Champignon Brands Inc., the shroom stocks early market capitalization leader, was served a Cease Trade Order (CTO) by the British Columbia Securities Commission (BCSC) on Friday, June 19th halting the trading of its shares until the BCSC revokes the order.
These acquisitions were announced in Q1 2020, but the associated documentation has not been filed within the 75 day deadline from date of acquisition. At the time of these acquisitions management and their counsel may not have considered these to individually be considered "significant acquisitions" and this could account for this oversight. This is pure speculation on our part so we'll have to wait for official comment.
Champignon has been extremely active on the M&A front announcing what we counted as 5 acquisitions in the last +3 months and several management changes including a new CEO in May. That's a lot of business to integrate beyond just announcing the news releases.
Cease trade orders remain in effect indefinitely, until they are revoked by the British Columbia Securities Commission. This CTO will remain in effect until the outstanding Business Acquisition (BAR) reports are filed.
What's included in a Business Acquisition Report? Here's a link to the requirements under Form 51-102F4
Rightfully so, investors all weekend have been concerned turning to Twitter and other platforms for answers. We'll have to wait for the real unbiased ones.
UPDATE, here's an official news release from Champignon Brands issued earlier this morning:
VANCOUVER, British Columbia, June 22, 2020 – Champignon Brands Inc. (“Champignon” or the “Company”) (CSE: SHRM) (FWB: 496) (OTCQB: SHRMF) announces that it has been selected for a continuous disclosure review by the British Columbia Securities Commission (the “Commission”). The review relates to the Company’s disclosure obligations since it became a reporting issuer on February 6, 2020 and includes a review of the disclosure surrounding certain recent acquisitions completed by the Company.
“With the recent growth and interest in our industry, ensuring our disclosure obligations are satisfied is at the forefront of our attention. Ensuring fulsome and timely disclosure is vital to the success of our Company, and development of our industry with the investing public. We look forward to working with staff of the British Columbia Securities Commission to complete their review, and are hopeful that trading will resume as soon as possible,” commented Dr. Roger McIntyre, Chief Executive Officer of the Company.
In connection with the review, the Commission has issued a cease trade order suspending trading in the securities of the Company pending the filing of business acquisition reports by the Company in connection with the acquisitions of Artisan Growers Ltd., Novo Formulations Ltd. and Tassili Life Sciences Corp. As a result of the cease trade order, trading in the common shares of the Company has been suspended on the Canadian Securities Exchange.
The Company will fully cooperate with the Commission, to assist in completion of the review and revocation of the cease trade order in a timely fashion. The Company will provide further information regarding the status of the review, and the suspension of trading, as it becomes available.
ON BEHALF OF THE BOARD OF DIRECTORS
FOR INVESTOR INQUIRIES:
Champignon Brands | Storyboard Communications
Investor Relations, Toronto, Canada
Investor Line: +1 (833) 375-9995 x611
FOR CHAMPIGNON BRANDS FRENCH INQUIRIES:
Remy Scalabrini, Maricom Inc.
T: (888) 585-MARI
The CSE and Information Service Provider have not reviewed and does not accept responsibility for the accuracy or adequacy of this release.
Forward-looking Information Cautionary Statement
Except for statements of historic fact, this news release contains certain “forward-looking information” within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate” and other similar words, or statements that certain events or conditions “may” or “will” occur. Forward-looking statements are based on the opinions and estimates at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements including, but not limited to delays or uncertainties with regulatory approvals, including that of the CSE. There are uncertainties inherent in forward-looking information, including factors beyond the Company’s control. There are no assurances that the business plans for Champignon Brands described in this news release will come into effect on the terms or time frame described herein. The Company undertakes no obligation to update forward-looking information if circumstances or management’s estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. 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.
We do caution investors here that the only opinion that will ultimately matter is that of the regulators, in this case the BCSC but the above news release does include a fairly confident quote related to a regulatory matter from the new CEO. We read this as a positive as public companies are usually very conservative when addressing legal or regulatory matters.