UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 16, 2024 (April 11, 2024)
(Exact name of registrant as specified in its charter)
British Columbia, | N/A | |||||||
| (State or other jurisdiction | (Commission | (I.R.S. Employer | ||||||
| of incorporation) | File Number) | Identification No.) | ||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
Registrant’s telephone number, including area code: (416 ) 504-0004
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 4.01. Changes in Registrant’s Certifying Accountant.
On April 11, 2024, KPMG LLP (“KPMG”), the current independent registered public accounting firm of Cronos Group Inc. (the “Company”), informed the Company that it will not stand for re appointment for the Company’s 2024 annual audit. KPMG indicated that its notification was a result of its decision to cease providing financial statement audit services to companies in the cannabis industry, regardless of the jurisdiction in which they operate. The Company anticipates that KPMG will continue to review its quarterly interim financial results through the first two fiscal quarters of 2024. The Company intends to promptly initiate a process to appoint a new independent registered public accounting firm.
KPMG did not seek the Company’s consent to its decision to not stand for re-appointment as the Company’s independent registered public accounting firm. As a result, neither the Company’s Board of Directors nor the Audit Committee of the Company’s Board of Directors participated in KPMG’s decision.
KPMG issued unqualified reports on the Company’s consolidated financial statements for the fiscal years ended December 31, 2023 and 2022, as well as an unqualified report on the effectiveness of the Company’s internal control over financial reporting for the year ended December 31, 2023. KPMG issued an adverse opinion on the Company’s internal control over financial reporting as of the year ended December 31, 2022 due to the existence of a material weakness.
During the Company’s fiscal years ended December 31, 2022 and 2023, and the subsequent interim period through April 12, 2024, there were no “disagreements” between the Company and KPMG within the meaning of Item 304(a)(1)(iv) of Regulation S-K or “reportable events” within the meaning of Item 304(a)(1)(v) of Regulation S-K (other than the material weakness referred to above) with respect to the Company.
In accordance with Item 304(a)(3) of Regulation S-K, the Company provided KPMG with a copy of the disclosures it is making in this Current Report on Form 8-K and requested from KPMG a letter addressed to the Securities and Exchange Commission indicating whether it agrees with such disclosures. A copy of KPMG’s letter dated April 16, 2024 is attached as Exhibit 16.1 hereto.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |||||||
| 16.1 | ||||||||
| 104 | Cover Page Interactive Data File – The cover page from Cronos Group Inc.’s Current Report on Form 8-K filed on April 16, 2024 is formatted in Inline XBRL. | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CRONOS GROUP INC. | |||||||||||
| Dated: April 16, 2024 | By: | /s/ Michael Gorenstein | |||||||||
| Name: Michael Gorenstein | |||||||||||
| Title: President and Chief Executive Officer | |||||||||||
KPMG LLP
Vaughan Metropolitan Centre 100 New Park Place
Suite 1400
Vaughan, ON, L4K 0J3 Telephone (905) 265-5900
Fax (905) 265-6390
www.kpmg.ca
April 16, 2024
Securities and Exchange Commission Washington, D.C. 20549
Ladies and Gentlemen:
We are currently the independent registered public accounting firm of Cronos Group Inc. (the “Company”) and, under the date of February 29, 2024, we reported on the consolidated financial statements of Cronos Group Inc. as of and for the years ended December 31, 2023 and 2022 and the effectiveness of internal control over financial reporting as of December 31, 2023. Our reports on the consolidated financial statements of the Company as of and for the years ended December 31, 2023 and 2022 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles.
Our report on the effectiveness of internal control over financial reporting as of December 31, 2023 did not contain an adverse opinion or disclaimer of opinion. Our report on the effectiveness of internal control over financial reporting as of December 31, 2022, dated February 28, 2023, indicates that the Company did not maintain effective internal control over financial reporting because of the effect of a material weakness on the achievement of the objectives of the control criteria and contains an explanatory paragraph that states a material weakness related to the design and maintenance of effective controls over Information Technology General Controls, pertaining to user access management and the provisioning and monitoring of user access, including privileged access was identified by management.
On April 11, 2024, we notified the Company that we decided to decline to stand for re-appointment as the registered public accounting firm of the Company, but that we will remain the Company’s independent registered public accounting firm until the completion of our review of the consolidated interim financial statements of the Company and its subsidiaries as of and for the three months ended March 31, 2024, and if requested by the Company, as of and for three and six months ended June 30, 2024.
We have read Cronos Group Inc.’s statements included under Item 4.01 of its Form 8-K dated April 16, 2024, and we agree with such statements.
Very truly yours,
/s/ KPMG LLP
KPMG LLP, an Ontario limited liability partnership and member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.
KPMG Canada provides services to KPMG LLP.