MariMed
Inc. (the “Registrant”) is unable to file its Quarterly Report on Form 10-Q for the quarter ended March 31,
2020 (“Form 10-Q”) due to circumstances related to the Coronavirus Disease 2019 (COVID-19) pandemic. Specifically,
due to the Massachusetts “stay-at-home” mandate, the Registrant’s executive offices have been closed since early
March 2020 before which certain of the Registrant’s personnel responsible for its financial reporting function were
quarantined as precautionary actions undertaken by the Registrant to prevent exposure of other personnel to the virus and to reduce
the spread of the virus. Each of the foregoing has disrupted the normal interactions among its accounting personnel and other
staff involved in the preparation of the Form 10-Q and ready access to certain documentation necessary to complete the preparation
of the 10-Q and to facilitate review of the Form 10-Q by the Registrant’s independent auditors. As a result, the Registrant
has not been able to prepare and complete its Form 10-Q in time for filing by its May 11, 2020 due date.
The
Registrant is filing this Current Report on Form 8-K to avail itself of a 45 day extension to file its Form 10-Q, relying on an
order issued by the Securities and Exchange Commission on March 25, 2020 pursuant to Section 36 of the Securities Exchange Act
of 1934, as amended (Release No. 34-88465). The Registrant estimates that it will file its Form 10-Q as soon as practicable and
in any event no later than June 25, 2020, which is 45 days from the original due date of May 11, 2020.
The
Company is supplementing the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31,
2019, as amended, with the following risk factor:
Our
business, operations, financial condition, and liquidity have been and may continue to be materially and adversely affected by
the outbreak of COVID-19.
In
March 2020, the World Health Organization declared COVID-19 a global pandemic, and governmental authorities around the world have
implemented measures to reduce the spread of the virus. The spread of COVID-19 in the United States and the measures to contain
it have negatively impacted the economy and created significant volatility and disruption in financial markets. Business shutdowns
in certain states in response to stay-at-home orders and related measures have temporarily eliminated certain customers’,
principally non-medical use customers’, access to our managed dispensaries, adversely impacting sales during this
restricted period. In addition, these restrictions and other disruptions caused by the outbreak have impacted our expansion, consolidation,
and administrative functions. Further, the volatility in the financial markets and investor uncertainty has delayed and adversely
impacted our ability to consummate debt and equity financings to raise working capital to support our operations and expansion
plans. As a result, our business, operations, financial condition, and liquidity have been and may continue to be materially and
adversely affected. Further, the disruption to the global economy and to our business, along with the decline in our stock price,
may also negatively impact the future carrying values of certain assets, including inventories, accounts receivables, intangibles,
and goodwill. The full extent to which COVID-19 and the measures to contain it will impact our business, operations financial
condition, and liquidity will depend on the severity and duration of the COVID-19 outbreak and other future developments related
to the response to the virus all of which are highly uncertain. As a result, we cannot predict the ultimate impact of COVID-19
on the Company and its operational and financial performance.
The Company anticipates reporting the following:
Total
revenues for the quarter ended March 31, 2020 are expected to be approximately $7.5 million, compared to approximately $3.5 million
for the same prior year period.
Cost
of revenues for the quarter ended March 31, 2020 are expected to be approximately $2.8 million, compared to approximately
$1.3 million for the same prior year period.
Forward-Looking
Statements
Certain
of the statements contained in this report 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. The Registrant 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.
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