Anti-baldness company Cellmid loses court case against its former marketing agency
Anti-baldness stock Cellmid says it is disappointed with the outcome of a court case against its former marketing agency, which has forced the company to cough up nearly $1 million.
Cellmid (ASX:CDY) makes hair growth tonics as well as developing cancer and heart disease treatments. US department stores Neiman Marcus and Bloomingdales stock its hair products.
The court case, heard in the NSW Supreme Court, centred around Ikon Communications seeking payment from Cellmid for its services, according to Mumbrella.
Mumbrella also reported that Cellmid counter-sued, with its subsidiary Advangen accusing Ikon Communications of creating a 2015 marketing campaign that was a “complete flop” that generated no sales.
The court ruled Ikon was entitled to its claim of $939,055.65 plus interest, and that Advangen’s counter-claim be thrown out.
“Cellmid is disappointed with the court’s decision and maintains its position that Ikon failed to provide the services agreed in the contract which, in the board’s view, caused the failure of the campaign,” the company said in a statement.
“This dispute occurred in 2015 and Cellmid is at a vastly different stage of maturity. The conclusion of this matter will allow Cellmid to fully focus on its plans.”
The company says it had already budgeted for the unfavourable decision, and “made an allowance and noted it is a contingent liability in its 2018 financial accounts”.
Mumbrella quotes Ikon as saying: “As an agency we pride ourselves in forming mutually respectful relationships with our clients. We are pleased that this matter has been resolved appropriately. We will continue doing what we do best – producing best-in-class work for our clients.”
Cellmid shares fell slightly today, down 1pc to 33.5c.