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Increasing scrutiny and evolving expectations from customers, educator partners, regulators, investors, and other stakeholders with respect to our
environmental, social, and governance (“ESG”) practices may impose additional costs on us, expose us to new or additional risks, or harm our reputation.
Companies are facing increasing scrutiny from customers, partners, regulators, investors, and other stakeholders related to their ESG practices and disclosures.
Investor advocacy groups, investment funds, and influential investors are also increasingly focused on these practices, especially as they relate to the
environment, health and safety, diversity, labor conditions, and human rights. Increased ESG related compliance costs could result in increases to our overall
operational costs. Failure to adapt to or comply with regulatory requirements or investor, employee or stakeholder expectations and standards could negatively
impact our reputation, ability to do business with certain educator partners, and the price of our common stock. New government regulations could also result
in new or more stringent forms of ESG oversight and expanding mandatory and voluntary reporting, diligence, and disclosure. Collecting, measuring, and
reporting ESG information and metrics can be costly, difficult and time consuming, and can present numerous operational, reputational, financial, legal and
other risks, any of which could have a material impact on us, including on our reputation and stock price. Inadequate processes to collect and review this
information prior to disclosure could subject us to potential liability related to such information. Furthermore, several U.S. states have enacted or proposed
“anti-ESG” policies or legislation. While these policies and related legislation are generally targeted to investment advisory firms and mutual funds, if these
investors viewed our ESG practices as contradicting such “anti-ESG” policies, such investors may not invest in the Company and it could negatively affect the
price of our common stock.
Our current ESG disclosures, including the metrics we set as a PBC and other any standards we may set for ourselves, or a failure to meet these metrics or
standards, may influence our reputation and the value of our brand. For example, we have elected to share publicly certain information about our ESG
initiatives and information, and our commitment to the recruitment, engagement, and retention of a diverse workforce. Our business may face increased
scrutiny related to these activities, including from the investment community, and our failure to achieve progress in these areas on a timely basis, or at all, could
impact our ability to hire and retain employees, increase our educator partner base, reelect our board of directors, or attract and retain certain types of investors,
which could adversely affect our reputation, business, and financial performance.
Climate change may have an adverse impact on our business.
Risks related to rapid climate change may have an increasingly adverse impact on our business and those of our customers, educator partners, and learners in
the longer term. Any of our primary locations and the locations of our customers, educator partners, and learners may be vulnerable to the adverse effects of
climate change. For example, our California headquarters has historically experienced, and is projected to continue to experience, climate-related events at an
increasing frequency, including drought, water scarcity, floods, heat waves, wildfires and resultant air quality impacts, and power shut-offs associated with
wildfire prevention. Furthermore, it is more difficult to mitigate the impact of these events on our employees while they work from home. Changing market
dynamics, global policy developments, and the increasing frequency and impact of extreme weather events on critical infrastructure in the U.S. and elsewhere
have the potential to disrupt our business and the business of our customers, educator partners, and learners, and may cause us to experience higher attrition,
losses, and additional costs to maintain our operations. Further, the effects of climate change may negatively impact regional and local economic activity,
which could lead to an adverse effect on our customers, educator partners, and learners and impact the communities in which we operate. Overall, climate
change, its effects, and the resulting, unknown impact could have a material adverse effect on our financial condition and results of operations.
We are a remote-first company, which could have a negative impact on the execution of our business plans and operations and create productivity,
connectivity, and oversight challenges.
We are a remote-first company, allowing for almost all roles to be open to remote employees on an ongoing basis. Our remote-first employment policy could
have a negative impact on the execution of our business plans and operations and create productivity, connectivity, and oversight challenges. For example, if a
natural disaster, power outage, connectivity issue, or other event occurred that impacted our employees’ ability to work remotely, it may be difficult for us to
continue our business for a period of time. The shift to remote working may also result in consumer privacy, IT security, and fraud vulnerabilities, which, if
exploited, could result in significant recovery costs and harm to our reputation. Operating in a predominantly remote work environment and providing and
maintaining the operational infrastructure necessary to support a remote work environment also present significant challenges to maintaining our company
culture, including employee engagement and productivity. As a result, our culture, information technology requirements, cybersecurity risk, and business
operations could be adversely affected.
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