FTH's and Fluent's response to lawsuit filed by CIGN. And Countersuit claims.
FTH and Fluent's response to CIGN claims
They deny everything.
In 4th defense they claim CIGN is barred by the doctrine of unclean hands. They claim the facility was contaminated and found all cbd and thc plants to contain such high amounts of toxic heavy metals such as arsenic amd chromium that they were not saleable. They had no salvage value and had to be destroyed. They claim CIGN had knowledge of this and failed to disclose or conceal from them.
They repeat this claim over and over for each defense.
8th defense states CIGN breached the contract as CIGN provided all labor and related items to produce sellable thc and biomass, thc plants of a minimum of 2 oz per plant, dried cbd moisture content 14% dry weight and dried cbd products content of at least 8%.
They claim the CIGN Real Estate agreement not valid because it says the Lease says the tenant cant do business and it would be a default if business os Federally illegal.
Then they make a counter complaint and sue CIGN, CIGN Real Estate, TNT Real Property and Michael Feldenkrais. TNT holds the mortgage on the property.
FTH is under contract with Fluent to provide labor and materials for the cultivation of medical marijuana in Florida.
Claims MF knew of testing positive for heavy metals.
They paid CIGN 30k security deposit amd began making 10k a month rent payments, advanced funds for capital expenditures to bring premises into compliance with Department of Health requirements and paid utility bills.
FTH advanced funds of 300k for an initial purchase order prior to receiving products to which the payments applied and began advancing an operating draw of $72,500/month which was to be paid back by reducing payments for products beginning in month 7 of the contract term by 25k per month until repaid.
As a result the 1st crop was a tital failure and had to be destroyed.
Further attempts to process the crop before learning of its contamination damaged FTH's processing equipment causing financial loss.
Their other big claim is that CIGN could not lease them the space due to Marijuana being federally illegal per their loan documents with TNT.
Exhibit 1 - Loan Docs
Exhibit 2 - Subordination, Non Disturbance and Attornment Agreement
Exhibit 3 - Financing Statement
Exhibit 4 - Fluent Servicing doc dated Jan 5, 2022
Section 1.2 of agreement states that the facility os to produce, within 30 days following approval of the facility by DOH an initial harvest of 8,571 cbd plants as well as bi weekly cbd biomass.
The facility was approved by DOH on August 19, 2021. Minimum output has not been produced and they are terminating the agreement effective immediately under Sections 9 and 10. They agreed to paying the rent for 6 more months to allow landlord to remedy the issues with the property. If the property is remediated to the satisfaction of Fluent they will reach out to CIGN to enter into a new contract.
They look forward to continuing to work with Advisor on other existing and future endeavors.
Robert Beasley CEO FTH
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