TREES Corp (Colorado) 10-Q

ITEM 1A. RISK FACTORS Except as described below, as of the date of this report, there have been no material changes to the Risk Factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019. The Company’s business, results of operations and financial condition may be adversely affected by pandemic infectious diseases, particularly the recent novel coronavirus strain known as COVID-19. Pandemic infectious diseases, such as the current COVID-19 strain, may adversely impact the Company’s business, consolidated results of operations and financial condition. The global spread of COVID-19 has created significant volatility and uncertainty and economic disruption. The extent to which COVID-19 impacts the Company’s business, operations and financial results will depend on numerous evolving factors that the Company may not be able to accurately predict, including: the duration and scope of the pandemic; governmental, business and individuals’ actions that have been and continue to be taken in response to the pandemic; the impact of the pandemic on economic activity and actions taken in response; the effect on the Company’s customers and customer demand for the Company’s services, products and solutions; the Company’s ability to sell and provide its services and solutions, including as a result of travel restrictions and people working from home; the ability of the Company’s customers to pay for the Company’s services and solutions; and any closures of the Company’s offices and the offices and facilities of the Company’s customers. COVID-19, as well as measures taken by governmental authorities to limit the spread of this virus, may interfere with the ability of the Company’s employees, suppliers, and other business providers to carry out their assigned tasks or supply materials or services at ordinary levels of performance relative to the requirements of the Company’s business, which may cause the Company to materially curtail certain of its business operations. Any of these events could materially adversely affect the Company’s business, financial condition, results of operations and/or stock price. The loss of one of our largest customers, or a significant reduction in the revenue we generate from these customers, could materially adversely affect our revenue, profitability and results of operations. Revenue from our largest customers have historically accounted for a significant amount of our business. For instance, during the first quarter of 2020, 73% of NBC’s revenue was with three customers, which comprised approximately 72% of our total consolidated revenue for such quarter. During the first quarter of 2020, approximately 19% of our revenue was derived from the delivery of services, for which we have contracts, and approximately 80% was derived from the sale of products. Generally, our agreements with our customers for services allow them to terminate service with a limited notification period, while product sales agreements do not include any minimum or continuing obligations to purchase our products. We cannot assure you that our largest customers will not terminate services or cease purchasing our products in favor of other service and/or product providers, significantly reduce orders, or seek price reductions in the future. Any such event could have a material adverse effect on our revenue, profitability and results of operations. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. MINE SAFETY DISCLOSURES Not applicable.