Item 5. Other Information
Item 5. Other Information.
Rule 10b5-1 Trading Plans
Securities Trading Plans of Directors and Executive Officers
During the three months ended June 30, 2023, no directors or executive officers entered into , modified or terminated , contracts, instructions or written plans for the sale or purchase of the Company’s securities that were intended to satisfy the affirmative defense conditions of Rule 10b5-1.
Certain of our officers or directors have made, and may from time to time make, elections to have shares withheld to cover withholding taxes or pay the exercise price of options, which may be designed to satisfy the affirmative defense conditions of Rule 10b5-1 under the Exchange Act or may constitute non-Rule 10b5–1 trading arrangements (as defined in Item 408(c) of Regulation S-K).
Item 2.05 Costs Associated with Exit or Disposal Activities.
On August 4, 2023, the Company’s Board of Directors (the “Board”) approved plans to wind-down operations at its Winnipeg, Manitoba facility (“Cronos Fermentation”), and list the Cronos Fermentation facility for sale. The Company expects to incur approximately $1.2 million in restructuring costs associated with the exit of Cronos Fermentation facility. These charges include employee-related costs such as severance, relocation and other termination benefits, as well as contract termination and other related costs, which are expected to be incurred primarily in the second half of 2023, but do not include any impairment charges to property, plant or equipment. These anticipated charges are subject to a number of assumptions, including the ability to wind down Cronos Fermentation efficiently and effectively, the length of the sales process, the bids received in the sale process, market factors and others. As a result of these assumptions, actual results may differ materially. The Company cannot, at this time, quantify the impairment charges, if any, to long-lived assets associated with the wind-down of Cronos Fermentation.
Also on August 4, 2023, the Board approved additional organization-wide cost reductions. Expected restructuring costs of approximately $2.0 million, with the majority expected to be incurred in the second half of 2023, include mostly one-time employee-related severance charges. These anticipated costs are subject to a number of assumptions, including the ability of the Company to
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effectively and efficiently further streamline operations, the number of employee reductions, the timing of employee reductions, the level of the Company’s operations, market factors and others. As a result of these assumptions, actual results may differ materially.
Item 2.06 Material Impairments.
The information disclosed above under Item 2.05 is hereby incorporated by reference. The Company cannot, at this time, quantify the impairment charges, if any, to long-lived assets associated with the wind-down of Cronos Fermentation.
Item 6. Exhibits
The exhibits listed in the Exhibit Index immediately below are filed as part of this Quarterly Report, which Exhibit Index is corporate by reference herein.
Exhibit Number Exhibit Index
3.1 Certificate of Continuance, Notice of Articles and Articles of Cronos Group Inc. (incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q of Cronos Group Inc., filed August 6, 2020).
31.1* Certification of the Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2* Certification of the Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1** Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2** Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS* XBRL Instance Document.
101.SCH* XBRL Taxonomy Extension Schema Document.
101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF* XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB* XBRL Taxonomy Extension Label Linkbase Document.
101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document.
† Management contract or compensatory plan or arrangement.
* Filed herewith.
** Furnished herewith and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
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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 thereunto duly authorized.
CRONOS GROUP INC.
By: /s/ James Holm
James Holm
Chief Financial Officer
August 8, 2023
By: /s/ Jimmy McGinness
Jimmy McGinness
Vice President, Controller, and Principal Accounting Officer
August 8, 2023
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.