000.00 Other non-current financial assets Investment property 500,091,324.79 502,925,481.92 Fixed assets 381,240,464.99 383,060,000.00 Construction in progress 72,569,103.57 72,569,103.57 Productive biological assets Oil and gas assets Right-of-use assets Intangible assets Development expenditure Goodwill Long-term prepaid expenses Deferred tax assets 20,576,903.94 20,529,151.44 Other non-current assets 501,095,111.10 501,095,111.10 Total non-current assets 20,210,680,815.53 20,215,286,755.17 Total assets 23,457,052,020.36 20,909,748,328.58 Current liabilities: Short-term loan 1,301,418,819.44 871,083,875.00 Transactional financial liabilities Derivative Financial liabilities Notes payable Accounts payable 83,621,752.26 83,621,752.26 31 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Deposit received Contract liabilities Payroll payable Taxes payable 1,283,585.56 1,437,291.71 Other payable 2,580,853,599.38 446,606,530.72 Including:interest payable Dividend payable Liabilities held-for-sale Non-current liabilities due within one year Other current liabilities Total current liabilities 3,967,177,756.64 1,402,749,449.69 Non-current liabilities: Long-term loan Bonds payable Bonds payable_preferred stock Bonds payable_perpetual bond Lease liability Long-term payables Long-term salary payable Estimated liabilities Deferred income Deferred tax liability 10,007,613.34 10,007,613.34 Other non-current liabilities Total non-current liabilities 10,007,613.34 10,007,613.34 Total liabilities 3,977,185,369.98 1,412,757,063.03 Owners’ equity: Share capital 6,167,399,389.00 6,167,399,389.00 Other equity instrument Other equity instruments_preferred stock Other equity instruments_perpetual bond Capital reserve 12,897,744,700.46 12,897,744,700.46 Less: Treasury stock 32 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Other comprehensive income 30,000,000.00 30,000,000.00 Special reserve Surplus reserves 387,458,806.65 387,458,806.65 Undistributed profits -2,736,245.73 14,388,369.44 Owners’ equity 19,479,866,650.38 19,496,991,265.55 Liabilities and owner's equity 23,457,052,020.36 20,909,748,328.58 3. Consolidated income statement Unit: RMB Amount for the Amount for the previous Item current period period I. Total operating income 2,051,691,383.47 1,230,102,270.48 Including:operating income 2,051,691,383.47 1,230,102,270.48 Interest income Premium earned Fee and commission income II. Total operating costs 1,979,436,277.98 1,167,262,125.00 Including:operating cost 824,615,510.04 520,863,204.58 Interest expense Fee and commission expenses Surrender money Net reimbursement expenditure Withdrawal of net insurance liability contract reserves Policyholder dividend expenses Reinsurance expenses Taxes and surcharges 3,125,104.09 3,265,783.95 Sales expenses 435,647,726.75 273,147,797.16 Management expenses 340,240,393.35 209,704,141.65 R&D expenses 267,150,553.55 105,248,410.14 Financial expenses 108,656,990.19 55,032,787.52 Including:interest expenses 52,090,565.27 38,457,427.92 Interest income 6,768,970.11 968,101.22 Add: other income 60,454,036.43 36,688,536.72 33 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Investment income (Loss is listed with “-”) 32,350,483.88 49,118,685.21 Including:investment income from associates and joint ventures Derecognition income of financial assets measured at amortized cost Exchange earnings (Loss is listed with “-”) Net exposure hedge income (Loss is listed with “-”) Fair value change income (Loss is listed with “-”) 12,156.21 Expected credit loss (Loss is listed with “-”) -239,123.84 Asset impairment loss (Loss is listed with “-”) Asset disposal income (Loss is listed with “-”) 56,256.12 12,208.74 III. Operting profit (Loss is listed with “-”) 164,888,914.29 148,659,576.15 Add: non-operating income 100.00 Less: non-operating expenses 69,002.90 75,001.22 IV. Total profit (The total loss is listed with "-") 164,819,911.39 148,584,674.93 Less:income tax expenses 24,090,187.92 32,283,423.70 V. Net profit (Net loss is listed with “-”) 140,729,723.47 116,301,251.23 i. Classified by business continuity 1.Net profit from continuing operations (Net