Mr. Bernie Yeung reports
ATLAS GLOBAL BRANDS ANNOUNCES DECISION TO RE-FILE INTERIM FINANCIAL STATEMENTS AND
PROVIDES UPDATE ON TIMING OF ANNUAL FINANCIAL STATEMENTS AND APPLICATION FOR A PARTIAL
REVOCATION ORDER
Atlas
Global Brands Inc. has determined it necessary to amend
and restate its unaudited consolidated interim financial statements for the three- and 12-month periods ended Dec. 31, 2022, and Dec. 31, 2021, comparable periods, and related
management's discussion and analysis thereon (together, the A&R interim financials) to reflect
certain adjustments to the accounting treatment of the reverse takeover (RTO) transaction completed
on Dec. 30, 2022, and described in detail in the company's news release of Jan. 4, 2023.
The nature and substance of proposed change
The adjustments to the accounting treatment of the RTO were discovered during the preparation
of the company's consolidated financial statements for the 15-month period ended March 31,
2023, and are attributable to the complexity in assessing the valuation and accounting of the
concurrent investment in Cambrosia Ltd., the reverse takeover of Silver Phoenix Resources Inc.,
the acquisitions of AgMedica Bioscience Inc., Atlas Biotechnologies Inc., and the indirect acquisition
of a 51-per-cent controlling interest in each of Tlalim Papo Ltd., Pharmacy Baron Ltd. and R.J. Regavim
Ventures Ltd., all having closed simultaneously and interdependent of one another.
Although recognition of provisional amounts and measurement period adjustments are normal
practice for purchase accounting, the magnitude of the changes were significant enough to
compel management to prepare the A&R interim financials to ensure greater transparency in the
subsequent reporting periods commencing with the audited fiscal year ending March 31, 2023.
In addition, adjustments related to expense accruals and the accounting for the private placement,
as well as certain reclassifications were made for financial presentation to align with the
company's consolidated financial statements for the 15-month period ended March 31, 2023. A
full description of the adjustments will be provided in the accompanying notes to the A&R interim
financials.
The company anticipates filing the A&R interim financials and Form 52-109F2R certifications by
the chief executive officer and chief financial officer on or prior to April 10, 2024.
Update on timing of annual financial statements
In addition, by way of update, the company also anticipates filing its audited annual consolidated
financial statements, and related management's discussion and analysis, and certifications for the
financial year ended March 31, 2023, on or prior to April 10, 2024 (collectively, the required
annual filings).
As more particularly set out in the news release filed on Aug. 9, 2023, on Aug. 8, 2023, the
Ontario Securities Commission (OSC), the company's principal regulator, issued a failure-to-file cease trade order (FFCTO) following the company's failure to file the required annual
filings by the filing deadline.
Application for partial revocation order
Finally, the company has made application for an application for a partial revocation of the FFCTO,
to permit the issue of 3,693,444 common shares to Shahar Management Group Company (KSN)
Ltd., an entity controlled by Avi Elkayam, an insider of the company, or to Mr. Elkayam, in either
case, as consideration for a loan to the company, the details of which are set forth in a news
release dated March 18, 2024. The company is currently in the process of responding to the initial
comment letter thereon from the OSC.
About Atlas Global Brands
Atlas Global is a global cannabis company operating in Canada and Israel with expertise across the
cannabis value chain, including cultivation, manufacturing, marketing and distribution. Atlas
Global currently distributes to eight countries: Australia, Canada, Denmark, Germany, Israel,
Norway, Spain and the United Kingdom. In addition to a differentiated product mix, Atlas Global
operates two licensed cannabis facilities, one of which has European Union good manufacturing
practices certification (EU-GMP), and three pharmacies in Israel.
We seek Safe Harbor.
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