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It seems cannabis companies have joined the ongoing trend of filing their financial statements late. As reported new additions to the club are Delic Holdings and Chalice Brands, while Red White & Bloom has provided additional information, that was not in the mentioned article.
Red White & Bloom Brands Inc. (OTCQX:RWBYF) (CSE:RWB) announced that, as a result of delays to its audit, the company’s annual financial statements and accompanying management’s discussion and analysis for the fiscal year ended December 31, 2021 were not finalized by May 2, 2022, the filings due date. The company applied for and was granted a management cease trade order (the “MCTO”) by the British Columbia Securities Commission.
The delay is due to the complexity of acquisition transactions, dispositions, and various delays caused by COVID-19, resulting in the company and auditor not having adequate time and resources available to complete the audit in the allotted time. The company is working with its auditor, Macias Gini & O’Connell LLP, to complete the audit as soon as possible. RWB will issue a news release announcing the completion of such filings and rescheduling of its earnings conference call at such time.
Until the company completes its annual filings, it will comply with the alternative information guidelines set out in National Policy 12-203 – Management Cease Trade Order for issuers who have failed to timely comply with a specified continuous disclosure requirement.
During the MCTO, the general investing public will continue to be able to trade in the company’s listed common shares. However, the company’s CEO and CFO will not be able to trade in the company’s common shares.
Delic Holdings Corp (CSE:DELC) (OTCQB:DELCF) (FRA:6X0) announced that as a result of delays to its audit, the company's annual financial statements and accompanying management's discussion and analysis for the fiscal year ended December 31, 2021 are not expected to be finalized by May 2, 2022, being the date that such filings are due under applicable Canadian securities law requirements. The company has applied for a management cease trade order by the British Columbia Securities Commission.
The reason for the anticipated delay is due to the complexity of the valuation process and accounting of one of the acquisitions completed by the company in the fiscal year and enhanced quality controls by the issuer's auditors. The auditors have requested more time for partner and consultant review as part of those enhanced measures. The company is working with its auditor to complete the audit in a timely manner.
The company currently expects to file the annual filings on or before May 15, 2022. Until the company files the annual filings, it will comply with the alternative information guidelines set out in National Policy 12-203 - Management Cease Trade Orders for issuers who have failed to comply with a specified continuous disclosure requirement within the times prescribed by applicable securities laws.
During the MCTO, the general investing public will continue to be able to trade in the company's listed shares. However, the company's CEO and CFO will not be able to trade in the company's shares listed on the Canadian Securities Exchange.
Chalice Brands Ltd. (OTCQB:CHALF) (CSE:CHAL) announced that it was and is not in a position to file its annual audited financial statements for the year ended December 31, 2021 and its related management’s discussion and analysis and officer certifications by the prescribed filing deadline of May 2, 2022.
Despite its efforts, the company has not been able to complete its year-end audit process due to the change in auditors and related issues. Among other things, the new auditor’s internal staffing issues lead to extended time frames for the audit close process, along with their internal quality control procedures, which also has affected the ability to meet filing deadlines. The close process is ongoing. The work being conducted is assurance-related and is not expected to materially impact financial results.
Management does not expect the issues described above to impact the financial reporting for Q1 2022. The company will submit the required filings as soon as possible and anticipates doing so not later than June 15, 2022.
The company recognizes that this delay may result in the issuance of a failure to file cease trade order against the company.
