ECMOHO Limited (Nasdaq: MOHO) (“ECMOHO” or the “Company”) is
relying on the order issued by the U.S. Securities and Exchange
Commission (the “Commission”) on March 25, 2020,
providing conditional relief to registrants subject to the
reporting requirements of the U.S. Securities Exchange Act of 1934
Section 13(a) or 15(d) that are unable to meet a filing deadline
due to circumstances related to the novel coronavirus disease
(“COVID-19”) pandemic (Release No. 34-88465) (the “Order”) to delay
the filing of its Annual Report on Form 20-F for the year ended
December 31, 2019.
The Company recognizes that the COVID-19
pandemic continues to be a significant and rapidly evolving public
health emergency around the world with unprecedented adverse
impacts across industries and on global economic activity. As
a result of the COVID-19 pandemic and the containment measures and
restrictions implemented by the Chinese government since
late-January 2020, the Company was unable to resume normal business
operations at its corporate headquarters in Shanghai until the
middle of March 2020. As a result, the Company’s finance team
is unable to complete the preparation of the Company’s consolidated
financial statements and the Company’s Annual Report on Form 20-F
until after April 30, 2020.
In reliance on the Order, the Company intends to
file its Annual Report on Form 20-F for the year ended December 31,
2019, with the Commission on or before June 14, 2020, which is 45
days from the original filing deadline of April 30, 2020.
In light of the ongoing COVID-19 pandemic, the
Company hereby supplements the risk factors previously disclosed in
its registration statement on Form F-1, as amended (Registration
No. 333-233951) with the following risk factor:
The Company’s business, financial
position, liquidity and results of operations have been, and are
likely to continue to be, adversely affected by the COVID-19
pandemic.
The outbreak of a novel strain of coronavirus
that causes the disease now known as COVID-19, was first identified
in Wuhan, China, in December 2019. Since late-January 2020,
the Chinese government has imposed a series of strict and
protracted containment measures, including lock-downs across the
Hubei province and in many other parts of the country.
Despite these efforts, the disease has continued to spread globally
and, in March 2020, the World Health Organization declared the
COVID-19 outbreak a pandemic and recommended the implementation of
containment and mitigation measures worldwide.
Governments across the globe have responded to
contain the spread and reduce the risk of exposure to infection
through international travel restrictions, lock-downs of cities and
wider regions, business closures and strict social distancing
measures. In China, as of late-April 2020, such measures
appear to have successfully contained the spread of the virus, with
restrictions now being lifted across the country and businesses
resuming operations. While other parts of the world are
showing increased control over the spread of the virus, substantial
uncertainty surrounding the duration of existing restrictions
remain.
The COVID-19 pandemic and the associated efforts
to contain the spread of the disease have caused unprecedented
disruptions to the global economy, impacted business operations
across many industries and geographies and created significant
volatility and uncertainty, all of which have had an adverse impact
on our results of operations, cash flows and overall financial
position.
For example, during the implementation of
lock-down measures in China, our operations were affected as many
of our employees were unable to return to work following the Lunar
New Year public holiday. Our office re-opening following the
Lunar New Year public holiday was delayed by more than two weeks
and, upon re-opening, over 40% of our employees were unable to
return to work, as scheduled, and most of those employees were not
equipped to work remotely. We only resumed full operations
and achieved full staffing levels in mid-March 2020.
Our operations and financial performance have
been, and continue to be, affected by significant increases in
international freight costs in light of the COVID-19 pandemic and
such increases have had an impact on our fulfillment
expenses. In addition, during the first quarter of calendar
year 2020 some of our third-party business partners in China, in
particular domestic logistics and transport services providers,
experienced temporary shut-downs or worker absenteeism and were
unable to meet their obligations to us. This has had an
adverse impact on our ability to promptly provide our customers
with the products they purchased, which, in turn, has affected our
financial performance.
We have experienced and expect to continue to
experience disruptions to our supply chains if our brand partners,
especially international brand partners based in the United States
and Europe, are severely impacted by the COVID-19 pandemic or
government-imposed containment measures. If we are unable to
procure products from our major brand partners when required, our
operations, financial conditions and results of operations may be
adversely impacted in the foreseeable future and such impacts may
be material. If we choose to increase the levels of inventory
we hold, when possible, to minimize the risk of experiencing
product shortages, we may be exposed to increased inventory risk
due to accumulated excess inventory, which may have an adverse
impact on our results of operations and financial condition.
See “–If we fail to effectively manage our inventory, our
reputation, results of operations and financial condition may be
materially and adversely affected.” We are currently unable
to predict with certainty the duration and severity of the COVID-19
pandemic, and its ultimate impact on our business, financial
condition, liquidity and results of operations, as these depend on
rapidly evolving and uncertain developments and factors that are
beyond our control. Such factors include, the speed of the
contagion, the ultimate effect of the various containment measures
imposed, the development of effective medical treatment solutions,
financial and market reactions to the foregoing and general
consumer sentiment. On March 30, 2020, we withdrew the
guidance for the financial year 2020 we previously provided to the
market on November 25, 2019. COVID-19-related disruptions
have had an adverse impact on our results of operations in the
first quarter of 2020 and may continue to have an adverse impact on
our results of operation in the foreseeable future.
The reason the Company cannot timely file its
Annual Report on Form 20-F does not relate to the inability of any
person, other than the Company, to furnish any required opinion,
report or certification.
Safe Harbor Statements
This news release contains forward-looking
statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, and as defined in the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as
“will”, “expects”, “anticipates”, “future”, “intends”, “plans”,
“believes”, “estimates”, “target”, “going forward”, “outlook” and
similar statements. For example, the Company’s statement
about its expectations for Company performance in 2020 is a
forward-looking statement and is inherently uncertain. Such
statements are based upon management's current expectations and
current market and operating conditions, and relate to events that
involve known or unknown risks, uncertainties and other factors,
such as the significant volatility and disruption caused by the
COVID-19 pandemic, the Company’s expected growth of the online
retail industry in China, the Company’s expectations regarding
demand for and market acceptance of its products and services, the
Company’s expectations regarding its relationships with its brand
partners and e-commerce channels, and the level of consumer
economic activity in China, all of which are difficult to predict
and many of which are beyond the Company's control, which may cause
the Company's actual results, performance or achievements to differ
materially from those in the forward-looking statements.
Further information regarding these and other risks, uncertainties
or factors is included in the Company's filings with the U.S.
Securities and Exchange Commission. The Company does not
undertake any obligation to update any forward-looking statement as
a result of new information, future events or otherwise, except as
required under applicable law.
About ECMOHO Limited
ECMOHO is a leading integrated solution provider
in the rapidly growing non-medical health and wellness market in
China. The Company acts as the bridge between brand owners
and Chinese consumers by marketing and distributing health
supplements and food, mother and child care products, personal care
products, household healthcare equipment and other health and
wellness products. Through over seven years of operation,
ECMOHO has built an ecosystem where Chinese consumers are provided
with customized health and wellness solutions that include quality
products and trustworthy content.
For more information, please visit
http://ir.ecmoho.com/.
For investor and media inquiries, please contact:
ECMOHO Limited Ms. Ellen Chiu Email:
ellenchiu@ecmoho.com
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