Item 8.01 Other Events.
Sharing Economy International Inc. (the “Company”) will be unable to file its Annual
Report on Form 10-K for the fiscal year ended March 30, 2019 (the “Form 10-K”) by March 30, 2020 due to circumstances
related to COVID-19. Substantially all of the Company’s operating subsidiaries, employees and production facilities are located
in China, which has been affected by the outbreak of COVID-19 since December 2019. Between January to February 2020, the Chinese
government imposed nationwide travel restrictions and quarantine control, and we largely suspended our operations during this period.
Additionally, staff of the Company’s independent registered public accounting firm, located outside of China, have been unable
to travel to China to perform audit functions due to prohibitions not allowing non-China citizens from outside of China to travel
to Wuxi city. As a result, the Company will be unable to complete the preparation of the Company’s consolidated financial
statements and the Form 10-K without undue hardship and expense to the Company until after March 30, 2020.
The Company is relying on the Securities and
Exchange Commission’s Order under Section 36 of the Securities Exchange Act of 1934 Modifying Exemptions From the Reporting
and Proxy Delivery Requirements for Public Companies dated March 25, 2020 (Release No. 34-88465) (the “Order”) to delay
the filing of its Annual Report on Form 10-K until May 14, 2020 (45 days after the original due date).
In light of recent developments relating to
the COVID-19 pandemic, the Company is supplementing the 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 factor:
Our business operations have been and
may continue to be materially and adversely affected by the outbreak of the coronavirus disease (COVID-19).
An outbreak of respiratory illness caused by
COVID-19 emerged in Wuhan city, Hubei province, China, in which province a part of the Company’s primary operations and businesses
are located, in late 2019 and has been expanding within the PRC, including Guangdong province, where the remaining part of the
Company’s operations and businesses take place, and globally. The new strain of COVID-19 is considered to be highly contagious
and poses a serious public health threat. On January 23, 2020, the PRC government announced the lockdown of Wuhan city in an attempt
to quarantine the city. Since then, other measures including travel restrictions have been imposed in other major cities in the
PRC and throughout the world in an effort to contain the COVID-19 outbreak. The World Health Organization (the “WHO”)
is closely monitoring and evaluating the situation. On March 11, 2020, the WHO declared the outbreak of COVID-19 a pandemic, expanding
its assessment of the threat beyond the global health emergency it had announced in January. 1
Substantially all of our revenues are generated
in China. Consequently, our results of operations will likely be adversely, and may be materially, affected, to the extent that
COVID-19 or any other epidemic harms the Chinese and global economy. Any potential impact to our results will depend on, to a large
extent, future developments and new information that may emerge regarding the duration and severity of COVID-19 and the actions
taken by government authorities and other entities to contain COVID-19 or treat its impact, almost all of which are beyond our
control. Potential impacts include, but are not limited to, the following:
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temporary closure of offices, travel restrictions or suspension of transportation of our products
to our customers and our suppliers have been negatively affected, and could continue to be negatively affected, on their ability
to supply our demands;
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our customers that are negatively impacted by the outbreak of COVID-19 may reduce their budgets
to purchase our products and services, which may materially adversely impact our revenue;
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We may have to provide significant sales incentives to our customers in response to the outbreak,
which may in turn materially adversely affect our financial condition and operating results;
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the business operations of our customers and suppliers have been and could continue to be negatively
impacted by the outbreak, result in loss of customers or disruption of our services, which may in turn materially adversely affect
our financial condition and operating results;
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any disruption of our supply chain, logistics providers or customers could adversely impact our
business and results of operations, including causing our suppliers to cease manufacturing products for a period of time or materially
delay delivery to customers, which may also lead to loss of customers, as well as reputational, competitive and business harm to
us;
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many of our customers, distributors, suppliers and other partners are individuals and small and
medium-sized enterprises, which may not have strong cash flows or be well capitalized, and may be vulnerable to an epidemic outbreak
and slowing macroeconomic conditions. If the individuals and small and medium-sized enterprises that we work with cannot survive
COVID-19 and the resulting economic impact, or cannot resume business as usual after a prolonged outbreak, our revenues and business
operations may be materially and adversely impacted; and
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the global stock markets, including the over-the-counter markets, on which our shares of common
stock are quoted, have experienced, and may continue to experience, significant decline from the COVID-19 outbreak, which could
materially adversely affect our stock price.
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Because of the uncertainty surrounding the
COVID-19 outbreak, the financial impact related to the outbreak of and response to the coronavirus cannot be reasonably estimated
at this time, but our results for the first quarter and full year of 2020 may be adversely affected. In general, our business could
be adversely affected by the effects of epidemics, including, but not limited to, COVID-19, avian influenza, severe acute respiratory
syndrome (SARS), the influenza A virus, the Ebola virus, or other outbreaks. In response to an epidemic or other outbreaks, government
and other organizations may adopt regulations and policies that could lead to severe disruption to our daily operations, including
temporary closure of our offices and other facilities. These severe conditions may cause us and/or our partners to make internal
adjustments, including but not limited to, temporarily closing down business, limiting business hours, and setting restrictions
on travel and/or visits with clients and partners for a prolonged period of time. Various impacts arising from severe conditions
may cause business disruption, resulting in material, adverse effects to our financial condition and results of operations.
Forward-Looking Statements
Certain of the statements contained in this
Current Report on Form 8-K should be considered forward-looking statements within the meaning of the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. 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. 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 particular,
the consequences of the COVID-19 outbreak to economic conditions and the industry in general and the financial position and operating
results of the Company in particular have been material, are changing rapidly, and cannot be predicted. 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.