Item 8.01 Other
Events.
Future FinTech Group, Inc. (the “Company”)
will be relying on the Securities and Exchange Commission’s Order under Section 36 of the Securities Exchange Act of 1934
Modifying Exemptions From the Reporting and Proxy Delivery Requirements for Public Companies dated March 25, 2020 (Release No.
34-88465) (the “Order”) to delay the filing of its Annual Report on Form 10-K for the year ended December 31, 2019
(the “Report”) due to circumstances related to COVID-19.
In December 2019, a novel strain of coronavirus
was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world,
including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease
(COVID-19) a “Public Health Emergency of International Concern,” and on March 11, 2020, the World Health Organization
characterized the outbreak as a “pandemic”. Xi’an City, where our headquarters are located, is one of the most
affected areas in China. The Company has been following the orders of local government and health authorities to minimize exposure
risk for its employees, including the closures of its offices and having employees work remotely from January of 2020 until recently.
As a result, the Company’s books and records were not easily accessible, resulting in a delay in the preparation, audit and
completion of the Company’s financial statements for the Report. The Company expects to file the Report no later than May
14, 2020 (which is 45 days from the Report’s original filing deadline of March 30, 2020).
In light of the current COVID-19 pandemic,
the Company will be including the following Risk Factor in its Report:
An occurrence of an uncontrollable event
such as the COVID-19 pandemic may negatively affect our operations and financial results.
In recent years, there have been outbreaks
of epidemics in various countries, including China. Recently, there was an outbreak of a novel strain of coronavirus (COVID-19)
in China, which has spread rapidly to many parts of the world, including the U.S. In March 2020, the World Health Organization
declared COVID-19 a pandemic. The epidemic has resulted in quarantines, travel restrictions, and the temporary closure of office
buildings and facilities in China and in the U.S.
Substantially all of our revenues are
generated in China. Consequently, our results of operations will likely be adversely, and may be materially, affected, to the extent
that COVID-19 or any other epidemic harms the Chinese and global economy. Any potential impact to our results will depend on, to
a large extent, future developments and new information that may emerge regarding the duration and severity of COVID-19 and the
actions taken by government authorities and other entities to contain COVID-19 or treat its impact, almost all of which are beyond
our control. Potential impacts include, but are not limited to, the following:
|
|
•
|
temporary closure
of offices, travel restrictions or suspension of transportation of our products to our customers and our suppliers have been
negatively affected, and could continue to be negatively affected, on their ability to supply our demands;
|
|
|
•
|
our customers that are negatively impacted by the outbreak of COVID-19 may reduce their budgets to purchase our products and services, which may materially adversely impact our revenue;
|
|
|
•
|
We may have to provide significant sales incentives to our customers in response to the outbreak, which may in turn materially adversely affect our financial condition and operating results;
|
|
|
•
|
the business operations of our customers and suppliers have been and could continue to be negatively impacted by the outbreak, result in loss of customers or disruption of our services, which may in turn materially adversely affect our financial condition and operating results;
|
|
|
•
|
any disruption of our supply chain, logistics providers or customers could adversely impact our business and results of operations, including causing our suppliers to cease manufacturing products for a period of time or materially delay delivery to customers, which may also lead to loss of customers, as well as reputational, competitive and business harm to us;
|
|
|
•
|
many of our customers, distributors, suppliers and other partners are individuals and small and medium-sized enterprises (SMEs), which may not have strong cash flows or be well capitalized, and may be vulnerable to an epidemic outbreak and slowing macroeconomic conditions. If the SMEs that we work with cannot weather COVID-19 and the resulting economic impact, or cannot resume business as usual after a prolonged outbreak, our revenues and business operations may be materially and adversely impacted;
|
|
|
•
|
the global stock markets have experienced, and may continue to experience, significant decline from the COVID-19 outbreak, which could materially adversely affect our stock price; and
|
Because of the uncertainty surrounding
the COVID-19 outbreak, the financial impact related to the outbreak of and response to the coronavirus cannot be reasonably estimated
at this time, but our results for the first quarter and full year of 2020 may be adversely affected.
In general, our business could be adversely
affected by the effects of epidemics, including, but not limited to, COVID-19, avian influenza, severe acute respiratory syndrome
(SARS), the influenza A virus, the Ebola virus, or other outbreaks. In response to an epidemic or other outbreaks, government
and other organizations may adopt regulations and policies that could lead to severe disruption to our daily operations, including
temporary closure of our offices and other facilities. These severe conditions may cause us and/or our partners to make internal
adjustments, including but not limited to, temporarily closing down business, limiting business hours, and setting restrictions
on travel and/or visits with clients and partners for a prolonged period of time. Various impacts arising from severe conditions
may cause business disruption, resulting in material, adverse effects to our financial condition and results of operations.