Champignon Brands (CSE: SHRM) (OTCQB: SHRMF) (FRA: 496) announced that as a result of a review by the British Columbia Securities Commission (BCSC), the company has decided to withdraw and refile its condensed interim consolidated financial statements and Management’s Discussion & Analysis (MD&A) for the three and six month periods ended March 31, 2020.
For the three and six-month periods ended March 31, 2020, the company previously recognized intangible assets in connection with the acquisitions of Artisan Growers, Novo Formulations and Tassili Life Sciences that aggregated approximately $12 million. After the issuance of the original financial statements and MD&A, management determined that the financial statements needed to be restated to correct the accounting for the acquisitions as the assets do not meet the definition of intangible assets for the purposes of international financial reporting standards and as a result will be recorded as transaction costs in the company’s statement of loss and comprehensive loss. The restated condensed interim consolidated financial statements and MD&A will reflect this change in the accounting treatment of the assets acquired in these acquisitions. The effect of the restatements does not impact the company’s cash position.
Champignon Brands also expects to concurrently file condensed interim consolidated financial statements and related MD&A’s for the three months ended June 30, 2020, and for the six months ended September 30, 2020. The September interim financial statements and MD&A will reflect the acquisition of Altmed Capital Corp. on April 30, 2020. The transaction constituted a Reverse Takeover Transaction (RTO) of Champignon Brands by Altmed. As a result, Champignon’s fiscal year-end for accounting and reporting purposes after April 30, 2020, will be Altmed’s fiscal year-end of March 31.
Champignon has submitted drafts of the restated condensed interim consolidated financial statements and MD&A for the three and six-month periods ended March 31, 2020, and the September financial statements and MD&A to the BCSC for review. Until the restated financial statements and MD&A are filed, the original financial statements and MD&A should not be relied upon and should be considered to have been withdrawn.
CSE Listing Status & Cease Trade Orders
Champignon Brands has also filed a draft of a new Listing Statement with the BCSC and the Canadian Securities Exchange (CSE) for review. The Listing Statement reflects the acquisition of Altmed and the RTO. The company was required to file the new Listing Statement as a condition to the lifting of the existing cease trade orders issued by the BCSC and before Champignon’s common shares being reinstated for trading on the CSE. The existing cease trade orders, issued on August 26, 2020, and October 27, 2020, effectively provide that the company must file:
- A revised material change report reflecting the accounting treatment for the Altmed transaction.
- Interim financial statements for the period ended June 30, 2020.
- Interim MD&A to June 30, 2020.
- Certification of interim filings for the period ended June 30,2020.
Drafts of these filings have been submitted to the BCSC for review. Champignon is working diligently with the BCSC and the CSE to ensure that the revocation of the existing cease trade orders against the company and the filing of the new Listing Statement occur as soon as possible.
However, there can be no assurance as to when or if the Restated Financial Statements and MD&A and the September Financial Statements and MD&A will be filed. Also, there can be no assurance as to when or if the existing cease trade orders will be lifted, or when or if the new Listing Statement will be completed and trading in Champignon’s common shares will be reinstated on the CSE.
Led by world-renowned depression researcher Dr. Roger McIntyre as the company’s Chairman and CEO, Champignon Brands is a research-driven company specializing in breakthrough Ketamine treatment for depression and other mental health conditions. The company works closely with subsidiaries including AltMed Capital Corp. The Canadian Rapid Treatment Center of Excellence (CRTCE) is wholly owned by AltMed.
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Champignon Brands is a paid client of The Cannabis Investor. The Cannabis Investor holds a position in Champignon Brands.
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