Champignon Brands Restates Financial Statements and MD&A Files Listing Statement

Rhea-AI Summary

Champignon Brands Inc. (CSE: SHRM, OTCQB: SHRMF) has refilled its financial statements and management discussion for the periods ending March 31, 2020, following a review by the British Columbia Securities Commission. The restatement reflects significant changes: the net loss for the three-month period increased from $2,774,986 to $16,329,497, and for the six-month period, from $2,916,302 to $16,470,813, both showing an increase of $13,554,511. Additionally, the company must file a new Listing Statement for its shares to resume trading on the Canadian Securities Exchange.

Positive

• The Company has completed necessary filings to lift existing cease trade orders.
• The updated financial statements provide clarity on past acquisition-related accounting.

Negative

• Net losses significantly increased, raising concerns about financial health.
• The need for a new Listing Statement indicates ongoing trading issues and regulatory concerns.

VANCOUVER, BC, March 11, 2021 /PRNewswire/ - Champignon Brands Inc. (the "Company"), (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 refiled 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 "Restated Financial Statements and MD&A").

Restated Financial Statements

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"). Subsequent to the issuance of the Company's condensed interim consolidated financial statements for the period ended March 31, 2020 and for the period from incorporation on March 26, 2019 to March 31, 2019, management determined that the financial statements needed to be restated to correct for the accounting for the Acquisitions. The Company determined that the intangible assets did 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 effect of the restatement did not affect the Company's cash position.

As a result, the net loss and comprehensive loss for the restated three month period ended March 31, 2020 increased from $2,774,986 to $16,329,497 and for the six month period ended increased from $2,916,302 to $16,470,813, in each case increasing by $13,554,511. Consideration paid in excess of identifiable assets on the Acquisitions was restated to $13,517,014 from $nil for the three and six month periods ended March 31, 2020. The balance of Intangible Assets as at March 31, 2020 was restated to $111,929 from $11,860,462. Share Capital as at March 31, 2020 was restated to $17,373,727 from $15,603,227.

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 Company has disclosed the proceeds paid to the Consultant and the stock options issued to the Consultant as related party transactions in the Restated Financial Statements and MD&A. The Consultant was also a shareholder of each of the entities which were the subject of the Acquisitions and received shares of the Company as part of the consideration issued by the Company in respect of the Acquisitions. There are no ongoing contractual or other commitments with the Consultant resulting from the Acquisitions. On November 17, 2020 the Company terminated the consulting agreement with the Consultant. For details, see the Related Party Transactions section of the Restated March 31, 2020 MD&A filed under the Company's profile on the SEDAR website at www.sedar.com or on the Company's website at www.champignonbrands.com.

Complete details on the effect of the restatements are included in the notes to the Restated Financial Statements and in the MD&A.

The Restated Financial Statements and MD&A supersede the previously filed financial statements and MD&A. Such previously filed financial statements and MD&A should be disregarded. The Restated Financial Statements and MD&A are available for review under the Company's profile on the SEDAR website at www.sedar.com or on the Company's website at www.champignonbrands.com.

Interim Financial Statements

The Company concurrently filed the 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 "Interim Financial Statements and MD&A"). The Interim Financial Statements and MD&A 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.

CSE Listing Status/Cease Trade Orders

The Company intends to complete a new Listing Statement with the Canadian Securities Exchange ("CSE") to reflect the acquisition of AltMed and the RTO. In addition to the lifting of the existing cease trade orders issued by the Commission, the filing of the new Listing Statement will be required by the CSE 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.

All of these filings have now been completed by the Company. The Company's new management team is cooperating fully and 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 existing cease trade orders will be lifted, the new Listing Statement completed, and trading 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.

Forward-looking Information Cautionary Statement

This news release contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations, or beliefs of future performance are "forward-looking statements." Forward-looking statements include statements with respect to the completion of a new Listing Statement with the CSE, the lifting of the existing cease trade orders by the Commission and the reinstatement of trading in the Company's Common Shares on the CSE.  Forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Such forward- looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events, or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, the Company's requirements for additional financing, and the effect of capital market conditions and other factors on capital availability, the Company's limited operating history and lack of historical profits; competition; failure of treatments to provide the expected health benefits; unanticipated side effects; dependence on obtaining and maintaining regulatory approvals, including acquiring and renewing federal, provincial, state, municipal, local or other licenses; developments and changes in laws and regulations, including increased regulation of the Company's industries and the capital markets; economic and financial conditions; volatility in the capital markets; engaging in activities that could be later determined to be illegal under domestic or international laws; failure to obtain the necessary shareholder, government or regulatory approvals, including that of the CSE; and failure to retain, secure and maintain key personnel and strategic partnerships including but not limited to executives, researchers, clinicians, customers and suppliers. These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. Although the Company has attempted to identify important risk factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other risk factors that cause actions, events or results to differ from those anticipated, estimated or intended. Additional information identifying risks and uncertainties that could affect financial results is contained in the Company's filings with Canadian securities regulators, which are available at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. The Company has no obligation to update any forward-looking statement, even if new information becomes available.

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SOURCE Champignon Brands Inc.

FAQ

What are the recent financial reporting updates for Champignon Brands (SHRMF)?

Champignon Brands has restated its financial statements for periods ending March 31, 2020, reporting increased net losses.

How much did net loss increase for Champignon Brands as per the latest restatement?

The net loss for the three-month period increased from $2,774,986 to $16,329,497, while the six-month loss rose from $2,916,302 to $16,470,813.

What is required for Champignon Brands to resume trading on CSE?

The company must complete a new Listing Statement to lift existing cease trade orders and allow shares to resume trading.

What prompted Champignon Brands to restate its financial statements?

A review by the British Columbia Securities Commission led to the restatement to correct accounting for acquisitions.

How does the restatement affect Champignon Brands' financial health?

The restatement has revealed higher losses, which may raise concerns among investors regarding the company’s financial stability.