Cronos Group Inc. Announces Final Settlement Agreements
October 24 2022 - 4:44PM
Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) (“Cronos” or the
“Company”) today announced that it has reached final settlement
agreements with each of the U.S. Securities and Exchange Commission
(the “SEC”) and the Staff of the Ontario Securities Commission (the
“OSC”) that resolve those regulators’ investigations regarding the
previously disclosed restatements by the Company of its financial
statements for the first three quarters of 2019 and the second
quarter of 2021.
“We are pleased to have resolved these matters,”
said Mike Gorenstein, Chairman, President and Chief Executive
Officer of Cronos. “Important steps have been taken to strengthen
our internal controls, and we are committed to continuing this
work.”
SEC SettlementOn October 24,
2022, the SEC issued an Order Instituting Cease-and-Desist
Proceedings Pursuant to Section 8(a) of the U.S. Securities Act of
1933 (the “Securities Act”) and Section 21(c) of the U.S.
Securities Exchange Act of 1934 (the “Exchange Act”), Making
Findings, and Imposing a Cease-and-Desist Order (the “SEC
Settlement Order”) resolving the SEC’s investigation of the
restatements by the Company described above.
The Company has agreed to settle with the SEC,
without admitting or denying the allegations described in the SEC
Settlement Order. The SEC Settlement Order fully and finally
disposes of the investigation of the Company by the SEC into the
restatements without the payment of any civil penalty or other
amount.
The SEC Settlement Order requires the Company to
cease and desist from committing or causing any violations and any
future violations of certain provisions of the U.S. federal
securities laws. Additionally, the Company agreed to certain
undertakings which include, among other things, retaining a
qualified independent consultant (the “Consultant”) to engage in a
review of, and make recommendations with respect to, certain of the
Company’s internal accounting controls and internal control over
financing reporting.
OSC SettlementOn October 24,
2022, the Ontario Capital Markets Tribunal approved a settlement
agreement (the “OSC Settlement Agreement”) between the Company and
the staff of the OSC, resolving the OSC’s investigation of the
restatements by the Company described above.
Pursuant to the terms of the OSC Settlement
Agreement, which fully and finally disposes of the investigation of
the Company by the OSC, Cronos agreed to pay a total of C$1.34
million to fully settle the matter and acknowledged that it had not
complied with certain requirements under the Securities Act
(Ontario) in connection with the filing of interim financial
reports in the manner set out therein. Additionally, the Company
agreed to retain the Consultant on substantially the same terms as
were required by the SEC pursuant to the SEC Settlement Order.
Additional InformationAs a
result of the SEC Settlement, the Company will be unable to rely on
the private offering exemptions provided by Regulations A and D
under the Securities Act for a period of five years; lose its
status as a well-known seasoned issuer for a period of three years;
and be unable to rely on the safe harbor provisions of the U.S.
Private Securities Litigation Reform Act of 1995 for a period of
three years.
For more information regarding the SEC
Settlement Order and the OSC Settlement Agreement, please see the
Company’s Form 8-K filed on EDGAR at www.sec.gov/edgar and on the
Company’s SEDAR profile at www.sedar.com.
About CronosCronos is an
innovative global cannabinoid company committed to building
disruptive intellectual property by advancing cannabis research,
technology and product development. With a passion to responsibly
elevate the consumer experience, Cronos is building an iconic brand
portfolio. Cronos’ diverse international brand portfolio includes
Spinach®, PEACE NATURALS®, Lord Jones®, Happy Dance® and PEACE+®.
For more information about Cronos and its brands, please visit:
thecronosgroup.com.
Cronos ContactShayne
LaidlawTel: (416) 504-0004investor.relations@thecronosgroup.com
Cronos (TSX:CRON)
Historical Stock Chart
From Apr 2024 to May 2024
Cronos (TSX:CRON)
Historical Stock Chart
From May 2023 to May 2024