FSD Pharma Announces Filing of Criminal Complaint Against Former Chief Financial Officer

Rhea-AI Summary

FSD Pharma Inc. (Nasdaq:HUGE) has filed a criminal complaint against former CFO Donal Carroll, alleging interference with the company's banking during a proxy contest. The complaint accuses Carroll of committing fraud and breach of trust. The company suspects that both Carroll and dissident shareholder Anthony Durkacz aimed to disrupt its clinical trials and shareholder meetings. FSD Pharma continues to assess responses to these allegations while focusing on advancing its research and development efforts in the pharmaceutical sector.

Positive

• Company continues Phase 2 clinical trial for FSD201 to treat COVID-19, with 352 patients expected to participate.
• The lead compound, ultramicro PEA, is designed to manage inflammation in severe COVID-19 cases.

Negative

• Allegations of fraudulent activities could undermine investor confidence.
• Interference with banking relationships may disrupt ongoing clinical trials and R&D efforts.

FSD Pharma Inc. (Nasdaq:HUGE) (CSE:HUGE) (the "Company" or "FSD Pharma") announced today that it has filed a criminal complaint with Toronto Police Services, Financial Crimes Unit, against Mr. Donal Carroll, the Company's former chief financial officer. The complaint asserts that Mr. Carroll has intentionally interfered with the Company's banking in order to disrupt FSD’s business in the midst of an ongoing proxy contest, in alleged contravention of criminal law and Mr. Carroll's fiduciary and other duties to the Company.

The company has grounds to believe that Mr. Carroll through his conduct has committed the criminal offence of fraud (Criminal code, s. 380) as well as the criminal offence of breach of trust (Criminal Code, s. 336).

The Company knows on good authority that Mr. Anthony Durkacz, dissident Director/shareholder made un-authorized contact(s) with an intent to interfere with the company’s banking relationships.

The company suspects that Mr. Carroll and Mr. Durkacz aim was to disrupt Company's clinical trials and R&D efforts, its annual and special meeting of shareholders scheduled for May 14, 2021, and other ongoing Company business.

The Company is assessing all avenues available to it, both to address such alleged wrongdoing.

About FSD Pharma

FSD Pharma Inc. (www.fsdpharma.com) is a publicly-traded holding company.

FSD BioSciences, Inc., a wholly-owned subsidiary, is a specialty biotech pharmaceutical R&D company focused on developing over time multiple applications of its lead compound, ultramicro PEA by down-regulating the cytokines to effectuate an anti-inflammatory response.

The Company filed an IND with the FDA on August 28, 2020 and was approved on September 25, 2020 to initiate a phase 2 clinical trial for the use of FSD201 to treat COVID-19, the disease caused by the SARS-CoV-2 virus. The trial is currently underway and is expected to randomize 352 patients in a controlled, double-blind multicenter study.

Severe COVID-19 is characterized by an over-exuberant inflammatory response that may lead to a cytokine storm and ultimately death. The Company is focused on developing ultra-micro PEA for its anti-inflammatory properties to avoid the cytokine storm associated with acute lung injury in hospitalized COVID-19 patients.

The Company is not making any express or implied claim that its product has the ability to eliminate, cure or contain the COVID-19 (or SARS-2 Coronavirus) infection at this time.

Forward-Looking Statements

Neither the Canadian Securities Exchange nor its regulation services provider accept responsibility for the adequacy or accuracy of this release.

The Company's subject area experts continue to review the scientific evidence/claims/research relevant to the application of PEA and ultramicronized-PEA. The company is not making any express or implied claims that its product has the ability to eliminate, cure or contain the COVID-19 (or SARS-2 Coronavirus) at this time.

The Phase 2 clinical trial program is subject to a favorable toxicology study and successful completion of ongoing laboratory studies, access to additional financing and review by the FDA of our IND application. The duration and cost of clinical trials can vary significantly depending on multiple factors, including the enrollment rate of patients, country in which trials are conducted, and specific trial protocols required. The process of developing pharmaceutical products and receiving the necessary regulatory approvals for commercialization typically takes several years. Accordingly, no near-term revenues from product sales or services are expected from ou

FAQ

What allegations has FSD Pharma made against its former CFO?

FSD Pharma alleges that former CFO Donal Carroll interfered with the company's banking to disrupt its operations amid a proxy contest.

What is FSD Pharma's stock symbol?

FSD Pharma is traded under the stock symbol 'HUGE'.

How many patients are involved in FSD Pharma's Phase 2 clinical trial for COVID-19?

The Phase 2 clinical trial for FSD201 aims to enroll 352 patients.

What are the potential risks of the allegations against FSD Pharma's former CFO?

The allegations could negatively affect investor confidence and disrupt the company's clinical trials and R&D activities.