Akers Biosciences, Inc. (the “Company”) (NASDAQ: AKER), a developer
of rapid health information technologies, today announced that it
reached a settlement agreement to settle two shareholder derivative
actions: Watts v. Gormally, et al., No. 2:18-15992 (D.N.J.) and
Chan v. Gormally, et al., No. 2:19-cv-4989 (D.N.J.). As previously
reported, on October 2, 2019, the plaintiffs filed a motion for
preliminary approval of the settlement. On January 8, 2020, the
court entered an order that, among other things, granted
preliminary approval of the settlement, approved the form and
content of the parties' proposed notice of the settlement, directed
the Company to issue a press release containing the information in
that notice by today, and scheduled a hearing on May 28, 2020 to
consider final approval of the settlement. Accordingly, below are
the contents of the court-approved notice of the proposed
settlement.
About Akers Biosciences Inc.
Akers Biosciences, Inc. develops, manufactures,
and supplies rapid, point of care screening and testing products
designed to bring health related information directly to the
patient or clinician in a timely and cost-efficient manner.
Forward-Looking Statements
Statements in this press release relating to
plans, strategies, trends, specific activities or investments, and
other statements that are not descriptions of historical facts and
may be forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking
information is inherently subject to risks and uncertainties, and
actual results could differ materially from those currently
anticipated due to a number of factors, which include the need for
additional financing, and any risks detailed from time to time in
Akers' reports filed with the Securities and Exchange Commission,
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and
Current Reports on Form 8-K. Forward-looking statements may be
identified by terms such as "may," "will," "expects," "plans,"
"intends," "estimates," "potential," or "continue," or similar
terms or the negative of these terms. Although the Company believes
the expectations reflected in the forward-looking statements are
reasonable, they cannot guarantee that future results, levels of
activity, performance or achievements will be obtained. The Company
does not have any obligation to update these forward-looking
statements other than as required by law.
Additional information on the company and its
products can be found at www.akersbio.com.
Contact:Investor
Relations: Hayden IR
Brett Mass, Managing Partner
Phone: (646)
536-7331
Email:
brett@haydenir.com www.haydenir.com
UNITED STATES DISTRICT
COURTDISTRICT OF NEW JERSEY
CALE WATTS, derivatively on behalf ofAKERS BIOSCIENCES, INC., |
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Case No.: 2:18-cv-15992 |
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Plaintiff, |
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EXHIBIT B |
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vs. |
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NOTICE OF
SETTLEMENT |
JOHN J. GORMALLY, GARY M. RAUCH,RAYMOND F. AKERS, JR., BILL
J.WHITE, RICHARD C. TARBOX III, andCHRISTOPHER C. SHREIBER, |
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TO CURRENT
AKERSSTOCKHOLDERS |
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Defendants, |
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and |
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AKERS BIOSCIENCES, INC., |
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Nominal Defendant. |
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NOTICE OF PROPOSED SETTLEMENT OF
DERIVATIVE ACTION
TO: |
ALL OWNERS OF AKERS BIOSCIENCES, INC. (“AKERS” OR THE
“COMPANY”) COMMON STOCK (TICKER SYMBOL: AKER) AS OF OCTOBER 1,
2019, WHO CONTINUE TO OWN SUCH SHARES (“CURRENT AKERS
STOCKHOLDERS”). |
PLEASE READ THIS NOTICE CAREFULLY AND IN ITS
ENTIRETY. THIS NOTICE RELATES TO A PROPOSED SETTLEMENT AND
DISMISSAL OF STOCKHOLDER DERIVATIVE LITIGATION AND CONTAINS
IMPORTANT INFORMATION REGARDING YOUR RIGHTS.
IF THE COURT APPROVES THE SETTLEMENT AND
DISMISSAL OF THE DERIVATIVE ACTIONS, STOCKHOLDERS OF AKERS WILL BE
FOREVER BARRED FROM CONTESTING THE APPROVAL OF THE PROPOSED
SETTLEMENT AND FROM PURSUING RELEASED CLAIMS.
THIS ACTION IS NOT A “CLASS ACTION.” THUS, THERE
IS NO COMMON FUND UPON WHICH YOU CAN MAKE A CLAIM FOR A MONETARY
PAYMENT.PLEASE TAKE NOTICE that this action is being settled on the
terms in an Amended Stipulation and Agreement of Settlement, dated
October 1, 2019 (the “Stipulation”). The purpose of this Notice is
to inform you of:
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the existence of the above-captioned derivative action (“Derivative
Action”) and a substantially similar related derivative action
captioned, Chan, et al. v. Gormally, et al., Case No. 2:19-cv-4989
(D.N.J.) (the “Chan Action”) (together, the “Derivative
Actions”), |
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the proposed settlement between the Plaintiffs1 and the Defendants
reached in the Derivative Actions (the “Settlement”), |
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the hearing to be held by the Court to consider the fairness,
reasonableness, and adequacy of the Settlement, |
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Plaintiffs’ Counsel’s application for fees and expenses, and |
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Plaintiffs’ Service Awards. |
This Notice describes what steps you may take in
relation to the Settlement. This Notice is not an expression of any
opinion by the Court about the truth or merits of Plaintiffs’
claims or the Defendants’ defenses. This Notice is solely to advise
you of the proposed Settlement of the Derivative Actions and of
your rights in connection with the proposed Settlement.
