Braxia Scientific Corp. announced that it has reached an agreement in principle (the “US Settlement”) to settle claims alleged in a securities class action (“US Class Action”) pending against the Company and certain of its former officers filed in the United States District Court for the Central District of California in April, 2021. The Company also announced it has signed a settlement agreement (the “Canadian Settlement”) to resolve a class action lawsuit (“Canadian Class Action”) that was filed in the British Columbia Supreme Court in May 2021 against the Company its CEO, certain of its former officers, a shareholder, and underwriters.
The US Settlement contemplates a cash payment by the Company of USD $1 million to settle the US Class Action. The Canadian Settlement contemplates a cash payment of CDN $1.9 million, of which the Company will be paying CDN $1.6 million.
After available insurance, the total cost to the Company to settle both class actions will be approximately CDN $1.36 million. This does not include legal expenses incurred by the Company, estimated at approximately CDN $950,000, of which approximately CDN $750,000 has been paid.
Both the US Settlement and the Canadian Settlement are subject to court approval at hearings expected later in 2022. Under the respective settlement agreement, once the US Settlement and the Canadian Settlement receive court approval, both class actions will be dismissed against all defendants, including the Company and its officers. Approval by the respective courts, notice to the putative classes, and the satisfaction of customary conditions to effectiveness will take several months.
As previously disclosed, given the uncertainties of litigation, the Company had not been in a position to assess the likelihood of any potential loss or adverse effect on its financial condition or to reasonably estimate the amount of potential loss in connection with the class actions. As a result of the entry into the US Settlement and the Canadian Settlement, the Company expects that the above-referenced total cost to settle will be incorporated into its results of operations and financial condition for the fiscal quarter ending June 30, 2022.
The Company announces that David Greenberg has resigned as a director. The Company appreciates David’s meaningful contribution to the Company and wishes him well in future endeavours.
Braxia Scientific is a medical research company with clinics that provide innovative ketamine treatments for persons with depression and related disorders. Through its medical solutions, Braxia aims to reduce the illness burden of brain-based disorders, such as major depressive disorder among others. Braxia is primarily focused on (i) owning and operating multidisciplinary clinics, providing treatment for mental health disorders, and (ii) research activities related to discovering and commercializing novel drugs and delivery methods. Braxia seeks to develop ketamine and derivatives and other psychedelic products from its IP development platform. Through its wholly owned subsidiary, the Canadian Rapid Treatment Center of Excellence Inc., Braxia currently operates multidisciplinary community-based clinics offering rapid-acting treatments for depression located in Mississauga, Toronto, Ottawa, and Montreal.
ON BEHALF OF THE BOARD
“Dr. Roger S. McIntyre“
Dr. Roger S. McIntyre
Chairman & CEO