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Sunniva faces another lawsuit related to NHS sale


February 25, 2020
By Grow Opportunity staff

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Sunniva Inc. faces yet another lawsuit related to its Canadian subsidiary, Natural Health Services Ltd. (NHS).

A company press release, which was published late evening on Feb. 24, has stated its intention to defend against a lawsuit filed by Cura-Can Health Corp. Cura-Can, which purchased NHS last December, is looking to claim damages from alleged misrepresentations made by the company in the share purchase agreement during ongoing investigations to a disclosed privacy breach of NHS. The lawsuit is filed in the Court of Queen’s Bench of Alberta on Feb. 20.

Cura-Can’s lawsuit is the second legal action the company faces in relation to the sale of NHS. In January, IMK Management Systems Inc. sued Sunniva claiming that the company owed IMK $472,500 in finders fees for the sale of NHS to Cura-Can.

Last March, news broke that the personal health information of about 34,000 medical marijuana patients was accessed in a data breach of NHS’s electronic medical record system. NHS claims the breach involve any financial, credit card or social insurance number information since those aren’t collected from patients. However, Toronto personal injury firm Diamond & Diamond announced a proposed class-action lawsuit against NHS and Sunniva, alleging that the breach involved diagnostic results, healthcare numbers and personal contact information.

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A day after the lawsuit was filed in September, Sunniva announced a new sale agreement to The Clinic Network Canada, Inc. (TCNC) for $9 million. According to a statement on Sept. 10, the purchase price will be paid $4.5 million in cash and CA$4.5 in preferred shares of TCNC. Last minute revisions were made to the purchase agreement in December, shifting the sale to TCNC’s parent company, Cura-Can. The purchase agreement was closed on Dec. 18, 2019. Sunniva received $250,000 in the form of cash and $8.75 million in the form of 7 million common shares in private equity.