SHAREHOLDER ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors Cronos Group Inc. - CRON

Pomerantz LLP is investigating claims on behalf of investors of Cronos Group Inc. ("Cronos" or the "Company") (NASDAQ:CRON). Such investors are advised to contact Robert S. Willoughby at newaction@pomlaw.com or 888-476-6529, ext. 7980

The investigation concerns whether Cronos and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.

[Click here for information about joining the class action]

On November 9, 2021, Cronos filed a Form 8-K with the U.S. Securities and Exchange Commission, stating that "[o]n November 8, 2021, Cronos Group Inc. . . . determined that it will be required to restate its previously issued unaudited interim financial statements for the three and six months ended June 30, 2021 previously filed on Form 10-Q on August 6, 2021" and advising that "[t]he Company's financial statements for this period should therefore no longer be relied upon." Cronos further stated that "[t]he Company concluded that it should have recorded an impairment charge of not less than $220 million on goodwill and indefinite-lived intangible assets in its U.S. reporting unit for the three and six months ended June 30, 2021. The Company will restate its unaudited interim financial statements for the three and six months ended June 30, 2021, accordingly." According to Cronos, the Company "is also evaluating whether to record an additional impairment in the three and nine months ended September 30, 2021."

On this news, Cronos's stock price fell $1.01 per share, or 15.05%, to close at $5.70 per share on November 9, 2021.

The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com

SOURCE: Pomerantz LLP

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Cronos Group CRON:CA CRON Cannabis Investing

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Summary of Key Financial Metrics	Three Months Ended			Nine Months Ended
US $ in millions	September 30,			September 30,
	2023	2022	Variance	2023	2022	Variance

GAAP Revenue	$24.7	$18.9	30.9%	$64.0	$55.6	15.1%
Revenue (excluding discontinued operations)	$24.7	$17.1	44.0%	$62.0	$48.2	28.4%
GAAP Gross Profit	$13.2	$9.5	38.4%	$32.0	$22.4	43.1%
Gross Profit Margin	53.5%	50.6%	290 bps	50.1%	40.3%	980 bps
SG&A Expenses	$6.7	$8.5	-20.5%	$22.0	$26.4	-16.8%
SG&A Expenses (% of Sales)	27.4%	45.0%	1,760 bps	34.3%	47.5%	1,320 bps
Operating Income (Loss)	$5.9	($0.2)	NM	$5.2	($7.6)	NM
Operating Income Margin	23.8%	(1.0%)	2,480 bps	8.1%	-13.7%	2,180 bps
EBITDA	$7.0	($1.2)	NM	$11.3	($10.8)	NM
EBITDA Margin	28.5%	(6.5%)	3,500 bps	17.7%	(19.4%)	3,710 bps
NM = Not Meaningful


Core Market KPIs ¹	Three Months Ended			Nine Months Ended
US $ in millions	September 30,			September 30,
	2023	2022	Variance	2023	2022	Variance
Total Harvest Pounds (Biomass)	9,111	7,530	21.0%	27,142	20,727	30.9%
% "A" Flower ²	20.5 %	18.7 %	180 bps	19.5 %	16.9 %	260 bps
Total Retail Revenue	$20.1	$14.7	37.4%	$51.8	$40.9	26.8%
Same Store Sales Growth	-	-	37.4%	-	-	26.8%
Minnesota	-	-	15.0 %	-	-	26.6 %
New York	-	-	-14.0%	-	-	-16.7%
Maryland	-	-	229.4 %	-	-	88.7 %
Total Wholesale Revenue	$4.5	$2.5	83.7%	$9.9	$7.4	34.5%
¹ Core Markets refer to the Company's operations in Maryland, Minnesota, and New York.
² "A Flower" refers to produced biomass that meet the Company's highest internal standards for flower quality, size, and appearance.


