Item 8.01 Other Events.
COVID-19
We are providing the following update on our
business operations. As result of the global outbreak of the COVID-19 virus, on March 30, 2020 we evaluated our ongoing effort
to prepare and file our annual report on Form 10-K for the fiscal year ended December 31, 2019.
Certain Company officers and management as
well as professional staff are unable to conduct work required to prepare our financial report for the year ended December 31,
2019. Dallas County, Texas, where we are headquartered, has issued an order requiring all individuals anywhere in Dallas County
to remain at home, with the sole exception of essential business and government services.
As a result, we expect to be unable to compile
and review certain information required in order to permit us to file a timely and accurate annual report on Form 10-K for our
year ended December 31, 2019 by the prescribed date without unreasonable effort or expense due to circumstances related to COVID-19.
On March 4, 2020 the Securities and Exchange
Commission (the "SEC") issued an Order under Section 36 (Release No. 34-88318) of the Securities Exchange Act of 1934
("Exchange Act") granting exemptions from specified provisions of the Exchange Act and certain rules thereunder (the
"Order"). The Order provides that a registrant (as defined in Exchange Act Rule 12b-2) subject to the reporting requirements
of Exchange Act Section 13(a) or 15(d), and any person required to make any flings with respect to such a registrant, is exempt
from any requirement to file or furnish materials with the Commission under Exchange Act Sections 13(a), 13(f), 13(g), 14(a), 14(c),
14(f), 15(d) and Regulations 13A, Regulation 13D-G (except for those provisions mandating the fling of Schedule 13D or amendments
to Schedule 13D), 14A, 14C and 15D, and Exchange Act Rules 13f-1, and 14f-1, as applicable, where certain conditions are satisfied.
We are relying on this Order for filing of
this Form 8-K, and expect to file our annual report on Form 10-K for the year ended December 31, 2019 approximately 45 days after
March 30, 2020.
We are supplementing the risk factors previously
disclosed in our SEC filings, with the following risk factor:
The novel coronavirus (COVID-19) has negatively
affected our ability to timely prepare and maintain accurate accounting and reporting, and may have a severe adverse impact on
our business.
We believe COVID-19 has negatively affected
our ability to timely prepare and maintain accurate accounting and reporting, and could continue to do so in the foreseeable future.
The coronavirus has resulted in restrictions, postponements and cancelations, including a “Stay Home Stay Safe” order
in Dallas County, where we are headquartered. The impact, extent and duration of the government imposed restrictions on travel
and public gatherings as well as the overall effect of the COVID-19 virus is currently unknown.
Our business may be adversely affected by the
instability, disruption, and quarantine restrictions caused by the recent outbreak COVID-19. The COVID-19 outbreak may cause customers
to suspend their decisions on ordering our products, make it impossible to attend or sponsor trade shows or other conferences in
which our products are presented to distributors, customers and potential customers, for our customers to visit our physical location,
and give rise to sudden significant changes in regional and global economic conditions and cycles that could interfere with purchases
of goods, or commitments to develop new brands and white label products.
Any significant disruption to communications
and travel, including travel restrictions and other potential protective quarantine measures against COVID-19 by governmental agencies,
may increase the difficulty and could make it impossible for us to deliver goods to our customers. Travel restrictions and protective
measures against COVID-19 could cause us to incur additional unexpected labor costs and expenses or could restrain our ability
to retain the highly skilled personnel we need for our operations. The extent to which COVID-19 impacts our business, sales and
results of operations will depend on future developments, which are highly uncertain and cannot be predicted.