loss is listed 140,729,723.47 116,301,251.23 with “-”) 2.Net profit from discontinued operations (Net loss is listed with "-") ii. Classification by ownership 1. Net profit attributable to the owner of the parent company 140,729,639.84 116,303,799.91 2. Minority shareholders' gains and losses 83.63 -2,548.68 VI. Net other comprehensive income Net other comprehensive income attributable to the parent company owner i. Other comprehensive income that cannot be reclassified into profit or loss 1, Changes from the remeasurement of the defined benefit plan 2. Other comprehensive income that cannot be transferred to profit or loss under the equity method 3. Changes in fair value of other equity instruments 4. Changes in fair value of the company's own credit risk 34 Offcn Education Technology Co., Ltd. First Quarter 2021 Report 5.Other ii. Other comprehensive income that will be reclassified into profit or loss 1. Other comprehensive income of convertible profit and loss under the equity method 2. Changes in fair value of other debt investments 3. Financial assets reclassified into other comprehensive income 4. Credit impairment provisions of other debt investment 5. Cash flow hedge reserve 6. Foreign currency financial statement translation difference 7.Other Net other comprehensive income attributable to minority shareholders VII. Total comprehensive income 140,729,723.47 116,301,251.23 Total comprehensive income attributable to owners of 140,729,639.84 116,303,799.91 the parent Total comprehensive income attributable to minority 83.63 -2,548.68 shareholders VIII. Earnings per share: i. Basic earnings per share 0.02 0.02 ii.Diluted earnings per share 0.02 0.02 If a business combination under the same control occurs in this period, the net profit realized by the combined party before the combination is RMB 0.00 and in the previous period is RMB 0.00. Legal representative: Wang Zhendong Person in charge of accounting: Shi Lei Head of the accounting department: Luo Xue 4. Parent company income statement Unit: RMB Amount for current Amount for the previous Item period period I. Operating income 3,638,285.44 3,783,950.22 Less:operating cost 2,834,157.13 2,833,966.08 Taxes and surcharges 1,163,820.00 1,064,546.25 Sales expenses 35 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Management expenses 6,789,652.53 2,207,928.42 R&D expenses Financial expenses 9,920,248.02 3,145,323.81 Including:interest expenses 9,965,044.45 3,167,404.17 Interest income 52,636.93 29,503.78 Add:other income 88,234.55 Investment income(Loss is listed with “-”) Including: investment income from associates and joint ventures Derecognition income of financial assets measured at amortized cost Net exposure hedge income (Loss is listed with “-”) Fair value change income (Loss is listed with “-”) Expected credit loss (Loss is listed with “-”) -191,009.98 Asset impairment loss (Loss is listed with “-”) Asset disposal income (Loss is listed with “-”) II. Operting profit(Loss is listed with “-”) -17,172,367.67 -5,467,814.34 Add: non-operating income Less: non-operating expenses III. Total profit(The total loss is listed with "-") -17,172,367.67 -5,467,814.34 Less:income tax expenses -47,752.50 IV. Net profit(Net loss is listed with "-") -17,124,615.17 -5,467,814.34 i. Net profit from continuing operations(Net loss is listed with "-") -17,124,615.17 -5,467,814.34 ii. Net profit from discontinued operations(Net loss is listed with "-") V. Net other comprehensive income i. Other comprehensive income that cannot be reclassified into profit or loss 1.Changes from the remeasurement of the defined benefit plan 2.Other comprehensive income that cannot be transferred to profit or loss under the equity method 3.Changes in fair value of other equity instruments 4.Changes in fair value of the company's own credit risk 5.Other ii. Other comprehensive income that will be reclassified into profit or loss 36 Offcn Education Technology Co., Ltd. First Quarter 2021 Report 1.Other comprehensive income of convertible profit and loss under the equity method 2.Changes in fair value of other debt investments 3.Financial