Business Context and Reporting Period
Cheer Holding, Inc., then named Glory Star New Media Group Holdings Limited, filed this Form 8-K on March 16, 2020 under Item 8.01. The company’s headquarters and operations were in Beijing, China, and it operated an e-Mall platform serving users and third-party merchants primarily in China.
The filing addresses the company’s inability to timely submit its Form 10-K for the fiscal year ended December 31, 2019 and an amendment to its February 21, 2020 Form 8-K, as amended February 28, 2020.
Financial Metrics and Liquidity
The filing does not provide clear values for revenue, profit, cash flow, margins, debt, liquidity, or other financial metrics. The company stated that its financial data and audit procedures could not be completed by the original filing deadline.
Material Changes Versus the Prior Comparable Period
No period-over-period financial comparison is provided. The material development was a delay in completing and filing the 2019 Form 10-K and the Super 8-K Amendment.
Guidance, Outlook, Risks, Contingencies, and Unusual Items
- The company relied on the SEC’s March 4, 2020 COVID-19 filing relief order, which permitted eligible registrants additional time to file certain reports.
- Travel restrictions, government-mandated quarantines, employee self-quarantine measures, and staffing limitations impaired daily operations and prevented timely completion of financial information.
- The company intended to file the 2019 Form 10-K and Super 8-K Amendment on or before April 30, 2020.
- The independent registered public accounting firm, Friedman LLP, stated that it was unable to complete audit procedures on time because of limited access to company personnel and financial data.
- Management warned that continued COVID-19 spread could adversely affect employees, users, third-party merchants, operations, and financial results through additional quarantines and travel restrictions.
- Exhibit 99.1 contains the signed statement from Friedman LLP dated March 16, 2020.
Important Facts for Investors to Verify
- Whether the company filed the 2019 Form 10-K and Super 8-K Amendment by April 30, 2020.
- The financial results, cash position, debt, liquidity, and audit conclusions disclosed in those subsequent filings.
- Any COVID-19-related operational, financial, or internal-control impacts identified in the completed filings.
- Whether the independent auditor identified qualifications, delays, material weaknesses, or other issues.