VAUGHAN, ON, Aug. 1, 2019 /CNW/ – CannTrust Holdings Inc. (“CannTrust” or the “Company”, TSX: TRST, NYSE: CTST) now announced that it will probably miss its filing deadline (the “Filing Deadline”) of August 14, 2019 to file an interim monetary report for the 3 and six month periods ended June 30, 2019, an interim management’s discussion and evaluation for the corresponding period and certifications of interim filings (“Q2 Filings”).
Management is of the view that there is substantial uncertainty with respect to the prospective influence of pending Wellness Canada choices on the valuation of the Company’s inventory and biological assets and income recognition. As previously disclosed, the Organization received a compliance report from Wellness Canada notifying it that its Niagara Facility in Pelham, Ontario is non-compliant with particular regulations primarily based on observations produced by Wellness Canada relating to the expanding of cannabis in 5 unlicensed rooms from October 2018 to March 2019 and inaccurate data offered to Wellness Canada by staff. Wellness Canada placed a hold on inventory which involves roughly five,200 kg of dried cannabis that was impacted by the previously unlicensed rooms at the Company’s Niagara Facility. The Organization instituted a voluntary hold of roughly 7,500 kg of dried cannabis equivalent at its extraction, manufacturing and packaging facility in Vaughan, Ontario that was impacted by the previously unlicensed rooms. The Organization estimates the worth of the impacted inventory and biological assets is roughly $51 million as at June 30, 2019.
The uncertainty with respect to the nature, timing and prospective monetary influence of pending Wellness Canada choices on the valuation of the Company’s inventory and biological assets and income recognition relates to the reality that Wellness Canada has broad discretion to physical exercise a wide variety of regulatory powers.
Till Wellness Canada has produced determinations with respect to the physical exercise of its regulatory powers, the prospective influence on the Company’s operations and monetary situation remains unknown. In addition to impacting the Company’s monetary disclosure in the Q2 Filings, the effects of the pending Wellness Canada choices might also demand restatement of particular of the Company’s historical monetary statements and associated management’s discussion and evaluation for the periods ended December 31, 2018 and March 31, 2019 (“Restated Financials”).
The Organization anticipates and expects to file the Q2 Filings and, if necessary, the Restated Financials, and any other periodic disclosure necessary to be filed below applicable securities laws as quickly as practicable when data relevant to associated matters is out there.
The Organization has informed employees of the Ontario Securities Commission (the “OSC”) about its anticipated delay of the Q2 Filings and prospective will need for Restated Financials and has applied to the OSC pursuant to Component four of National Policy 12-203 – Management Cease Trade Orders (“NP 12-203”) for a Management Cease Trade Order (“MCTO”) pending the filing of the Q2 Filings and any Restated Financials if necessary. If a MCTO is issued, the Organization intends to satisfy the provisions of the “alternative data guidelines” as set out in NP 12-203, like the requirement to file bi-weekly status reports in the type of news releases containing prescribed updating data, till the Q2 Filings and necessary Restated Financials, if any, are produced. A MCTO would not typically impact the capability of persons who are not directors, officers or insiders of the Organization to trade in securities of the Organization. There can be no assurance that a MCTO will be issued.
The Organization has established a blackout on trading by directors, officers and other insiders of the Organization, and intends to continue the blackout till the Q2 Filings and any Restated Financials, if necessary, have been filed. The Organization will take into consideration different remediation selections and take proper actions in consultation with Wellness Canada and the OSC exactly where proper.
The Organization is not at the moment topic to any insolvency proceedings. If the Organization offers any data to any of its creditors throughout the period in which it is in default of filing the Q2 Filings or any Restated Financials, if necessary, the Organization confirms that it will also file material transform reports on SEDAR containing such data as is necessary.
As announced yesterday, the Company’s Specific Committee of independent directors has commenced a overview of strategic options and retained Greenhill & Co. Canada Ltd. as its monetary advisor. That overview is in its early stages and is ongoing. Now, employees of the OSC advised the Specific Committee’s legal counsel that an investigation has been opened into matters and parties associated to CannTrust and the investigation has been assigned to the Joint Really serious Offences Group of the Enforcement Branch of the OSC.
CannTrust is a federally regulated licensed producer of health-related and recreational cannabis in Canada. Founded by pharmacists, CannTrust brings extra than 40 years of pharmaceutical and healthcare expertise to the health-related cannabis business and serves health-related sufferers with its dried, extract and capsule solutions. The Organization operates its Niagara Perpetual Harvest Facility in Pelham, Ontario, and prepares and packages its solution portfolio at its manufacturing centre of excellence in Vaughan, Ontario. The Organization has also bought 81 acres of land in British Columbia and expects to safe more than 240 acres of land in total for low-expense outside cultivation which it will use for its extraction-primarily based solutions.
This press release consists of “forward-hunting information” inside the which means of Canadian Securities laws and “forward-hunting statements” inside the which means of the United States Private Securities Litigation Reform Act of 1995 and other applicable United States secure harbor laws, and such statements are primarily based upon CannTrust‘s existing internal expectations, estimates, projections, assumptions and beliefs and views of future events. Forward-hunting data and forward-hunting statements can be identified by the use of forward-hunting terminology such as “believes”, “expect”, “likely”, “may”, “will”, “should”, “intend”, “anticipate”, “potential”, “proposed”, “estimate” and other related words, like adverse and grammatical variations thereof, or statements that particular events or circumstances “may”, “would” or “will” take place, or by discussions of approach.
The forward-hunting data and statements in this news release include things like statements relating to the anticipated timeframe and resolution for the completion of Wellness Canada’s high quality solution testing, Wellness Canada’s determinations and choices with respect to regulatory compliance matters, the Company’s response to Wellness Canada’s compliance report and the anticipated timing for filing of the Q2 Filings and any Restated Financials, if necessary, pending the outcome of Wellness Canada’s overview. Forward-hunting data and statements necessarily involve identified and unknown dangers, like, with out limitation: outcomes of Wellness Canada’s high quality solution testing, like orders and compliance measures necessary by Wellness Canada and their influence on the operations and monetary situation of the Organization and its capability to prepare the Q2 Filings and any Restated Financials, if necessary regulatory approval dangers linked with common financial circumstances adverse business events loss of markets future legislative and regulatory developments in Canada, the United States and elsewhere the cannabis business in Canada typically and, the capability of CannTrust to implement its small business methods.
Any forward-hunting data and statements speak only as of the date on which they are produced, and, except as necessary by law, CannTrust does not undertake any obligation to update or revise any forward-hunting data or statements, no matter if as a outcome of new data, future events or otherwise. New elements emerge from time to time, and it is not feasible for CannTrust to predict all such elements. When thinking about these forward-hunting data and statements, readers should really preserve in thoughts the danger elements and other cautionary statements in CannTrust‘s Annual Data Type dated March 28, 2019 (the “AIF”) and filed with the applicable Canadian securities regulatory authorities on SEDAR at www.sedar.com and filed as an exhibit CannTrust‘s Type 40-F annual report below the United States Securities Exchange Act of 1934, as amended, with the United States Securities and Exchange Commission on EDGAR at www.sec.gov. The danger elements and other elements noted in the AIF could trigger actual events or outcomes to differ materially from these described in any forward-hunting data or statements.
The TSX and NYSE do not accept duty for the adequacy or accuracy of this release.
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