Item 8.01. Other Events.
Umatrin Holding Limited (the "Company") is providing the following update on the
filing of its Form 10-K for the year ended December 31, 2019. As a result of the
global outbreak of the COVID-19, starting in China at the end of January 2020,
subsequently spreading to Malaysia and other parts of the world, the Company is
unable to meet the filing deadline of the Form 10-K as the Company's operation
is conducted in Malaysia. In order to avoid the risk of the virus spreading, the
Malaysia government required enterprises to delay the resumption of work and
production. The local Malaysia government issued a movement control order
starting March 18, 2020 till March 31, 2020, which was subsequently extended to
April 14, 2020. During the above period, all businesses are closed and cannot
operate as usual. The Company has been following the recommendations of local
health authorities to minimize exposure risk for its team members for the past
several weeks, including the temporary closures of its offices and having team
members work remotely, and, as a result, the Annual Report will not be completed
by the filing deadline, due to insufficient time to facilitate the internal and
external review process.
Such delay also directly caused a delay in completing the on-site audit by the
Company's independent public accountant, JLKZ CPA LLP, whose staff engaged in
the audit of the Company's financial statements and preparation of the
accompanying audit report would no longer be present at the Company's facilities
as a result of the COVID-19 virus.
In accordance with the order (the "Order") promulgated by the Securities and
Exchange Commission on March 4, 2020 in Release No. 34-88318 relating to the
Securities Exchange Act of 1934, as amended, the Company currently expects to
file its Annual Report on Form 10-K approximately 45 days after March 30, 2020,
which shall be no later than May 14, 2020. The Company will evaluate its need
for an additional extension under Rule 12b-25 at that time, as contemplated by
the Order.
The Company is supplementing the risk factors explaining the impact of COVID-19
on its business:
We are susceptible to general economic conditions, natural catastrophic events
and public health crises, and a downturn in advertising and marketing spending
by advertisers could adversely affect our operating results.
Our operating results will be subject to fluctuations based on general economic
conditions, in particular those conditions that impact health and beauty care
products industry. Deterioration in economic conditions could cause decreases in
both retail and wholesale trade volume and reduce and/or negatively impact our
short-term ability to grow our revenues. Further, any decreased collectability
of accounts receivable or early termination of agreements due to deterioration
in economic conditions could negatively impact our results of operations.
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Furthermore, our business is subject to the impact of natural catastrophic
events such as earthquakes, floods or power outages, political crises such as
terrorism or war, and public health crises, such as disease outbreaks,
epidemics, or pandemics in the U.S. and global economies, our markets and
business locations. Currently, the rapid spread of coronavirus (COVID-19)
globally has resulted in increased travel restrictions and disruption and
shutdown of businesses. We may experience impacts from quarantines, market
downturns and changes in customer behavior related to pandemic fears and impacts
on our workforce if the virus becomes widespread in any of our markets. If the
virus were to affect a significant number of our workforce employed in our
distribution operations, especially direct contact distribution channels, we may
experience delays or the inability to deliver our products to customers on a
timely basis. In addition, we rely on third-party contract manufacturers and
suppliers to obtain substantially all raw materials, components and packaging
products; if the ongoing quarantining measures cause delays along our supply
chain, we will likely experience manufacture slow-down for the indefinite
future. One or more of our customers, distribution partners, service providers
or suppliers may experience financial distress, file for bankruptcy protection,
go out of business, or suffer disruptions in their business due to the
coronavirus outbreak. The extent to which the coronavirus impacts our results
will depend on future developments, which are highly uncertain and will include
emerging information concerning the severity of the coronavirus and the actions
taken by governments and private businesses to attempt to contain the
coronavirus, but is likely to result in a material adverse impact on our
business, results of operations and financial condition at least for the near
term.
Forward-Looking Statements
Statements in this Current Report on Form 8-K are "forward-looking statements"
as the term is defined under applicable securities laws. These statements
include the anticipated timing of the filing of Company's quarterly and annual
statements under the Exchange Act; the expected impact of the COVID-19 virus
outbreak on the Company's financial reporting capabilities and its operations
generally and the potential impact of such virus on the Company's customers,
distribution partners, advertisers and production facilities and other third
parties. These and other forward-looking statements are subject to risks,
uncertainties and other factors that could cause actual results to differ
materially from those statements. Such risks and uncertainties are, in many
instances, beyond the Company's control. Forward-looking statements, which are
presented as of the date of this filing, will not be updated to reflect events
or circumstances after the date of this statement except as required by law.
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