Cronos Group (TSX: CRON) (NASDAQ: CRON) filed its annual report this evening, also known as a 10-K with the Securities and Exchange Commission. However, the filing itself wasn’t complete – resulting in the firm filing what is known as an “NT 10-K,” which in layman terms is a notification of the inability to timely file an annual report by the issuer. The company now has until mid-March to file complete annual financial statements.
While a modified annual report was filed by Cronos Group, it lacked the key data that is to be contained within an annual report – the necessary financial data. This was missing, as per Cronos Group, due to “a continuing review by the Audit Committee of the Company’s Board of Directors, with the assistance of outside counsel and forensic accountants, of several bulk resin purchases and sales of products through the wholesale channel and the appropriateness of the recognition of revenue from those transactions.”
Essentially, Cronos Group is currently using forensic accountants to determine whether or not it was appropriate to recognize certain revenues that previously appeared on the company’s financial statements. Primarily, these sales occurred through the wholesale channels that Cronos Group has established. The company has until March 15 to rectify the issue and file a complete annual report with the SEC or face further consequences.
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Cronos has indicated that it intends to file its financials within the allotted extension period, however can provide no guarantee that it will.
Cronos Group closed the regular session at $6.02 on the Nasdaq, and fell 6.48% in the extended session to $5.63.
Information for this analysis was found via Sedar and Cronos Group. 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.