assets reclassified into other comprehensive income 4.Credit impairment provisions of other debt investment 5.Cash flow hedge reserve 6.Foreign currency financial statement translation difference 7.Other VI. Total comprehensive income -17,124,615.17 -5,467,814.34 VII. Earnings per share: ⅰ Basic earnings per share ⅱ Diluted earnings per share 5. Consolidated cash flow statement Unit: RMB Amount for the current Amount for the previous Items period period I. Cash flow from operating activities: Cash received from the sale of goods and services 2,257,705,337.11 4,268,644,542.62 Net increase in customer deposits and interbank deposits Net increase in borrowing from central bank Net increase in funds borrowed from other financial institutions Cash received from the original insurance contract premium Net cash received from reinsurance business Net increase in policyholders’ deposits and investment funds Cash charged with interest, handling fees and commissions Net increase in funds borrowed in Net increase in repurchase funds Net cash received from agent buying and selling of securities Tax refund Other cash received related to other business activities 8,365,632.60 3,552,880.40 Subtotal of cash inflow from operating activities 2,266,070,969.71 4,272,197,423.02 Cash paid for the purchase of goods and services 389,263,578.68 304,236,568.73 37 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Net increase in customer loans and advances Net increase in deposit of central bank and interbank Cash paid for the original insurance contract Net increase in borrowed funds Cash paid for interest, handling fees and commissions Cash paid for policy dividends Cash paid to and for employees 1,788,537,241.10 1,090,339,239.09 Various taxes paid 81,728,859.56 112,063,354.25 Other cash paid for business activities 253,266,164.04 201,339,948.10 Subtotal of cash outflows from business activities 2,512,795,843.38 1,707,979,110.17 Net cash flow from operating activities -246,724,873.67 2,564,218,312.85 II. Cash flows from investing activities: Cash received from investment recovery 4,234,310,000.00 9,555,548,985.25 Cash received from investment income 11,192,589.09 31,375,210.42 Net cash received from disposal of fixed assets, intangible 56,256.12 12,208.74 assets and other long-term assets Net cash received from disposal of subsidiaries and other business units Other cash received related to investing activities Subtotal of cash inflows from investment activities 4,245,558,845.21 9,586,936,404.41 Cash paid for the purchase and construction of fixed assets, 2,774,248,578.57 812,081,033.98 intangible assets and other long-term assets Cash paid for investment 4,226,550,000.00 13,732,288,090.00 Net increase in pledge loans Net cash paid for aquiring subsidiaries and other business units Other cash paid related to investing activities Subtotal of cash outflows from investment activities 7,000,798,578.57 14,544,369,123.98 Net cash flows from investing activities -2,755,239,733.36 -4,957,432,719.57 III. Cash flow from financing activities: Cash received from investment absorption Including:cash received from subsidiaries in absorbing minority shareholders' investment Cash received from the loan 2,670,000,000.00 1,660,000,000.00 Other cash received related to fundraising activities 38 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Subtotal of cash inflows from financing activities 2,670,000,000.00 1,660,000,000.00 Cash paid for debt repayment 2,090,000,000.00 810,000,000.00 Cash paid for dividends, profits or interest payments 46,324,162.51 32,099,556.25 Including:dividends and profits paid by subsidiaries to minority shareholders Other cash paid related to financing activities 354,129,507.17 Subtotal of cash outflows from financing activities 2,490,453,669.68 842,099,556.25 Net cash flow from financing activities 179,546,330.32 817,900,443.75 IV. Effect of the changes of the exchange rate on cash and the equivalents V. Net increase in cash and cash equivalents -2,822,418,276.71 -1,575,313,962.97 Add:balance of cash and cash equivalents at the beginning of 5,950,395,089.12 2,724,335,001.58 the