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iAnthus settles long-standing legal dispute over MPX deal

iAnthus Capital Holdings (CSE: IAN) (OTCQB: ITHUF) has agreed to settle a five-year-old legal dispute over its acquisition of MPX Bioceutical Corp. the company announced on Wednesday.

According to a statement, the New York-based multistate operator will issue 5 million common shares at C$0.01 per share to Ninth Square Capital Corporation, which alleges oppressive behavior in the 2019 MPX deal. The settlement does not involve an admission of wrongdoing.

The solution comes at a time when iAnthus is struggling with declining revenue and increasing litigation. The New York-based company reported a 6.3% decline in third-quarter revenue to $40.3 million, according to financial results released last month. The company has a working capital deficit of $31.4 million and an accumulated deficit of $1.3 billion.

The settlement helps resolve litigation for iAnthus, which still faces other legal challenges, including a RICO lawsuit filed in June by Maryland pharmacy LMS Wellness. That lawsuit accuses iAnthus of diverting at least $4.5 million from LMS to prop up struggling subsidiaries, accusing the company of funneling money into three Maryland companies – Greenmart of Maryland LLC, Budding Rose Inc. and Rosebud Organics Inc.

The company brought in former Curaleaf executive Richard Proud as CEO in July last year to help turn around operations. Proud replaced interim chief Robert Galvin, who continued as chief operating officer.

iAnthus shares will be issued subject to exemptions from Canadian securities laws and the registration requirements of the U.S. Securities Act, the company said. The shares are issued as “restricted securities”. Ninth Square filed its first statement of claim in August 2019.

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