Due
to the outbreak of coronavirus disease 2019 (“COVID-19”), we are filing this Current Report on Form 8-K to avail ourselves
of an extension to file our Quarterly Report on Form 10-Q for the period ended February 29, 2020 (the “Quarterly Report”),
originally due by April 14, 2020, relying on an order issued by the Securities and Exchange Commission (the “SEC”)
on March 25, 2020 pursuant to Section 36 of the Securities Exchange Act of 1934, as amended (Release No. 34-88465) (the “Order”)
regarding exemptions granted to certain public companies.
The COVID-19
pandemic has caused severe disruptions in transportation and limited access to our facilities resulting in limited support from
our staff and professional advisors. This has, in turn, delayed our ability to complete our audit and prepare the Quarterly Report.
As such, we will be relying upon the 45-day grace period provided by the Order to delay filing our Quarterly Report. We will file
our Quarterly Report by no later than May 29, 2020, 45 days after the original due date of our Quarterly Report.
We are supplementing
our risk factors previously disclosed in our Annual Report on Form 10-K for the year ended August 31, 2019 (“Annual Report”)
with the following risk factor:
Our business, results of operations
and financial condition has been and may continue to be materially adversely impacted by public health epidemics, including the recent
coronavirus outbreak.
Our business, results of operations and
financial condition has been, and may continue to be, materially adversely impacted by public health epidemics, including the
recent outbreak of respiratory illness caused by a novel coronavirus disease (“COVID-19”) first identified in Wuhan,
China in December 2019. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic disease. Potential impacts
of the spread of COVID-19 include disruptions or restrictions on our employees’ and worksite employees’ ability to
travel and temporary closures of the facilities of our clients. For example, many of our worksite employees perform services in
the restaurant and hospitality industries, and since early March 2020, there has been significant decline in restaurant and hotel
traffic. Government agencies have since declared a state of emergency in the U.S., and some have restricted movement, required
restaurant, bar and hotel closures, and advised people not to visit restaurants or bars and otherwise restrict non-essential travel.
In some jurisdictions, people have been instructed to shelter in place to reduce the spread of COVID-19, in response to which
restaurants have temporarily closed and have shifted operations at others to provide only take-out and delivery service. Travel
and tourism across the globe has significantly decreased, in response to which hotels have temporarily closed and furloughed employees.
All of these developments and similar developments that have occurred as a result of the spread of COVID-19 negatively affect
our clients and the ability of our worksite employees to perform services. As a result, we expect our results of operations to
continue to be materially and negatively affected by these actions.
Additionally, our headquarters are located
in Irvine, CA in Orange County, a region that has seen a recent rise of confirmed cases of COVID-19. We are continuing to monitor
and assess the effects of the COVID-19 outbreak on our commercial operations, including any potential impact on our revenue in
2020. However, we cannot at this time accurately predict what effects these conditions will ultimately have on our operations
due to uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the duration of the
outbreak, and the length of the travel restrictions and business closures imposed by the governments of impacted countries. In
addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that
could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect
demand for our products and likely impact our operating results.
Forward-Looking Statements
This Current Report on Form 8-K (the “Form
8-K”) and the press release attached hereto include forward-looking statements, which may be identified by words such as
“believes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,”
“should,” “seeks,” “future,” “continue,” or the negative of such terms, or other
comparable terminology. Forward-looking statements are statements that are not historical facts. Such forward-looking statements
are subject to risks and uncertainties, which could cause actual results to differ materially from the forward-looking statements
contained herein. The forward looking statements in this Form 8-K and the press release attached hereto constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995. There are a number of important factors
that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including,
but not limited to, the risks and uncertainties and other factors discussed from time to time in our filings with the Securities
and Exchange Commission (“SEC”), including our Annual Report filed with the SEC on December 13, 2019. We expressly
disclaim any obligation to publicly update any forward-looking statements contained herein, whether as a result of new information,
future events or otherwise, except as required by law.