Item
8.01 Other Events.
DATA443 RISK MITIGATION,
INC. (the “Company”) is providing the following update on its business operations. As result of the global outbreak
of the COVID-19 virus, on April 14, 2020 the Company evaluated its ongoing effort to prepare and file its Annual Report on Form
10-K for the fiscal year ended December 31, 2019 (the “2019 10-K”).
Certain
Company officers and management, as well as professional staff and consultants, are unable to conduct work required to prepare
our financial report for the year ended December 31, 2019. As a result, the Company expects to be unable to compile and review
certain information required in order to permit the Company to file a timely and accurate 2019 10-K by the prescribed date without
unreasonable effort or expense due to circumstances related to COVID-19.
The
Company will be relying on the Securities and Exchange Commission’s Order under Section 36 of the Securities Exchange Act
of 1934 Granting Exemptions From Specified Provisions of the Exchange Act and Certain Rules Thereunder dated March 25, 2020 (Release
No. 34-88465) (the “Order”) to delay the filing of its 2019 10-K due to the circumstances related to COVID-19. In
particular, COVID-19 has caused disruptions in our normal interactions with our auditors. The Company has a small accounting staff
and historically we provided our auditors with full access to work papers and related information. Because the audit personnel
are now working remotely as much as possible as are our accounting personnel, this has slowed everyone’s workflow and the
Company’s ability to complete its audit and file the 2019 10-K prior to its due date is delayed. Notwithstanding the foregoing,
the Company expects to file the 2019 10-K no later than May 14, 2020 (which is 45 days from the 2019 10-K’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 2019 10-K, as may be updated
to reflect subsequent events impacting the Company:
Adverse
or uncertain macroeconomic or geopolitical conditions or reduced IT spending may adversely impact our business, revenues and profitability.
Our
business, operations and performance are dependent in part on worldwide economic conditions and events that may be outside of
our control, such as political and social unrest, terrorist attacks, hostilities, malicious human acts, climate change, natural
disasters (including extreme weather), pandemics or other major public health concerns and other similar events, and the impact
these conditions and events have on the overall demand for enterprise computing infrastructure solutions and on the economic health
and general willingness of our current and prospective end customers to purchase our solutions and to continue spending on IT
in general. The global macroeconomic environment has been, and may continue to be, inconsistent, challenging and unpredictable
due to international trade disputes, tariffs, including those recently imposed by the U.S. government on Chinese imports to the
U.S., restrictions on sales and technology transfers, uncertainties related to changes in public policies such as domestic and
international regulations, taxes, or international trade agreements, elections, geopolitical turmoil and civil unrests, instability
in the global credit markets, uncertainties regarding the effects of the United Kingdom’s separation from the European Union,
commonly known as “Brexit”, actual or potential government shutdowns, and other disruptions to global and regional
economies and markets. Specifically, the recent and developing outbreak of a respiratory illness caused by the 2019 novel coronavirus
that was named by the World Health Organization as COVID-19 (collectively with any future mutations or related strains thereof,
“COVID-19”) has caused and may continue to cause travel bans or disruptions, supply chain delays and disruptions,
and additional macroeconomic uncertainty. The impact of COVID-19 is fluid and uncertain, but it has caused and may continue to
cause various negative effects, including an inability to meet with actual or potential customers, our end customers deciding
to delay or abandon their planned purchases, us to delay, cancel, or withdraw from user and industry conferences and other marketing
events, and delays or disruptions in our or our OEM partners’ supply chains, including delays or disruptions in procuring
and shipping the hardware appliances on which our software solutions run. As a result, we may experience extended sales cycles,
our ability to close transactions with new and existing customers and partners may be negatively impacted, potentially significantly,
our ability to recognize revenue from software transactions we do close may be negatively impacted, potentially significantly,
our demand generation activities, and the efficiency and effect of those activities, may be negatively affected, our ability to
provide 24x7 worldwide support and/or replacement parts to our end customers may be effected, and it has been and, until the COVID-19
outbreak is contained, will continue to be more difficult for us to forecast our operating results. These macroeconomic challenges
and uncertainties, including the COVID-19 outbreak, have, and may continue to, put pressure on global economic conditions and
overall IT spending and may cause our end customers to modify spending priorities or delay or abandon purchasing decisions, thereby
lengthening sales cycles and potentially lowering prices for our solutions, and may make it difficult for us to forecast our sales
and operating results and to make decisions about future investments, any of which could materially harm our business, operating
results and financial condition.
Cautionary
Note Regarding Forward-Looking Statements
This
Current Report on Form 8-K contains statements as to the Company’s beliefs and expectations of the outcome of future events
that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. You can identify these
statements by the fact that they do not relate strictly to historical or current facts. Examples of these statements include,
but are not limited to, statements regarding the anticipated impact of the COVID-19 outbreak on travel and physical locations,
the anticipated impact of such outbreak on our results of operations, and possible effect of the postponement and cancellation
of trade shows and events on our overall revenues. These forward- looking statements are subject to risks and uncertainties that
could cause actual results to differ materially from the statements made. These risks and uncertainties include, but are not limited
to, the effects of the COVID- 19 outbreak. The duration of the COVID-19 outbreak and severity of such outbreak; the pace of recovery
following the COVID-19 outbreak; the effect on our clients, customers, and suppliers; our ability to implement cost containment
and business recovery strategies; and, the adverse effects of the COVID-19 outbreak on our business or the market price of our
common stock and the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2018, and our subsequent
filings with the U.S. Securities and Exchange Commission, including subsequent quarterly reports on Forms 10-Q and current reports
on Form 8-K, are uncertain. Except as required by law, the Company does not undertake any obligation to release publicly any revisions
to forward-looking statements made by it to reflect events or circumstances occurring after the date hereof or the occurrence
of unanticipated events.