period VI. Balance of cash and cash equivalents at the end of the period 3,127,976,812.41 1,149,021,038.61 6. Parent company cash flow statement Unit: RMB Items Amount in current period Amount in previous period I. Cash flow from operating activities: Cash received from the sale of goods and services Tax refund Other cash received related to other business activities 3,165,431,634.24 416,689.56 Subtotal of cash inflow from operating activities 3,165,431,634.24 416,689.56 Cash paid for the purchase of goods and services Cash paid to and for employees Various taxes paid 1,319,515.53 1,580,784.85 Other cash paid for business activities 3,538,782,392.82 135,348,862.21 Subtotal of cash outflows from business activities 3,540,101,908.35 136,929,647.06 Net cash flow from operating activities -374,670,274.11 -136,512,957.50 II. Cash flows from investing activities: Cash received from investment recovery Cash received from investment income Net cash received from disposal of fixed assets, intangible assets and other long-term assets Net cash received from disposal of subsidiaries and other 39 Offcn Education Technology Co., Ltd. First Quarter 2021 Report business units Other cash received related to investing activities Subtotal of cash inflows from investment activities Cash paid for the purchase and construction of fixed assets, 300,000,000.00 intangible assets and other long-term assets Cash paid for investment Net cash paid for aquiring subsidiaries and other business units Other cash paid related to investing activities Subtotal of cash outflows from investment activities 300,000,000.00 Net cash flows from investing activities -300,000,000.00 III. Cash flow from financing activities: Cash received from investment absorption Cash received from the loan 1,000,000,000.00 570,000,000.00 Other cash received related to fundraising activities Subtotal of cash inflows from financing activities 1,000,000,000.00 570,000,000.00 Cash paid for debt repayment 570,000,000.00 Cash paid for dividends, profits or interest payments 3,942,308.33 2,409,779.16 Other cash paid related to financing activities Subtotal of cash outflows from financing activities 573,942,308.33 2,409,779.16 Net cash flow from financing activities 426,057,691.67 567,590,220.84 IV. Effect of the changes of the exchange rate on cash and the equivalents V. Net increase in cash and cash equivalents 51,387,417.56 131,077,263.34 Add:balance of cash and cash equivalents at the beginning of 56,138,356.37 6,931,803.33 the period VI. Balance of cash and cash equivalents at the end of the period 107,525,773.93 138,009,066.67 Section II. Explanation on the adjustments to the financial statements 1. The adjustment to the financial statements at the beginning of the year for the implementation of the new lease standard in 2021 for the first time √ Applicable □ Not applicable Whether items listed in the consolidated balance sheet at beginning of the year need to be adjusted 40 Offcn Education Technology Co., Ltd. First Quarter 2021 Report √ Yes □ No Consolidated Balance Sheet Unit: RMB Items December 31, 2020 January 1, 2021 Adjustment Current Assets: Monetary funds 5,950,395,089.12 5,950,395,089.12 Transactional financial assets 983,205,858.25 983,205,858.25 Accounts Receivable 21,493,637.66 21,493,637.66 Prepayments 2,204,120.00 2,204,120.00 Other receivables 304,318,966.20 304,318,966.20 Non-current assets due within 1,985,873,462.75 1,985,873,462.75 one year Other current assets 175,179,650.61 146,732,938.88 -28,446,711.73 Total current assets 9,422,670,784.59 9,394,224,072.86 -28,446,711.73 Non-current assets: Other equity instruments 152,800,000.00 152,800,000.00 Other non-current financial 208,450,315.01 208,450,315.01 assets Investment property 668,014,515.82 668,014,515.82 Fixed assets 1,612,792,592.67 1,612,792,592.67 Construction in progress 214,248,125.04 214,248,125.04 Right-of-use assets 1,491,006,998.14 1,491,006,998.14 Intangible assets 426,352,455.75 426,352,455.75 Goodwill 99,867,720.38 99,867,720.38 Long-term prepaid expenses 440,955,377.93 310,633,750.12 -130,321,627.81 Deferred tax assets 21,606,436.77 