LAVAL, QC, March 25, 2019 /CNW Telbec/ - Neptune
Wellness Solutions Inc. ("Neptune" or the "Corporation")
(NASDAQ: NEPT) (TSX: NEPT),
announced that it has received a judgment from the Superior Court
of Québec (the "Court") regarding certain previously disclosed
claims made by the Corporation's former chief executive officer
(the "Former CEO") against the Corporation in respect of certain
royalty payments alleged to be owed and owing to the Former CEO
pursuant to the terms of an agreement entered into on February 23, 2001 between Neptune and a
corporation controlled by the Former CEO (the "Agreement"). The
Corporation had also filed a counterclaim against the Former CEO
disputing the validity and interpretation of certain clauses
contained in the Agreement and claiming the repayment of certain
amounts previously paid to the Former CEO pursuant to the terms of
the Agreement. Under the terms of the Agreement, it was alleged by
the Former CEO that annual royalties be payable to the Former CEO,
with no limit to its duration, of 1% of the sales and other
revenues made by Neptune; the interpretation of which was
challenged by the Corporation.
Pursuant to the judgment rendered, which Neptune intends to
appeal, the Court ruled in favour of the Former CEO and rejected
the counterclaim filed by the Corporation. As a result, the Court
awarded the Former CEO payments determined by the Court to be owed
under the Agreement of 1% of all sales and revenues of the
Corporation incurred since March 1,
2014, which payments remain to be finally determined taking
into account interest, judicial cost and other expenses. The Court
also declared that, pursuant to the terms of the Agreement, the
royalty payments of 1% of the sales and other revenue made by the
Corporation on a consolidated basis are to be payable by the
Corporation to the Former CEO biannually, but only to the extent
that the disbursement of the royalty would not cause the
Corporation to have a negative earnings before interest, taxes and
amortization (in which case, the payments would be deferred to the
following fiscal period).
Since the claims were first initiated by the Former CEO, Neptune
has vigorously defended against such claims and appointed an
external law firm to assist and represent the Corporation in
asserting its rights. The Corporation has 30 days from the date of
the judgment to appeal against the decision and intends to file
such appeal prior to the expiry of such limitation period, after
carefully reviewing the decision in conjunction with its legal
advisors. The Corporation will continue to take all measures
required to assert its rights as it disagrees with the conclusions
rendered by the Court and the interpretation of the relevant
provisions of the Agreement. In the event an appeal is filed in a
timely manner, execution of the aforementioned judgment is expected
to be suspended during the appeal proceedings.
About Neptune Wellness Solutions Inc.
Neptune Wellness Solutions specializes in the extraction,
purification and formulation of health and wellness products.
Bringing decades of experience in the natural products sector to
the legal cannabis industry, Neptune is licensed by Health Canada
to process cannabis for the production of cannabis extracts and
oils at its 50,000 square foot facility located in Sherbrooke, Quebec. Leveraging its scientific
and technological expertise, Neptune acts as a service provider to
license holders as part of a multi-phase growth strategy focused on
the development of value-added and differentiated products for the
Canadian and global cannabis markets. Neptune's activities also
include the formulation, development and commercialization of
turnkey nutrition solutions and patented ingredients such as
MaxSimil®, and of a variety of marine and seed oils. Its head
office is located in Laval,
Quebec.
Forward-Looking Information
This press release may contain forward-looking information that
is based on certain assumptions and involves known and unknown
risks and uncertainties and other factors that could cause actual
events to differ materially from current assumptions and
expectations. These statements should not be read as guarantees of
future performance or results. Such statements involve known and
unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements to be materially
different from those implied by such statements. A more complete
discussion of the risks and uncertainties facing the Corporation
appears in the Corporation's Annual Information Form and continuous
disclosure filings, which are available on SEDAR's website at
www.sedar.com. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
of this press release. The Corporation disclaims any intention or
obligation, except to the extent required by law, to update or
revise any forward-looking statements as a result of new
information or future events, or for any other reason.
Neither the Toronto Stock Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
Toronto Stock Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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SOURCE Neptune Wellness Solutions Inc.