Emer­ald Health’s Huang set­tles stock op­tion law­suit

Emer­ald Health Ther­a­peu­tics Inc.’s pres­i­dent, Bin Huang, has set­tled a law­suit over a stock op­tion. A pri­vate com­pany claimed that it was sup­posed to re­ceive an op­tion for 830,000 shares.

Stockwatch Daily - - FRONT PAGE - By Mike Caswell

EMER­ALD HEALTH Ther­a­peu­tics Inc.’s pres­i­dent, Bin Huang, has reached an out-of-cour t deal to set­tle a law­suit she faced in the Supreme Court of Bri­tish Columbia over a stock op­tion. A pri­vately held en­tity had claimed that it was en­ti­tled to an op­tion for 830,000 shares as part of a finder’s fee ar­range­ment. The op­tion was sup­pos­edly ex­er­cis­able at 10 cents, which would have made it of some value.

The end of the law­suit is con­tained in a con­sent order filed at the Van­cou­ver court­house on Oct. 26, 2017. The order sim­ply states that the suit is dis­missed with each side to bear its own le­gal costs. Lawyers for both sides signed the doc­u­ment.

The order brings a quiet end to a case that be­gan al­most a year ago. On Nov. 30, 2016, pri­vately held Jescorp Cap­i­tal Inc. filed a no­tice of claim against Ms. Huang. Ac­cord­ing to the suit, Jescorp acted as a finder in a May, 2015, trans­ac­tion be­tween Emer­ald Health and a com­pany called Medna Bio­sciences Inc. (The suit had no de­tails of the trans­ac­tion, but that month Medna ac­quired 20.15 mil­lion shares of an Em er­ald pre­de­ces­sor.)

For its role in the deal, Jescorp was to re­ceive an op­tion for 830,000 shares at 10 cents, the suit claimed. (Based on Emer­ald Health’s clos­ing price of $2.26 on Mon­day, that many shares would be worth $1.87-mil­lion.) The prob­lem, ac­cord­ing to the suit, was that Jescorp was un­able to ex­er­cise the op­tion. Jescorp said that it gave no­tice of the ex­er­cise on Sept. 27, 2016, but it re­ceived no re­sponse. About a week later, Jescorp’s lawyer wrote a let­ter de­mand­ing a re­ply, with that query go­ing unan­swered as well, ac­cord­ing to the suit. Within weeks, it filed the law­suit.

In ad­di­tion to Ms. Huang, the law­suit named as a de­fen­dant a Vic­to­ria res­i­dent named Re­nee Gagnon. The rea­son that Ms. Gagnon was a de­fen­dant was that the op­tion in ques­tion orig­i­nally be­longed to her. She had as­signed it to Ms. Huang on Jan. 16, 2015, but ap­par­ently the op­tion re­mained in Ms. Gagnon’s name. The order dis­miss­ing the suit ap­plies to Ms. Gagnon as well.

For her part, Ms. Gagnon de­nied any wrong­do­ing. In a re­sponse filed on Feb. 23, 2017, she said that the agree­ment to as­sign the op­tion to Jescorp sim­ply did not ex­ist. Al­ter­na­tively, if Ms. Huang did as­sign the op­tion to Jescorp, she did so with­out telling Ms. Gagnon, ac­cord­ing to the re­sponse. Ms. Gagnon asked that the suit be dis­missed.

Ms. Huang did not file a re­sponse to the suit. Emer­ald Health was not a de­fen­dant in the case. (There was never an

ex­pla­na­tion in court fil­ings as to why Ms. Huang was pay­ing a finder’s fee on the com­pany’s be­half us­ing an op­tion in Ms. Gagnon’s name.)

Van­cou­ver lawyer Ro­han Hill of McMil­lan LLP filed the law­suit on Jescorp’s be­half. Gerry Cut­tler of Cut­tler & Com­pany rep­re­sented Ms. Gagnon while Patrick Sul­li­van rep­re­sented Ms. Huang. Cor­po­rate records list Jescorp’s sole of­fi­cer and di­rec­tor as North Van­cou­ver res­i­dent Michael W. Wil­son.

Av­tar S Dhillon, Pu­nit S Dhillon, James Les­lie Hep­pell, David John Raffa, Chris W Wag­ner

(EMH) Shares: 93,484,141

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