GOODNESS GROWTH HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS AS OF 9/30/2023 AND 12/31/2022
(Amounts Expressed in United States Dollars, Unaudited and Condensed)
	September 30,			December 31,
	2023			2022
Assets
Current assets:
Cash	$	13,296,137		$	15,149,333
Accounts receivable, net of allowance for doubtful accounts of $344,937 and $453,860, respectively		5,688,782			4,286,072
Inventory		19,056,338			20,508,023
Prepayments and other current assets		1,834,013			2,544,532
Notes receivable, current		3,750,000			—
Warrants Receivable		1,566,445			—
Assets Held for Sale		89,918,392			4,240,781
Total current assets		135,110,107			46,728,741
Property and equipment, net		23,812,949			89,606,932
Operating lease, right-of-use asset		2,182,174			6,110,787
Notes receivable, long-term		—			3,750,000
Intangible assets, net		8,935,019			8,776,946
Goodwill		—			183,836
Deposits		383,645			2,312,161
Deferred tax assets		1,245,000			1,687,000
Total assets	$	171,668,894		$	159,156,403
Liabilities
Current liabilities
Accounts Payable and Accrued liabilities	$	33,638,534		$	14,928,780
Long-Term debt, current portion		55,432,463			11,780,000
Right of use liability		907,998			1,680,294
Liabilities held for sale		75,439,119			1,319,847
Total current liabilities		165,418,114			29,708,921
Right-of-use liability		9,700,492			79,757,994
Other long-term liabilities		235,577			—
Convertible debt, net		5,107,477			—
Long-Term debt		4,060,633			46,248,604
Total liabilities	$	184,522,293		$	155,715,519
Stockholders' equity
Subordinate Voting Shares ($- par value, unlimited shares authorized; 108,332,330 shares issued and outstanding)		—			—
Multiple Voting Shares ($- par value, unlimited shares authorized; 347,940 shares issued and outstanding)		—			—
Super Voting Shares ($- par value; unlimited shares authorized; 0 shares issued and outstanding)		—			—
Additional Paid in Capital		185,991,816			181,321,847
Accumulated deficit		(198,845,215	)		(177,880,963	)
Total stockholders' equity	$	(12,853,399	)	$	3,440,884
Total liabilities and stockholders' equity	$	171,668,894		$	159,156,403


GOODNESS GROWTH HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Amounts Expressed in United States Dollars, Unaudited and Condensed)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2023			2022			2023			2022
Revenue	$	24,675,145		$	18,854,101		$	63,960,125		$	55,582,821
Cost of sales
Product costs		10,493,561			9,186,241			30,347,357			29,532,469
Inventory valuation adjustments		984,196			131,000			1,563,872			3,657,788
Gross profit		13,197,388			9,536,860			32,048,896			22,392,564
Operating expenses:
Selling, general and administrative		6,749,314			8,489,728			21,965,576			26,393,136
Stock-based compensation expenses		296,617			896,081			4,009,415			2,636,594
Depreciation		99,929			167,940			377,121			487,164
Amortization		180,034			172,267			498,828			516,800
Total operating expenses		7,325,894			9,726,016			26,850,940			30,033,694

Gain (loss) from operations		5,871,494			(189,156	)		5,197,956			(7,641,130	)

Other income (expense):
Impairment of long-lived assets		—			(2,108,703	)		—			(7,476,618	)
Gain (loss) on disposal of assets		(50,686	)		—			(2,798,567	)		168,359
Gain (loss) on sale of property and equipment		—			7,583			—			(3,347	)
Interest expenses, net		(7,915,658	)		(5,573,263	)		(22,795,242	)		(15,472,885	)
Other income (expenses)		345,824			79,750			6,166,472			1,196,975
Other income (expenses), net		(7,620,520	)		(7,594,633	)		(19,427,337	)		(21,587,516	)

Loss before income taxes		(1,749,026	)		(7,783,789	)		(14,229,381	)		(29,228,646	)

Current income tax expenses		(3,980,000	)		(1,790,000	)		(7,357,871	)		(4,130,000	)
Deferred income tax recoveries		500,000			1,150,000			623,000			4,185,000
Net loss and comprehensive loss		(5,229,026	)		(8,423,789	)		(20,964,252	)		(29,173,646	)
Net loss per share - basic and diluted	$	(0.04	)	$	(0.07	)	$	(0.16	)	$	(0.23	)
Weighted average shares used in computation of net loss per share - basic & diluted		141,332,852			128,120,949			132,576,879			128,114,570


