Item 8.01 Other Events.
ChinaNet Online Holdings, Inc. (the “Company”) is filing
this Current Report on Form 8-K as a condition to seeking relief provided by the Securities and Exchange Commission (SEC) Order
under Section 36 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), granting exemptions
from specified provisions of the Exchange Act, as set forth in SEC Release No. 34-88318 (the “Order”). By filing this
Current Report on Form 8-K, the Company is relying on the Order to receive an additional 45 days to file its Annual Report on
Form 10-K for the fiscal year ended December 31, 2019 (the “10-K”). The 10-K would have been due on March 30, 2020.
With this extension the Company expects to file the 10-K on or before May 14, 2020.
The Company conducts its business operations in China, primarily
in two cities, Beijing and Xiaogan City, Hubei Province. Xiaogan City is located approximately 70 kilometers from WuHan, the provincial
capital of Hubei Province which was the critical epicenter of the COVID-19 outbreak. In accordance with the epidemic control measures
imposed by the local governments since February 2020, the Company, along with most other business entities in Xiaogan City and
Beijing remained closed after the Chinese New Year holiday (January 24-February 2, 2020). As a result, the Company’s accounting
and other staff, who are instrumental in the annual closing and audit process, have been unable to come to work. The Company’s
Beijing office partially re-opened on March 10, 2020 but its Xiaogan City office is not expected to be re-opened until April 1,
2020.
Normally, the Company commences its annual closing and audit preparation
work in January, which includes, among other things, preliminary and then final closing of each subsidiary’s ledger, preparation
of consolidated financial statements, as well as reconciliation of account balances and/or transaction amounts with suppliers,
customers and commercial banks. Following that, the Company’s auditors would perform their audit procedures including, but
not limited to, obtaining confirmations directly from such parties. However, due to control measures having been put in place by
the local government of different cities in China, some of the branches of the commercial banks in Beijing and all the branches
of the commercial banks in Xiaogan City, where the Company has accounts, were not opened and did not fully resume operations until
recently in mid-March. Our suppliers and customers have limited staff to respond to the reconciliation process and auditors’
confirmations, and the delivery services have not fully resumed operations, especially in high risk cities, such as Xiaogan City,
all of which have resulted in a delay of the Company’s standing audit related works, including a delay in the return by mail
of confirmations directly to the Company’s auditors, in accordance with the standards
of the Public Company Accounting Oversight Board (United States). In addition, the principal office of the Company’s
auditors is located in Hong Kong Special Administrative Region of PRC (the “HKSAR”), and the local control measures
and quarantine policies imposed by both mainland China and the HKSAR also delayed the auditors’ on-site audit arrangements
in the Company’s operational offices. As a result, all of the above consequences and chain reactions derived from the COVID-19
outbreak have adversely affected the efficiency of the Company’s annual audit and the overall timeline of the Company’s
preparation of the 10-K to be filed with the SEC.
The Company has taken all possible measures to overcome the adverse
impact derived from the COVID-19 outbreak related to the annual audit and filing of the 10-K. To the best of the Company’s
knowledge, despite the challenge of the slow recovery to normal operations under various restrictions, the Company believes that
it will be able to complete the annual audit and file the 10-K within the additional 45 days granted by the Order on or before
May 14, 2020.
The Company supplements the following risk factor due to the uncertainty
of the COVID-19 outbreak:
We are susceptible to general economic conditions, natural catastrophic
events and public health crises, and a potential downturn in advertising and marketing spending by advertisers could adversely
affect our operating results in the near future.
Our business is subject to the impact of natural catastrophic events,
such as earthquakes, or floods, public health crisis, such as disease outbreaks, epidemics, or pandemics in China, and all these
could result in a decrease or sharp downturn of economies, including our markets and business locations in the current and future
periods. The outbreak of the coronavirus (COVID-19) in China resulted in increased travel restrictions, and shutdown
of businesses, which may cause slower recovery of the China economy. We may experience impact from quarantines, market downturns
and changes in customer behavior related to pandemic fears and impact on our workforce if the virus continues to spread. COVID-19
affected a significant number of our workforce employed in our operations, and as a result we are experiencing a slow resumption
of operations and may experience delays or the inability to delivery our service on a timely basis. In addition, one or more of
our customers, partners, service providers or suppliers may experience financial distress, delayed or defaults on payment, file
for bankruptcy protection, sharp diminishing of business, or suffer disruptions in their business due to the outbreak. The extent
to which the coronavirus impacts our results will depend on future developments and reactions in China, 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. It is likely to result in a potential material adverse impact on our business,
results of operations and financial condition in the short run if the situation has gotten worse in China. Wider-spread COVID-19
in China and globally could prolong the deterioration in economic conditions and could cause decreases in or delays in advertising
spending and reduce and/or negatively impact our short-term ability to grow our revenues. Any decreased collectability of accounts
receivable, bankruptcy of small and medium businesses, or early termination of agreements due to deterioration in economic conditions
could negatively impact our results of operations
Forward-Looking Statements
Certain of the statements contained in this report should be considered
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities
Exchange Act of 1934, which can be identified by the use of forward-looking terminology such as "believes," "expects,"
"anticipates," "estimates" or similar expressions. These statements relate to future events or the Company’s
future financial performance. These forward-looking statements are based on the Company’s current expectations and beliefs
concerning future developments of the COVID-19 outbreak and their potential effects on the Company. There can be no assurance that
future developments of the COVID-19 outbreak affecting the Company will be those anticipated. These forward-looking statements
involve a number of risks, uncertainties (some of which are beyond the control of the Company) or other assumptions that may cause
actual results or performance to be materially different from those expressed or implied by such forward-looking statements. The
Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required under applicable securities laws.