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Champignon Brands to Restate Financial Statements and MD&A has Prepared CSE Listing Statement

Ryan Allway

February 17th, 2021

Psychedelics

Champignon Brands Inc. (CSE: SHRM) (FWB: 496) (OTCQB: SHRMF), announced that as a result of a review by the British Columbia Securities Commission (the “Commission”), the Company has determined 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 (the “Original Financial Statements and MD&A”).

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 Ltd., Novo Formulations Ltd. and Tassili Life Sciences Corp. (the “Acquisitions”) that aggregated approximately $12 million. Subsequent to 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 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.

In addition, it was determined that a shareholder and contracted consultant (the Consultant”) of the Company was a related party with respect to the Acquisitions.  As a result, the restated condensed interim consolidated financial statements and MD&A will include additional disclosure details with respect to related party transactions involving the Consultant.

The Company 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”). The September Interim Financial Statements and MD&A will reflect the acquisition of Altmed Capital Corp. (“Altmed”) on April 30, 2020 (the “Transaction”). The Transaction constituted a Reverse Takeover Transaction (“RTO”) of Champignon by Altmed. As a result, the fiscal year end of the Company for accounting and reporting purposes subsequent to April 30, 2020 will be Altmed’s fiscal year end of March 31.

The Company has submitted drafts of the restated condensed interim consolidated financial statements and management’s discussion & analysis (“MD&A”) for the three and six month periods ended March 31, 2020 (the “Restated Financial Statements and MD&A”) and the September Financial Statements and MD&A to the Commission 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

The Company has also today filed a draft of a new Listing Statement with the Commission 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 Commission and prior to the Company’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, and
  • certification of interim filings for the period ended June 30,2020.

Drafts of these filings have been submitted to the Commission for review.  The Company is working diligently with the Commission 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 (if ever) the Restated Financial Statements and MD&A and the September Financial Statements and MD&A will be filed. Similarly, there can be no assurance as to when (if ever) the existing cease trade orders will be lifted, the new Listing Statement will be completed and trading in the Company’s Common Shares will be reinstated on the CSE.

Champignon Brands Inc. (https://champignonbrands.com) 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. (“AltMed”). The Canadian Rapid Treatment Center of Excellence is wholly owned by AltMed.

ON BEHALF OF THE BOARD

“Dr. Roger McIntyre”
Dr. Roger McIntyre
Chairman & CEO

Call emergency medical services immediately if you believe you are experiencing a medical emergency. Do not rely on communication through the Champignon Brands website of the emails/telephone numbers above for urgent medical needs. Champignon Brands Inc. does not provide medical advice. If you have any specific medical questions or are seeking advice, please consult with your health care provider.

The CSE has not reviewed and does not accept responsibility for the accuracy or adequacy of this release.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

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