TORONTO - FSD Pharma Inc. (NASDAQ:HUGE)(CSE:HUGE)(FRA:0K9A), a biopharmaceutical company, announced today that the United States District Court for the Eastern District of Pennsylvania has confirmed multiple arbitration awards against its former CEO, Dr. Raza Bokhari.
The confirmation follows a Canadian arbitrator's decision from 2022, which resulted from a dispute over Bokhari's termination as CEO in July 2021.
The court's decision, which aligns with the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, allows FSD Pharma to proceed with the entry of final judgment against Bokhari.
The financial awards include USD $147,301.04 and CAD $31,912.55, both with interest accruing at a rate of 4% per annum from November 9, 2022, as well as CAD $15,000.00 at the same interest rate. Additionally, Bokhari owes CAD $2,814,229.15 with a 6% interest rate per annum from May 7, 2023, until full payment is made.
The legal action stems from Bokhari's challenge to his dismissal by the company's board of directors. After extensive litigation and an eight-day evidentiary hearing, the arbitrator ruled in favor of FSD Pharma, issuing three awards that included damages and reimbursement for the company's legal fees and costs associated with the arbitration.
FSD Pharma focuses on developing innovative treatments for neurodegenerative and metabolic disorders, as well as alcohol misuse disorders, with its lead compound, Lucid-MS, currently under research and development. The company also retains a significant tax loss carry forward and maintains a portfolio of strategic investments.
The information in this article is based on a press release statement from FSD Pharma Inc.
InvestingPro Insights
In light of FSD Pharma Inc.'s recent confirmation of arbitration awards, investors may be seeking context for the company's financial health and stock performance. According to InvestingPro data, FSD Pharma has a market capitalization of $12.34 million USD, which can provide a sense of the company's size in the biopharmaceutical industry. Notably, the company's stock has been under considerable pressure, with a one-week price total return of -11.38% and a staggering one-year price total return of -71.03%, reflecting the challenges FSD Pharma has faced in the market.
Despite these market pressures, InvestingPro Tips suggest a silver lining, with the company holding more cash than debt on its balance sheet, which may provide it with some financial flexibility during this period of legal and operational challenges. Additionally, while the company has not been profitable over the last twelve months, analysts predict that FSD Pharma will be profitable this year. This could indicate potential for a turnaround, with the company's research and development efforts possibly leading to successful outcomes.
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