VAUGHAN, ON, Dec. 5, 2019 /CNW/ – CannTrust Holdings Inc. (“CannTrust” or the “Company”, TSX: TRST, NYSE: CTST) today is providing a status update in accordance with its obligations under the alternative information guidelines set out in National Policy 12-203 – Management Cease Trade Orders (“NP 12-203”), which require the Company to provide bi-weekly updates until such time as the Company is current with its filing obligations under Canadian securities laws. As previously announced, the Company is subject to a management cease trade order (“MCTO”) issued by the Ontario Securities Commission. The MCTO prohibits the directors and executive officers of the Company from trading in or acquiring securities of the Company until two full business days after the Company files an interim financial report for the three and six month periods ended June 30, 2019, an interim management’s discussion and analysis for the corresponding period and certifications of interim filings. The MCTO does not affect the ability of investors who are not insiders to trade in the Company’s securities.
Timing of Financial Results and TSX Listing Update
CannTrust continues to make progress in working with its independent auditor to complete its restated audited financial statements for the year ended December 31, 2018, its restated interim financial statements for the first quarter of 2019, and its interim financial statements for the second and third quarters of 2019, together with the related management’s discussion and analysis for the corresponding periods. As disclosed in the Company’s November 21, 2019 news release, these financial statements are unlikely to be completed and filed before the end of the calendar year.
On November 26, 2019, CannTrust announced that, as a result of the delay in filing the aforementioned financial disclosures, the Toronto Stock Exchange (the “TSX”) intended to review the Company’s eligibility to continue listing its common shares. The TSX advised that if the Company is unable to satisfy its disclosure requirements by March 25, 2020, the Company’s securities will be delisted 30 days following this date. The Company fully anticipates filing the associated disclosures and meeting the TSX’s requirements prior to March 25, 2020.
As at November 30, 2019, CannTrust had approximately $185 million CAD of cash liquidity. The Company has no borrowings.
Update on Remediation Efforts
CannTrust continues to make progress on its remediation efforts and anticipates completing all of the activities described within its remediation plan by the end of the first quarter of 2020, although completion will be subject to Health Canada’s input and approval. To that end, the Company and of have already engaged in various aspects of the remediation plan.
CannTrust was either served or became aware of putative class action lawsuits in Canada and the United States against the Company and certain of its current and former Directors, officers, and employees relating to the drop in its share price after July 8, 2019. The Company expects the number of putative class actions against it to be consolidated in the coming months. Recently, the Company became aware of a lawsuit by Zola Finance Holdings Ltd. and Igor Gimelshtein that also relates to the drop in its share price after July 8, 2019. The total amounts claimed in the lawsuits overlap and have not been quantified at the present time. The Company has not currently recorded any uninsured amount related to this contingency.
CannTrust further advises that:
Other than as disclosed above, there have been no material changes to the information contained in the Company’s August 16, 2019 news release, August 29, 2019 news release, September 12, 2019 news release, September 26, 2019 news release, October 10, 2019 news release, October 24, 2019 news release, November 7, 2019 news release, and November 21, 2019 news release;
The Company intends to continue to comply with the alternative information guidelines of NP 12-203; and,
Except as previously disclosed, there are no subsequent specified defaults (actual or anticipated) within the meaning of NP 12-203.