FSD Pharma Wins Legal Battle Against Former CEO; Ventures into Dietary Supplements

NEW YORK — In a significant legal triumph, FSD Pharma Inc. a Canadian biopharmaceutical firm, received a favorable ruling from the Ontario Superior Court of Justice on Thursday against its former chief executive, Dr. Raza Bokhari.

The conflict traces back to May, when an arbitration verdict mandated Bokhari to remit C$2.81 million to FSD Pharma due to unspecified disputes. Despite Bokhari’s contention against the ruling, the court upheld the decision.

Central to the court’s judgment was the contention that Bokhari, who currently heads Medicus Pharma Ltd., made unsanctioned attempts to move $12 million from FSD Pharma’s Canadian bank account to a U.S. account under his dominion. The judgment noted his breach of employment terms, specifically highlighting his alleged endeavors to reroute funds for personal use.

Bokhari’s rebuttal to the arbitrator’s resolution contended that the basis of depicting him as lacking credibility was inadequately reasoned. The court, however, aligned with the arbitrator’s perspective, suggesting Bokhari’s defenses were unpersuasive.

As a consequence of the court’s verdict, FSD Pharma is poised to reclaim the C$2.8 million awarded in May, along with a 6% interest. Additionally, Bokhari has been directed to bear FSD Pharma’s legal costs, amounting to $175,000. His previously made security deposit of $150,000 has been confiscated, and he is liable to pay a further $25,000 related to motion-associated expenses.

FSD Pharma Delves into Alcohol Metabolism:

In a separate development, FSD Pharma inked an agreement with Celly Nutrition Corp., revealing its strategy to allocate a segment of its Celly Nu stakes to its shareholders.

Celly Nu, a nascent firm currently not registering revenue, markets beverages that purportedly hasten alcohol metabolism, aiming to reduce breath alcohol concentrations. As per their website, the company aspires to utilize its intellectual assets to craft recreational and consumer products designed to mitigate the aftereffects of alcohol consumption.

According to the arrangement, FSD Pharma is set to propose that its Class A and Class B shareholders, including some warrant holders, become recipients of Celly Nu shares. This translates to a share of Celly Nu being allocated for every FSD Pharma share held. The projected distribution encompasses approximately 45.7 million Celly Nutrition shares, with FSD Pharma retaining a substantial 154.3 million shares.

FSD Pharma has announced that this distribution proposal will be the focal point of an imminent special meeting. Pending stakeholder approval, the deal will be finalized through a judicially endorsed plan.

In their statement, the company assured shareholders that their proportional stake in FSD Pharma remains intact post this distribution. Any adjustments required for other forms of FSD Pharma investments, including options and non-distribution warrants, will adhere to the terms of this transaction.