MediPharm Labs Corp. (OTCQX:MEDIF) (TSX:LABS) (FSE: MLZ) a pharmaceutical company specialized in precision-based cannabinoids, has been awarded a favorable summary of judgment in the Ontario Court of Justice in connection with a supply agreement dispute in the amount of $9.8 million.
On January 24, 2020, MediPharm Labs filed a statement of claim in the Ontario Superior Court of Justice against one of its long-term customers of cannabis concentrates. The claim related to, among other things, the payment of outstanding amounts due to the company for products shipped to and received by the customer and deposits owed to the company for committed amounts not yet shipped.
On February 26, 2020, the defendant in the claim filed a statement of defense and counterclaim. The Ontario Court of Justice has dismissed this counterclaim.
This summary judgment and subsequent payment, and recent conditional sale of the company's Australian facility, will add over $16 million in cash, strengthening the balance sheet.
David Pidduck, CEO of MediPharm Labs stated, "In the early days of the nascent cannabis industry many companies faced risks in collecting large receivables. This summary judgment will allow us to collect this $9.8 million, which will dramatically strengthen our balance sheet. MediPharm now has many customers across multiple channels and our accounts receivable are healthy. The collection of this cash will significantly improve MediPharm's cash position and give us flexibility to consider M&A opportunities."
Photo: Benzinga; Sources: courtesy of AJEL, lindsayfox via Pixabay
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