SEC Order
for Reporting Relief
GL Brands, Inc.,
a Nevada corporation (the “Company”), intended to rely 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 (SEC Release No. 34-88465, March 25, 2020) (the "Order")
to delay the filing of its Transition Report on Form 10-K for the transition period ended December 31, 2019 (the "Report")
due to the circumstances related to COVID-19. In particular, COVID-19 has caused disruptions in transportation and the displacement
of the Company's personnel and third-party service providers, resulting in limited support from its accounting staff and professional
advisors. This has delayed the Company's ability to complete its financial statements and the auditor review thereof, which, in
turn, has delayed the Company’s ability to prepare the Report. Notwithstanding the foregoing, the Company expects to file
the Report no later than June 25, 2020 (which is 45 days from the Report's original filing deadline of May 11, 2020).
The
Company communicated with its auditor regarding relying on the Order prior to the Report original filing deadline of May 11, 2020,
but it did not receive a response from its auditor until Monday, May 18, 2020, when the auditor stated that “[d]ue to issues
at our firm and our client[’]s staffing difficulties as a result of the COVID-19 pandemic, we need additional time to complete
the audit procedures related to the period ended December 31, 2019.”
In
light of the current COVID-19 pandemic, the Company will be including the following risk factors in its Report.
The outbreak
of the coronavirus (COVID-19) has negatively impacted and could continue to negatively impact the global economy. In addition,
the COVID-19 outbreak could disrupt or otherwise negatively impact global credit markets and our operations, including the demand
for our products and our ability and the ability of our third-party contract manufacturers to manufacture and deliver our products.
The
COVID-19 outbreak has negatively impacted and could continue to negatively impact the global economy. In addition, the global and
regional impact of the outbreak, including official or unofficial quarantines and governmental restrictions on activities taken
in response to such event, could limit our ability and the ability of our third party manufacturers to manufacture and deliver
our products, which would have a material adverse impact on our business, financial condition, results of operations and cash flows.
The impact of the COVID-19 outbreak could include voluntary or mandatory closures of our facilities, interruptions in our supply
chain, which could impact the cost or availability of products, restrictions on our ability to deliver our products, closures of
our retail locations and labor shortages. The COVID-19 outbreak could result in reduced consumer demand for our products due to
reduced consumer traffic in locations where our products are sold. The COVID-19 outbreak could disrupt or otherwise negatively
impact credit markets, which could adversely affect the availability and cost of capital. Such impacts could limit our ability
to fund our operations and satisfy our obligations. The extent and potential short and long term impact of the COVID-19 outbreak
on our operational and financial performance will depend on future developments, including the duration, severity and spread of
the virus, actions that may be taken by governmental authorities and the impact on our supply chain, operations, workforce and
the financial markets, all of which are highly uncertain and cannot be predicted.
The occurrence
of the COVID-19 pandemic may negatively affect our ability to meet our filing obligations with the Securities and Exchange Commission
depending on the severity and longevity of the pandemic.
A
pandemic typically results in social distancing, travel bans and quarantine, and this may limit access to our facilities, customers,
management, support staff, professional advisors and our independent auditors. These factors, in turn, may not only impact our
operations, financial condition and demand for our goods and services but our overall ability to react timely to mitigate the impact
of this event. Also, it may hamper our efforts to comply with our filing obligations with the Securities and Exchange Commission.
Depending on the severity and longevity of the COVID-19 pandemic, our business, customers, and shareholders may experience a significant
negative impact.