GOODNESS GROWTH HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Amounts Expressed in United States Dollars, Unaudited and Condensed)
	September 30,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(20,964,252	)	$	(29,173,646	)
Adjustments to reconcile net loss to net cash used in operating activities:
Inventory valuation adjustments		1,563,872			3,657,788
Depreciation		377,121			487,164
Depreciation capitalized into inventory		1,846,418			1,959,536
Non-cash operating lease expense		423,821			852,687
Amortization of intangible assets		498,828			516,800
Amortization of intangible assets capitalized into inventory		24,779			—
Stock-based payments		4,009,415			2,636,594
Warrants receivable		(1,566,445	)		—
Interest Expense		5,111,930			3,430,733
Impairment of long-lived assets		—			7,476,618
Deferred income tax		(623,000	)		(4,185,000	)
Accretion		800,392			3,407,030
Loss (gain) on sale of property and equipment		—			3,347
Loss on disposal of Red Barn Growers		2,909,757			—
Loss (gain) on disposal of assets		(111,190	)		—
Gain on disposal of royalty asset		—			(168,359	)
Change in operating assets and liabilities:
Accounts Receivable		(902,709	)		(1,408,580	)
Prepaid expenses		684,987			(1,601,742	)
Inventory		(1,932,554	)		(2,205,236	)
Accounts payable and accrued liabilities		7,459,350			2,360,044
Change in assets and liabilities held for sale		(116,882	)		—
Net cash used in operating activities	$	(506,362	)	$	(11,954,222	)

CASH FLOWS FROM INVESTING ACTIVITIES:
PP&E Additions	$	(2,630,724	)	$	(4,938,587	)
Intangible license additions		(1,090,919	)		—
Proceeds from sale of Red Barn Growers net of cash		439,186			387,512
Proceeds from sale of property, plant, and equipment		242,088			—
Proceeds from sale of royalty asset		—			236,635
Deposits		(263,545	)		(482,539	)
Net cash provided by (used in) investing activities	$	(3,303,914	)	$	(4,796,979	)

CASH FLOWS FROM FINANCING ACTIVITIES	$			$
Proceeds from long-term debt, net of issuance costs		—			24,868,143
Proceeds from convertible debt, net of issuance costs		5,348,140			—
Proceeds from option exercises		—			7,201
Debt principal payments		(1,976,362	)		—
Lease principal payments		(1,414,698	)		(1,437,346	)
Net cash provided by (used in) financing activities	$	1,957,080		$	23,437,998

Net change in cash	$	(1,853,196	)	$	6,686,797
Cash, beginning of period	$	15,149,333		$	15,155,279
Cash, end of period	$	13,296,137		$	21,842,076

Investor Inquiries: Sam Gibbons Managing Director sam.gibbons@alpha-ir.com (612) 314-8995	Media Inquiries: Amanda Hutcheson Senior Manager, Communications amandahutcheson@goodnessgrowth.com (919) 815-1476


GOODNESS GROWTH HOLDINGS, INC. STATE-BY-STATE REVENUE PERFORMANCE THREE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

	Three Months Ended
	September 30,
	2023		2022			$ Change			% Change
Retail:
MN	$	11,791,001	$	10,252,523		$	1,538,478		15		%
NY		2,185,701		2,541,913			(356,212	)	(14	)	%
NM		—		1,721,017			(1,721,017	)	(100	)	%
MD		6,170,372		1,873,773			4,296,599		229		%
Total Retail	$	20,147,074	$	16,389,226		$	3,757,848		23		%

Wholesale:
MD		2,923,376		1,333,864			1,589,512		119		%
NY		1,375,730		1,131,011			244,719		22		%
NM		—		—			—		100		%
Total Wholesale	$	4,299,106	$	2,464,875		$	1,834,231		74		%

MD Service Revenue		228,965		—			228,965		100		%

Total Revenue	$	24,675,145	$	18,854,101		$	5,821,044		31		%
AZ and NM Revenue	$	—	$	(1,721,017	)	$	1,721,017		(100	)	%
Total Revenue excluding AZ and NM	$	24,675,145	$	17,133,084		$	7,542,061		44		%


Reconciliation of Net Loss to EBITDA

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2023			2022			2023			2022
Net income (loss)	$	(5,229,026	)	$	(8,423,789	)		(20,964,252	)		(29,173,646	)
Interest expense, net		7,915,658			5,573,263			22,795,242			15,472,885
Income taxes		3,480,000			640,000			6,734,871			(55,000	)
Depreciation & Amortization		279,963			340,207			875,949			1,003,964
Depreciation included in cost of goods sold		577,132			645,480			1,871,197			1,959,536
EBITDA (non-GAAP)	$	7,023,727		$	(1,224,839	)		11,313,007			(10,792,261	)

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