Quantum BioPharma wins legal battle against former CEO

TORONTO - Quantum BioPharma Ltd. (NASDAQ: QNTM), a biopharmaceutical company with a market capitalization of $18.54 million, has achieved a legal victory as the Court of Appeal for Ontario dismissed a reconsideration motion filed by Dr. Raza Bokhari, the former CEO of FSD Pharma Inc., which is now Quantum BioPharma. The dismissal of the motion upholds previous legal decisions favoring Quantum BioPharma in the dispute over Dr. Bokhari’s termination for cause in July 2021. According to InvestingPro data, the company maintains a strong balance sheet with more cash than debt, though it remains unprofitable over the last twelve months.

This legal outcome follows a series of arbitrations and court proceedings detailed in the company’s news releases, with Arbitrator Cunningham rejecting Dr. Bokhari’s wrongful dismissal claim and awarding FSD Pharma approximately CDN $2.81 million in arbitration costs plus interest. Additional costs awarded include $175,000 by Justice Conway and $5,000 by the Court of Appeal, totaling $180,000 in respect of Dr. Bokhari’s unsuccessful appeal efforts. The stock has shown remarkable resilience, posting an 88.59% return year-to-date, despite broader market challenges. InvestingPro subscribers can access 6 additional key insights about QNTM’s financial health and market performance.

Quantum BioPharma has initiated the process to collect the awarded monies by filing a Petition to Confirm Arbitration Award in the United States District Court for the Eastern District of Pennsylvania. The court granted an Order and entered Judgment in favor of Quantum BioPharma against Dr. Bokhari, which includes various amounts in USD and CAD, each accruing interest per day until the Judgment is satisfied.

Dr. Bokhari had appealed this Order and Judgment and was granted a stay, providing a supersedeas bond for USD $2,882,441.48. The judgment by the United States Court of Appeals is pending.

Quantum BioPharma is known for its focus on developing treatments for neurodegenerative and metabolic disorders, as well as alcohol misuse disorders. Its lead compound, Lucid-MS, is a patented new chemical entity aimed at preventing and reversing myelin degradation, associated with multiple sclerosis, in preclinical models.

The company also maintains a strategic portfolio through its subsidiary FSD Strategic Investments Inc. and retains a 25.71% ownership of Celly Nutrition as of June 30, 2024, along with royalty agreements related to the sales of UNBUZZD™, an over-the-counter product. Trading at $6.94, analysis from InvestingPro suggests the stock may be slightly undervalued, presenting potential opportunities for investors seeking exposure to the biotech sector.

The information in this article is based on a press release statement from Quantum BioPharma and provides a factual account of the company’s recent legal developments without speculation or endorsement of claims.

In other recent news, Quantum BioPharma Ltd. has completed a $5 million funding round, with the capital earmarked for research and development, commercialization, and general operations. The company also reported progress in its product pipeline, including a completed clinical trial for the dietary supplement unbuzzd, which showed promise in accelerating alcohol metabolism. Additionally, Quantum BioPharma has advanced its Multiple Sclerosis drug, Lucid-21-302, through a successful Phase 1 trial with no serious adverse events, paving the way for further trials.

Quantum BioPharma’s financial results for the year ending December 31, 2024, indicate a strengthened balance sheet with a reduction in net loss by 18% and cash reserves totaling $12.1 million USD. The company has diversified its assets by purchasing $3.5 million worth of cryptocurrencies. In a strategic move, Quantum BioPharma has announced a partnership between its licensee, Celly Nutrition, and the Asian American Trade Associations Council to expand the retail reach of unbuzzd across the United States and Puerto Rico.

Further expanding its reach, Celly Nutrition is launching unbuzzd in Puerto Rico through a partnership with FUSION Distribution Group, making the product available in various retail venues. In corporate developments, Quantum BioPharma has appointed Terry Lynch to its board of directors, succeeding Dr. Sanjiv Chopra. Lynch’s expertise in fundraising and biotech investments is expected to benefit the company. Quantum BioPharma retains a 25.71% ownership stake in Celly Nutrition and is entitled to royalty payments from unbuzzd sales.

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