PROVIDES DEFAULT STATUS REPORT AND OTHER UPDATES Canntrust Holdings Inc. is providing a status update in accordance with its obligations under the alternative information guidelines set out in National Policy 12-203 (Management Cease Trade Orders), which require the company to provide biweekly updates until such time as the company is current with its filing obligations under Canadian securities laws. As previously announced, the company is subject to a management cease trade order (MCTO) issued by the Ontario Securities Commission. The MCTO prohibits the directors and executive officers of the company from trading in or acquiring securities of the company until two full business days after the company files an interim financial report for the three- and six-month periods ended June 30, 2019, an interim management's discussion and analysis for the corresponding period, and certifications of interim filings. The MCTO does not affect the ability of investors who are not insiders to trade in the company's securities.
Timing of financial results and Toronto Stock Exchange listing update
Canntrust continues to make progress in working with its independent auditor to complete its restated audited financial statements for the year ended Dec. 31, 2018, its restated interim financial statements for the first quarter of 2019, and its interim financial statements for the second and third quarters of 2019, together with the related management's discussion and analysis for the corresponding periods. As disclosed in the company's Nov. 21, 2019, news release, these financial statements are unlikely to be completed and filed before the end of the calendar year.
On Nov. 26, 2019, Canntrust announced that, as a result of the delay in filing the aforementioned financial disclosures, the Toronto Stock Exchange intended to review the company's eligibility to continue listing its common shares. The TSX advised that if the company is unable to satisfy its disclosure requirements by March 25, 2020, the company's securities will be delisted 30 days following this date. The company fully anticipates filing the associated disclosures and meeting the TSX's requirements prior to March 25, 2020.
As at Nov. 30, 2019, Canntrust had approximately $185-million of cash liquidity. The company has no borrowings.
Update on remediation efforts
Canntrust continues to make progress on its remediation efforts and anticipates completing all of the activities described within its remediation plan by the end of the first quarter of 2020, although completion will be subject to Health Canada's input and approval. To that end, the company and Health Canada have already engaged on various aspects of the remediation plan.
Litigation update
Canntrust was either served or became aware of putative class action lawsuits in Canada and the United States against the company and certain of its current and former directors, officers and employees relating to the drop in its share price after July 8, 2019. The company expects the number of putative class actions against it to be consolidated in the coming months. Recently, the company became aware of a lawsuit by Zola Finance Holdings Ltd. and Igor Gimelshtein that also relates to the drop in its share price after July 8, 2019. The total amounts claimed in the lawsuits overlap and have not been quantified at the present time. The company has not currently recorded any uninsured amount related to this contingency.
Canntrust further advises that:
Other than as disclosed above, there have been no material changes to the information contained in the company's Aug. 16, 2019, news release, Aug. 29, 2019, news release, Sept. 12, 2019, news release, Sept. 26, 2019, news release, Oct. 10, 2019, news release, Oct. 24, 2019, news release, Nov. 7, 2019, news release and Nov. 21, 2019, news release.
The company intends to continue to comply with the alternative information guidelines of NP 12-203.
Except as previously disclosed, there are no subsequent specified defaults (actual or anticipated) within the meaning of NP 12-203.