Due
to the outbreak of coronavirus disease 2019 (COVID-19), DPW Holdings, Inc. (the “Company”) is filing this current
report on Form 8-K to avail itself of an extension to file its Annual Report on Form 10-K for the period ended December 31, 2019
(the “Annual Report”), originally due on March 30, 2020, relying on an order issued by the Securities and Exchange
Commission (the “SEC”) on March 4, 2020 pursuant to Section 36 of the Securities Exchange Act of 1934, as amended
(Release No. 34-88318) (the “Order”) regarding exemptions granted to certain public companies.
The
Company’s operations and business have experienced disruption due to the unprecedented conditions surrounding the COVID-19
pandemic spreading throughout the United States and the world and thus the Company’s business operations have been disrupted
and it is unable to timely review and prepare the Company’s financial statements for the 2019 fiscal year.
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”. Our
operations are located in Alameda County, CA, Orange County, CA, Fairfield County, CT, the United Kingdom, Israel and members of
our senior management work in Seattle, WA and New York, NY, which is also the location of the offices of the Company’s
independent auditor. The Company has been following the recommendations of local health authorities
to minimize exposure risk for its employees for the past several weeks, including the temporary closures of its offices and having
employees work remotely to the extent possible, which has to an extent adversely affected their efficiency.
As a result, the Company’s books and records were not easily accessible, resulting in delays in preparation and completion
of its financial statements. Further, the various governmental mandatory closures of businesses in these locations have precluded
the Company’s personnel, particularly its senior accounting staff, from obtaining access to its subsidiaries’ books
and records necessary to prepare the Company’s financial statements that, once audited, comprise the essence of the Annual
Report.
As
such, the Company will be relying upon the 45-day grace period provided by the SEC’s Order to delay filing of its Annual
Report. The Company will file its Annual Report by no later than May 14, 2020, 45 days after the original due date of its Annual
Report.
On
March 18, 2020, the Company issued a press release announcing that, due to government imposed restrictions resulting from the COVID-19
virus outbreak, it has experienced a significant impact on its business. A copy of the press release is attached hereto as Exhibit
99.1 and is incorporated herein by reference.
The
Company is supplementing its risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2018 and its subsequent Quarterly Reports on Form 10-Q with the following risk factors:
We face business
disruption and related risks resulting from the recent outbreak of the novel coronavirus 2019 (“COVID-19”), which could
have a material adverse effect on our business and results of operations.
Our business has been disrupted and materially
adversely affected by the recent outbreak of COVID-19. As a result of measures imposed by the governments in affected regions,
businesses and schools have been suspended due to quarantines intended to contain this outbreak and many people have been forced
to work from home in those areas. The spread of COVID-19 from China to other countries has resulted in the Director General of
the World Health Organization declaring the outbreak of COVID-19 as a Public Health Emergency of International Concern (PHEIC),
based on the advice of the Emergency Committee under the International Health Regulations (2005), and the Centers for Disease Control
and Prevention in the U.S. issued a warning on February 25, 2020 regarding the likely spread of COVID-19 to the U.S. While the
COVID-19 outbreak is still in very early stages, international stock markets have begun to reflect the uncertainty associated with
the slow-down in the American, Israeli and UK economies and the reduced levels of international travel experienced since the beginning
of January and the significant decline in the Dow Industrial Average at the end of February 2020 was largely attributed to the
effects of COVID-19. We are still assessing our business operations and system supports and the impact COVID-19 may have on our
results and financial condition, but there can be no assurance that this analysis will enable us to avoid part or all of any impact
from the spread of COVID-19 or its consequences, including downturns in business sentiment generally or in our sectors in particular.
Cautionary Note
Regarding Forward-Looking Statements
Certain
of the statements contained in this report should be considered forward-looking statements. These forward-looking statements may
be identified by words such as “may,” “will,” “expect,” “intend,” “anticipate,”
“believe,” “estimate,” “plan,” “project,” “could,” “should,”
“would,” “continue,” “seek,” “target,” “guidance,” “outlook,”
“if current trends continue,” “optimistic,” “forecast” and other similar words. Such statements
include, but are not limited to, statements about the Company’s plans, objectives, expectations, intentions, estimates and
strategies for the future, and other statements that are not historical facts. These forward-looking statements are based on the
Company’s current objectives, beliefs and expectations, and they are subject to significant risks and uncertainties that
may cause actual results and financial position and timing of certain events to differ materially from the information in the forward-looking
statements. These risks and uncertainties include, but are not limited to, those set forth in the Company’s Annual Report
on Form 10-K for the year ended December 31, 2018 (especially in Part I, Item 1A. Risk Factors and Part II, Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations), and other risks and uncertainties listed from time to
time in the Company’s other filings with the SEC. There may be other factors of which the Company is not currently aware
that may affect matters discussed in the forward-looking statements and may also cause actual results to differ materially from
those discussed. In addition, there is uncertainty about the spread of the COVID-19 virus and the impact it may have on the Company’s
operations, the demand for the Company’s products or services, global supply chains and economic activity in general. The
Company does not assume any obligation to publicly update or supplement any forward-looking statement to reflect actual results,
changes in assumptions or changes in other factors affecting these forward-looking statements other than as required by law. Any
forward-looking statements speak only as of the date hereof or as of the dates indicated in the statement.