An Alberta court had to weigh in on a dispute regarding share price between a Canadian cannabis company and the company’s former Chief Operating Officer.

The case involved a dispute between Daniel Jean Laferriere, who was the COO of Simply Solventless Concentrates Ltd. (SSC) in 2020 and 2021, and the company itself. Laferriere argued that shares he sought to have redeemed at the end of 2023 were worth $0.20 a share, while the company argued they were worth $0.017 per share.

While the former valuation would have made Laferriere’s two million shares worth $400,000, the valuation offered by Simply Solventless would have made the shares worth $34,000. The judge in the case found the value of the SSC shares on December 5, 2023, was $0.05 per share, or $100,000 total. 

The dispute goes back to SCC’s attempts to take SCC stocks public in 2021 through another company, Dash Capital Corp. SCC shareholder approval of the deal was required, and Laferriere exercised his right at the time to disagree with the deal and have his own shares redeemed. SSC shares began trading in late December 2023.

Laferriere argued that his shares were worth $0.20 at the time he redeemed them because SCC shares were offered and purchased for $0.20 per share in the private placement with Dash Capital Corp. 

SCC’s representatives disagreed, arguing that the $0.20 per share private placement was based on a price for “units,” each of which included a share as well as a warrant. This warrant allowed its holder to purchase another share at the same price at a later date. SCC argued the fair value of a share was from $0.02 to $0.05, while the warrant’s value was $0.15 to $0.17 each. This made the average share price $0.035 per share, which is what the SSC offered to the former COO.

The judge disagreed with both parties’ arguments. He noted that the $0.20 per share valuation claimed by the former COO would mean that the attached warrants had no value, while saying that SCC’s arguments placed its share price (alone, without the warrant) at $0.035 per share, just over 10% of the unit price. 

The court rejected both of these valuations, instead ruling that the value of the SSC shares on December 5, 2023 was $0.05 per share. 

Court documents also show some of the reasons behind SCC’s “hail Mary” attempt to stay afloat after finding themselves with “significant and long overdue” accounts payable, which included outstanding legal fees of over $500,000 and a tax debt of approximately $1.5 million.

Since that time, the company has seen a considerable turnaround. For the twelve months ended December 31, 2023, SCC generated net income of just over $1 million, up from a nearly $1.7 million loss in the previous year.  In the first two quarters of its most recent fiscal year, the company has reported $502,536, and $1,220,798 net and comprehensive income. In September, they announced a plan to buy Alberta cannabis producer ANC for $10 million.

SCC’s stock (HASH.V) closed at 0.64 on October 30.

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