Australis Capital Sees Green Therapeutics, Meridian File Lawsuit For Breach of Contract

It’s been a rough week for Australis Capital (CSE: AUSA). Following the public grievance issued last Friday by shareholder Roger Sykes condemning the related-party transaction of Passport, the company now appears to be in further hot water in relation to its current direction. Last night, Green Therapeutics LLC along with Meridian Companies LLC announced that they have commenced legal action against the investment firm.

The lawsuit, filed on April 8, 2020, is over various breach of contract claims against Australis and three of its subsidiaries in connection with a purchase arrangement announced on May 21, 2019. Green Therapeutics and Meridian claim that the sale of their assets to the issuer was predicated upon Australis building out a cultivation and manufacturing facility using the acquired assets, as described within the original press release.

Australis at the time had acquired certain assets of Green Therapeutics and Meridian, which includes certain licenses, brands, and 8.9 acres of land in Nevada, via the issuance of 11,413,376 common shares as well as via several promises and other rights being made.

That plan, which the asset sale was predicated on, is now claimed to have changed with Australis now announcing that it intends to transfer or sell the property and use the proceeds to purchase Passport Technology in a related party transaction. Further, Australis has elected to change its business from being focused on cannabis-related operations to that of merchant services such as ATM’s and payment systems.

As a result of this breach of contract, Green Therapeutics and Meridian are collectively looking to obtain damages, injunctive relief, and recission of the original contracts as a result. If granted, the rescission would put Australis in a difficult spot, given that the proposed related party transaction is to be paid for largely via the transfer or sale of these assets.

Australis Capital last traded at $0.22 on the CSE.

Information for this briefing was found via Sedar, Green Therapeutics, and Australis Capital Inc. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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