Cronos Group to Restate Certain 2019 Unaudited Interim Financial Statements
March 17 2020 - 5:05PM
Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) (“Cronos Group” or the
“Company”) announced today that the Company determined, on the
recommendation of the Audit Committee of the Company’s Board of
Directors and after consultation with KPMG LLP, the Company’s
independent registered public accounting firm, that Cronos Group’s
previously issued unaudited interim financial statements for first,
second and third quarters of 2019 prepared in accordance with
International Financial Reporting Standards as filed on SEDAR, and
with the U.S. Securities and Exchange Commission on Form 6-K, will
be restated and reissued and should no longer be relied upon.
As previously announced, the Audit Committee of the Company’s
Board of Directors has been conducting a review of certain bulk
resin purchases and sales of products through the wholesale
channel, and the restatement is being made to eliminate certain of
these transactions through the wholesale channel. The Company will
reduce revenue for the three months ended March 31, 2019 by C$2.5
million and the three months ended September 30, 2019 by C$5.1
million.
Cronos Group intends to file its Annual Report on Form 10-K for
the fiscal year ended December 31, 2019, including its audited
annual financial statements for the fiscal year ended December 31,
2019, no later than March 30, 2020. However, no assurance can be
given that the anticipated timing of filing will be met due to the
impact of COVID-19, as well as the need for the Company’s auditors
to complete their audit work, among other things. In connection
with the restatement, the Company anticipates that it will report
one or more material weakness in internal control over financial
reporting when it files its Form 10-K.
About Cronos Group Inc.Cronos Group is an
innovative global cannabinoid company with international production
and distribution across five continents. Cronos Group is committed
to building disruptive intellectual property by advancing cannabis
research, technology and product development. With a passion to
responsibly elevate the consumer experience, Cronos Group is
building an iconic brand portfolio. Cronos Group’s portfolio
includes PEACE NATURALS™, a global health and wellness platform,
two adult-use brands, COVE™ and Spinach™, and two hemp-derived CBD
brands, Lord Jones™ and PEACE+™. For more information about Cronos
Group and its brands, please visit: www.thecronosgroup.com.
Forward-Looking StatementsThis news release
contains “forward‐looking information” and “forward‐looking
statements” within the meaning of applicable Canadian and U.S.
securities laws. All information contained herein that is not
clearly historical in nature may constitute forward‐looking
information. In some cases, forward‐looking statements can be
identified by words or phrases such as “may”, “will”, “expect”,
“plan”, “anticipate”, “intend”, “potential”, “estimate”, “believe”
or the negative of these terms, or other similar expressions
intended to identify forward‐looking statements. Some of the
forward‐looking statements contained in this press release include
the timing of the restatement of Cronos Group’s unaudited interim
financial statements and the filing of its Annual Report on Form
10-K for the fiscal year ended December 31, 2019 and the impact of
any material weaknesses that may be identified as a result of the
Audit Committee review. Forward‐looking statements are necessarily
based upon a number of estimates and assumptions that, while
considered reasonable by management, are inherently subject to
significant business, economic and competitive risks, uncertainties
and contingencies that may cause the actual timing of the
restatement of Cronos Group’s financial statements and the filing
of its Annual Report on Form 10-K for the fiscal year ended
December 31, 2019, financial results, performance or achievements
to be materially different from the estimated future restatement
time, filing time, results, performance or achievements expressed
or implied by those forward‐looking statements and the
forward‐looking statements are not guarantees of future
performance. A discussion of some of the material risks applicable
to the Company can be found in the Company’s current Management’s
Discussion and Analysis and Annual Information Form and under the
heading “Risk Factors” in Part I, Item 1A of the Company’s Annual
Report on Form 10-K for the fiscal year ended December, 31, 2019,
each of which have been filed on SEDAR and EDGAR and can be
accessed at www.sedar.com and www.sec.gov/edgar, respectively.
The forward‐looking information included in this news release is
made as of the date of this news release and, except as required by
law, Cronos Group disclaims any obligation to update or revise any
forward‐looking statements. Readers are cautioned not to put undue
reliance on these forward‐looking statements.
Cronos Group ContactAnna ShlimakTel: (416)
504-0004investor.relations@thecronosgroup.com
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