SAN FRANCISCO, CA / ACCESSWIRE / May 6, 2020 / Hagens Berman urges investors in Cronos Group Inc. (CRON) who have suffered losses in excess of $250,000 to submit their losses now. Only five days remain until the May 11, 2020 lead plaintiff deadline in a securities fraud class action that has been filed against the company and senior executives.
Cronos Group Inc. (CRON) Securities Class Action:
The complaint alleges that, while touting Cronos' revenue growth, Defendants concealed that Cronos engaged in significant transactions and improperly recognized revenue from them. According to the complaint, Cronos also misstated the value of its inventory in its financial statements.
The market began to learn the truth: (1) first on Feb. 24, 2020, when Cronos announced it would delay its Q4 and FY 2019 earnings release and conference call, previously scheduled for Feb. 27, 2020, (2) second on Mar. 2, 2020, when Cronos announced that its Audit Committee was reviewing the Company's recognition of revenue from several bulk resin transactions made through its wholesale channel, (3) third on Mar. 17, 2020, when Cronos announced it will restate previously issued financial statements for Q1 - Q3 2019 to eliminate revenues recognized from certain wholesale transactions, (4) fourth, on Mar. 20, 2020, when MarketWatch reported that the SEC opened an inquiry into Cronos' revenue recognition.
On Mar. 30, 2020, Defendants released restated financials for the first three quarters of 2019, admitting that Cronos massively overreported accounts receivable, gross revenues and gross profits before fair value adjustments. In addition, the Company reported a gross loss of nearly $20.4 million for Q4 2019, driven by inventory write-downs of $24 million, including a $22.1 million charge on the value of its cannabis plants.
"We're focused on investors' losses and proving Cronos misled investors about its reported revenue, receivables, and inventory," said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you purchased shares of Cronos and suffered significant losses, click here to discuss your legal rights with Hagens Berman.
Whistleblowers: Persons with non-public information regarding Cronos should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email CRON@hbsslaw.com.
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Reed Kathrein, 844-916-0895
SOURCE: Hagens Berman
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