21,606,436.77 Other non-current assets 1,151,091,703.31 1,151,091,703.31 Total non-current assets 4,996,179,242.68 6,356,864,613.01 1,360,685,370.33 Total assets 14,418,850,027.27 15,751,088,685.87 1,332,238,658.60 Current liabilities: Short-term loan 3,976,019,329.22 3,976,019,329.22 Accounts payable 211,824,402.86 211,824,402.86 Contract liabilities 4,925,428,309.33 4,925,428,309.33 41 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Payroll payable 637,448,433.99 637,448,433.99 Taxes payable 131,111,770.78 131,111,770.78 Other payables 9,479,383.03 9,479,383.03 Non-current liabilities due 699,372,590.26 699,372,590.26 within one year Other current liabilities 147,765,156.66 147,765,156.66 Total current liabilities 10,039,076,785.87 10,738,449,376.13 699,372,590.26 Non-current liabilities: Lease liabilities 632,866,068.34 632,866,068.34 Deferred tax liabilities 104,677,444.59 104,677,444.59 Total non-current liabilities 104,677,444.59 737,543,512.93 632,866,068.34 Total liabilities 10,143,754,230.46 11,475,992,889.06 1,332,238,658.60 Owners' equity: Share capital 103,807,623.00 103,807,623.00 Capital reserve 1,225,481,049.50 1,225,481,049.50 Other comprehensive income 30,000,000.00 30,000,000.00 Surplus reserves 45,000,000.00 45,000,000.00 Undistributed profits 2,870,839,120.70 2,870,839,120.70 Total owners' equity attributable 4,275,127,793.20 4,275,127,793.20 to parent company Minority shareholder interests -31,996.39 -31,996.39 Total owners’ equity 4,275,095,796.81 4,275,095,796.81 Total liabilities and owners’ 14,418,850,027.27 15,751,088,685.87 1,332,238,658.60 equity Explanation on the adjustments According to the "Notice on Revising and Issuing the "Accounting Standards for Business Enterprises No. 21-Leases" issued by the Ministry of Finance in December 2018 (F&A [2018] No. 35), the Company will disclose accounting statements according to the requirements of the new lease standards from January 1, 2021 Balance sheet of the parent company Unit: RMB Items December.31, 2020 January 1, 2021 Adjustment Current Assets: Monetary funds 56,138,356.37 56,138,356.37 42 Offcn Education Technology Co., Ltd. First Quarter 2021 Report Transactional financial assets 1,630,453.37 1,630,453.37 Accounts receivable 14,792,320.38 14,792,320.38 Other receivables 621,900,443.29 621,900,443.29 Total current assets 694,461,573.41 694,461,573.41 Non-current assets: Long-term equity investments 18,582,307,907.14 18,582,307,907.14 Other equity investment 152,800,000.00 152,800,000.00 Investment property 502,925,481.92 502,925,481.92 Fixed assets 383,060,000.00 383,060,000.00 Construction in progress 72,569,103.57 72,569,103.57 Deferred tax assets 20,529,151.44 20,529,151.44 Other non-current assets 501,095,111.10 501,095,111.10 Total non-current assets 20,215,286,755.17 20,215,286,755.17 Total assets 20,909,748,328.58 20,909,748,328.58 Current liabilities: Short-term loan 871,083,875.00 871,083,875.00 Accounts payable 83,621,752.26 83,621,752.26 Taxes payable 1,437,291.71 1,437,291.71 Other payables 446,606,530.72 446,606,530.72 Total current liabilities 1,402,749,449.69 1,402,749,449.69 Non-current liabilities: Deferred tax liabilities 10,007,613.34 10,007,613.34 Total non-current liabilities 10,007,613.34 10,007,613.34 Total liabilities 1,412,757,063.03 1,412,757,063.03 Owners’ equity: Share capital 6,167,399,389.00 6,167,399,389.00 Capital reserve 12,897,744,700.46 12,897,744,700.46 Other comprehensive income 30,000,000.00 30,000,000.00 Surplus reserves 387,458,806.65 387,458,806.65 Undistributed profits 14,388,369.44 14,388,369.44 Total owners’ equity 19,496,991,265.55 19,496,991,265.55 Total liabilities and owners’ 20,909,748,328.58 20,909,748,328.58 equity Descriptions of adjustments None 43 Offcn Education Technology Co., Ltd. First Quarter 2021 Report 2. Description of retroactive adjustment of comparative data in the early stage by the new lease standard initially implemented since 2021 □ Applicable √ Not Applicable Section III. Auditor’s report Whether this First Quarter 2021 Report has been audited □ Yes √ No The Company’s First Quarter 2021 Report has not been audited. 44