Item 8.01
Other Events.
Stipulation
of Settlement Agreement - Merritts
As
previously reported in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, on October 16, 2015,
solely to avoid the costs, risks, and uncertainties inherent in litigation, Notis Global, Inc. (p/k/a Medbox, Inc.) (the “Company”)
and the individual defendants entered into a Stipulation and Agreement of Settlement (the “Stipulation”) in the following
previously disclosed stockholder derivative lawsuits: (1)
Mike Jones v. Guy Marsala, et al.
, in the U.S. District
Court for Central District of California; (2)
Jennifer Scheffer v. P. Vincent Mehdizadeh, et al.
, in the Eighth Judicial
District Court of Nevada; (3)
Kimberly Y. Freeman v. Pejman Vincent Mehdizadeh, et al.
, in the Eighth Judicial District
Court of Nevada; (4)
Tyler Gray v. Pejman Vincent Mehdizadeh, et al.
, in the U.S. District Court for the District
of Nevada; (5)
Robert J. Calabrese v. Ned L. Siegel, et al.
, in the U.S. District Court for the District of Nevada;
(6)
Patricia des Groseilliers v. Pejman Vincent Mehdizadeh, et al.
, in the U.S. District Court for the District of
Nevada; (7)
Michael A. Glinter v. Pejman Vincent Mehdizadeh, et al.
, in the Superior Court of the State of California
for the County of Los Angeles (collectively, the “Derivative Actions”) brought against certain current and former
officers and directors (as previously disclosed). The settlement is dependent upon final approval by the United States District
Court for the Central District of California (the “Court”).
On
April 22, 2016, the Court issued an Order granting shareholder Richard Merritts’ (“Merritts”) Motion to
Intervene in the lawsuit titled
Mike Jones v. Guy Marsala, et al.
, in order to conduct limited discovery.
On
September 16, 2016, solely to avoid the costs, risks, and uncertainties inherent in litigation, the parties entered into a settlement
regarding Merritts’ claims. The settlement provides, among other things, for the release and dismissal of all asserted claims.
Under
the terms of the settlement, the Company agrees to adopt and to adhere to certain corporate governance processes in the
future. In addition to these corporate governance measures, the Company will make a payment of $135,000 in cash to be used to
pay Merritts’ counsel for any attorneys’ fees and expenses, or as service awards to plaintiff Merritts, that are
approved and awarded by the Court.
The
settlement is contingent on final court approval. As a result of amounts already reflected in the Company’s financial statements,
and the coverage by the Company’s insurance carrier, the final terms of the settlements are not expected to have a material
adverse effect on the Company’s financial position or results of operations.
On
September 26, 2016, the Court issued an Order scheduling a hearing on the final approval of settlement on October 17, 2016 at
1:30p.m. All objections of Company shareholders to the settlement shall be filed on or before October 7, 2016.
The
disclosure set forth herein provides notice to Company shareholders of the settlement and the foregoing information.
The
Company will publish this disclosure through a link to this current report on Form 8-K on the Company’s website (www.notisglobal.com)
on the page titled “Investors.”
Notice
of Change of Date for Final Fairness Hearing for the Class Action
As
previously reported in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, on December 1, 2015,
Notis Global and the class plaintiffs in
Josh Crystal v. Medbox, Inc., et al.
, Case No. 2:15-CV-00426-BRO (JEMx),
pending before the United States District Court for the Central District of California (the “Court”) notified the
Court of a settlement. The Court stayed the action pending the Court’s review of the settlement and directed the parties
to file a stipulation of settlement. On December 18, 2015, plaintiffs filed the Motion for Preliminary Approval of Class
Action Settlement that included the stipulation of settlement. On February 3, 2016, the Court issued an Order granting preliminary
approval of the settlement. The settlement provides for notice to be
given
to the class, a period for opt outs and a final approval hearing. The Court had scheduled the Final Settlement Approval Hearing
to be held on May 16, 2016 at 1:30 p.m.
On
May 13, 2016, the Court issued an Order continuing the final fairness hearing to August 15, 2016, at 1:30 p.m.
On
August 3, 2016, the Court issued another Order continuing the final fairness hearing to September 22, 2016, at 1:30
p.m.
On
September 13, 2016, the Court issued another Order continuing the final fairness hearing to October 17, 2016 at 1:30 p.m.
The
disclosure set forth herein provides notice to potential objectors of the change to the hearing date.
The
Company will publish this disclosure through a link to this current report on Form 8-K on the Company’s website (www.notisglobal.com)
on the page titled “Investors.”
OTCBB
Notice
On
September 9
th
, the Company received notice from the OTC Markets Group, Inc. (“OTC Markets”) that OTC Markets
would move the Company’s listing from the OTCQB market to OTC Pink Sheets market, if the Company had not filed its Quarterly
Report on Form 10-Q for the period ended June 30, 2016 by September 30, 2016.