NOVA LIFESTYLE, INC. ANNOUNCES DELAY IN FILING FORM 10-K REPORT AND PROVIDES COVID-19 UPDATE
27 März 2020 - 9:14PM
Nova LifeStyle, Inc. (NASDAQ: NVFY) (“Nova LifeStyle” or the
“Company”) today announced that the filing of the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31,
2019 (“Annual Report”) will be delayed beyond the required filing
date of March 30, 2020 until May 14, 2020; and the Company
provided an update on the impact of the COVID-19 outbreak on the
Company.
Annual Report Filing Date
The Company previously announced that it expected to file its
Annual Report within the extension period afforded by Rule 12b-25.
As a result of the increasing challenges associated with the
COVID-19 outbreak, the Company does not expect to file the Annual
Report until May 14, 2020. The Company filed a Current Report on
Form 8-K today which outlines the Company’s reliance on the relief
from the original filing deadline provided by the SEC, and the
Annual Report filing extension permitted thereunder. The extension
of time is necessary due to unanticipated delays being experienced
by the Company’s auditors in completing the field work associated
with the audit of the Company’s financial statements.
COVID-19 Update
The Company primarily conducts its business operations from four
cities: Los Angeles, California, Hong Kong, Macao, China and Kuala
Lumpur, Malaysia. In response to the evolving dynamics related to
the COVID-19 outbreak, the Company is following the public health
orders and guidelines issued by local authorities as it prioritizes
the health and safety of its employees, contractors, suppliers and
retail partners. The offices located in Hong Kong and Macau were
closed for the Lunar New Year Holiday Break, and remained closed as
a result of the outbreak until late February. Both of those offices
are now open. The two showrooms and warehouse in Kuala Lumpur have
been closed since March 18, 2020. The Los Angeles facility public
showroom has been closed since March 16, 2020, but a skeleton staff
works in that facility each day to receive shipping containers of
products delivered from the Company’s contract manufacturers, and
to ship products to customers, and most of our staff is working
remotely.
The COVID-19 pandemic precludes sales calls being made out of
all of the Company’s offices or attendance at furniture trade
shows, but the Company continues to receive orders and solicit
business via telephone and email. At this juncture, the Company is
unable to predict when the Kuala Lumpur and Los Angeles facilities
will be able to resume ordinary operations, or whether future
developments may cause the Company to curtail or suspend operations
in its other facilities.
The third-party contract manufacturers that we utilize in China
were closed from the beginning of the Lunar New Year Holiday
through the beginning of March, and recommenced production and
shipment in early March. The Company’s new products are being
sourced from manufacturers in India and Malaysia. The Company
expects that as the COVID-19 virus continues to spread there will
be significant disruptions in the production and shipment of
product from those manufacturers. While the Company has implemented
a series of alternative solutions in an attempt to reduce the
impact of the production delays, there is no assurance that any of
these alternative solutions will be successful; and they may result
in additional costs being borne by the Company. It is presently not
possible for the Company to estimate the negative impact of the
pandemic on demand for its products. However, it is clear that the
first and second quarter operating results will be adversely
impacted in any event.
For additional information regarding the delays in filing our
Annual Report and well as more fulsome disclosure of the impact of
the COVID-19 outbreak on our Company please review the Current
Report on Form 8-K filed by us today with the Securities and
Exchange Commission. Investors are encouraged to read the filing in
its entirety at www.sec.gov.
About Nova LifeStyle
Nova LifeStyle, Inc. is a well-established, innovative designer
and distributor of modern lifestyle furniture; primarily sofas,
dining room furniture, cabinets, office furniture and related
components, bedroom furniture, and various accessories, in matching
collections. Nova's family of brands include Diamond Sofa and
Bright Swallow. Nova's products feature urban contemporary styles
that integrate comfort and functionality, incorporating upscale
luxury designs which appeal to middle and upper middle-income
consumers in the USA, China, Europe, and elsewhere in the
world.
Visit Nova LifeStyle's website
at www.NovaLifeStyle.com.
Forward-Looking Statements
This document includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
including our financial targets for our consolidated adjusted
EBITDA and free cash flow, our expected future growth prospects and
our exploration of acquisition opportunities. All statements other
than statements of historical fact are, or may be deemed to be,
forward-looking statements. In some cases, forward-looking
statements can be identified by the use of forward-looking terms
such as “anticipate,” “estimate,” “believe,” “continue,” “could,”
“intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,”
“expect,” “objective,” “projection,” “forecast,” “goal,”
“guidance,” “outlook,” “effort,” “target,” “trajectory” or the
negative of these terms or other comparable terms. However, the
absence of these words does not mean that the statements are not
forward-looking. These forward-looking statements are based on
certain assumptions and analyses made by us in light of our
experience and our perception of historical trends, current
conditions and expected future developments, as well as other
factors we believe are appropriate in the circumstances.
Investor Relations Contact Andrew Barwicki 516-662-9461
andrew@barwicki.com ir@novalifestyle.com
Source: Nova LifeStyle, Inc.
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