Ascent Industries (CSE: ASNT) continued its downward spiral yesterday, announcing in a news release that two investigations are under way simultaneously. While one appears to be self imposed, the other has been initiated by Combined Forces Special Enforcement Unit of British Columbia (CFSEU-BC).
The CFSEU-BC is a governmental organization focused on dismantling crime groups within the province, with a focus on organized crime and gang violence. In short, if they are currently investigating certain members of Ascent, or the operations in which it conducted, its almost assuredly bad news for investors.
The news of this investigation follows a release issued on Monday, wherein Ascent announced the sale of its Canadian operations to that of BZAM Management for $41.5 million. As a result, Ascent may just barely avoid the shame of being labelled as one of the first producers to lose its license. While the current status is unknown due to ongoing investigations and the now completed sale of the assets, its no longer Ascent’s problem to worry about.
While the firm may not hold the material assets of the operation currently, it is still liable for any illegal activity that may have occurred on the premises during the time in which they were owned. Further to this, if management was aware or partook in these activities themselves, Ascent may be held responsible and face penalties as a result.
While this investigation is underway, the company has engaged a forensic auditor to review certain transactions that occurred over a one year period beginning in June 2017. While this appears to be self imposed, the investigation itself lends credence to the investigation by CFSEU-BC. It’s likely that these accounting irregularities were brought to managements attention via the ongoing investigation.
Upon completion of the forensic accounting review, the intent is for Ascent to review this information with its independent auditor. This is then to be likely followed by restated financials for the affected periods, culminating in the delay of annual financials due at the end of April. Thus, Ascent is currently expecting that it will miss the deadline for its financial statements.
Speaking to its Nevada operations, things aren’t in much better shape. The scheduled hearing related to the firms business license within the state has been postponed for a second time. While it was originally to occur on March 28, it was postponed originally by Clark County’s Department of Business License. The rescheduled date of April 10 has now been pushed out as well, with a new date not currently being set.
Ascent has a hearing related to the status of its business license after two undercover agents attended a party back in November 2018 at Cosmopolitan Hotel, wherein they have evidence of certain regulations being broken by members of the Ascent team.
Ascent’s stock has been halted for trading on the CSE since March 18, the date on which it first identified a potential sale of its Canadian assets to an investment group. It last closed at a price of $0.10 per share.
Information for this briefing was found via Sedar, and Ascent Industries. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.