Summary
On October 1, 2019, Plaintiffs Cale Watts,
Tiffany Chan, Jasmine Henderson, and Don Danesh Wijesekera
(“Plaintiffs”), Akers, in its capacity as a nominal defendant, and
defendants John J. Gormally, Gary M. Rauch, Bill J. White, Richard
C. Tarbox III, Christopher C. Schreiber, Robert E. Andrews, Raza
Bokhari, and Joshua Silverman, Raymond F. Akers, Jr., Thomas Knox,
and Brandon Knox, current and/or former officers or members of
Akers’ Board of Directors, entered into the Stipulation in the
above-captioned action filed derivatively on behalf of Akers, in
the United States District Court for the District of New Jersey
(the “Court”) against the Individual Defendants.2 The Settlement,
as documented in the Stipulation, subject to the approval of the
Court, is intended by the Settling Parties to fully, finally, and
forever compromise, resolve, discharge, and settle the Released
Claims and to result in the dismissal of the Derivative Actions
with prejudice, upon the terms and subject to the conditions set
forth in the Stipulation. The proposed Settlement requires the
Company to adopt certain corporate governance measures and
procedures, as outlined in Exhibit A to the Stipulation, and
provides that the Akers Defendants shall cause their insurer to pay
a Fee and Expense Award to Plaintiffs’ Counsel of three hundred
twenty-five thousand dollars ($325,000.00) and Service Awards to
Plaintiffs of one thousand five hundred dollars ($1,500.00) each to
be paid from the Fee and Expense Award.
This notice is a summary only and does not
describe all of the details of the Stipulation. For full details of
the matters discussed in this summary, please see the full
Stipulation posted on the Company’s website,
http://www.akersbio.com/, contact counsel for Plaintiff Watts
(“Plaintiff’s Counsel”) at the address listed below, or inspect the
full Stipulation filed with the Clerk of the Court.
1All capitalized terms used in this notice,
unless otherwise defined herein, are defined as set forth in the
Stipulation.
2 Robert E. Andrews, Raza Bokhari, Joshua
Silverman, Thomas Knox, and Brandon Knox are named as defendants
only in the Chan Action.
What is the Lawsuit About?
The Derivative Actions are brought derivatively
on behalf of Akers and allege that the Individual Defendants
breached their fiduciary duties by making and/or causing Akers to
make false and misleading statements of material fact to the
investing public and failing to maintain internal controls at
Akers.
Why is there a Settlement?
The Court has not decided in favor of the
Defendants or the Plaintiffs. Instead, both sides agreed to the
Settlement to avoid the distraction, costs, and risks of further
litigation, and because the Settlement, including the corporate
governance reforms that the Company will adopt as part of the
Settlement, provides a substantial benefit to, and is in the best
interests of, Akers and its stockholders.
The Defendants deny each and every allegation of
wrongdoing or liability arising out of or relating in any way to
the events, conduct, statements, acts, or omissions alleged in the
Derivative Actions. The Defendants further assert that, at all
times, they acted in good faith, and in a manner they reasonably
believed to be and that was in the best interests of Akers and
Akers’ stockholders. The Defendants assert that they have
meritorious defenses to the claims in the Derivative Actions.
Nonetheless, the Defendants have entered into the Stipulation,
without admitting or conceding any fault, liability, wrongdoing, or
damage whatsoever, in order to avoid the risks inherent in any
lawsuit and the burden and expense of further litigation.
The Settlement Hearing and Your Right to Object
to the Settlement
On January 8, 2020, the Court entered an order
preliminarily approving the Stipulation and the Settlement
contemplated therein (the “Preliminary Approval Order”) and
providing for the notice of the Settlement to be made to Current
Akers stockholders. The Preliminary Approval Order further provides
that the Court will hold a hearing (the “Settlement Hearing”) on
May 28, 2020 at 11:30 am. before the Honorable Esther Salas, U.S.
District Court, District of New Jersey, Courtroom MLK 5A, located
at the Martin Luther King Building and United States Courthouse, 50
Walnut Street, Newark, New Jersey 07101, to among other things: (i)
determine whether the proposed Settlement is fair, reasonable and
adequate and in the best interests of the Company and its
stockholders; (ii) consider any objections to the Settlement
submitted in accordance with this Notice; (iii) determine whether a
judgment should be entered dismissing all claims in the Derivative
Action with prejudice, and releasing the Released Claims against
the Released Persons; (iv) consider the agreed-to Fee and Expense
Award to Plaintiffs’ Counsel of attorneys’ fees and the
reimbursement of expenses; (v) consider the Service Awards to
Plaintiffs, which shall be funded from the Fee and Expense Award;
and (vi) consider any other matters that may properly be brought
before the Court in connection with the Settlement.
Any Current Akers Stockholder who wishes to
object to the fairness, reasonableness, or adequacy of the
Settlement as set forth in the Stipulation, or to the proposed
award of attorneys’ fees and expenses, may file a with the Court a
written objection. An objector must at least fourteen (14) calendar
days prior to the Settlement Hearing: (1) file with the Clerk of
the Court and serve upon the below listed counsel a written
objection to the Settlement setting forth (a) the nature of the
objection; (b) proof of ownership of Akers common stock as of
October 1, 2019 and through the date of the Settlement Hearing,
including the number of shares of Akers common stock held and the
date of purchase; (c) any and all documentation or evidence in
support of such objection; and (d) the identities of any cases, by
name, court, and docket number, in which the stockholder or his,
her, or its attorney has objected to a settlement in the last three
years; and (2) if intending to appear and requesting to be heard at
the Settlement Hearing, he, she, or it must, in addition to the
requirements of (1) above, file with the Clerk of the Court and
serve on the below counsel (a) a written notice of his, her, or its
intention to appear at the Settlement Hearing; (b) a statement that
indicates the basis for such appearance; (c) the identities of any
witnesses he, she, or it intends to call at the Settlement Hearing
and a statement as to the subjects of their testimony; and (d) any
and all evidence that would be presented at the Settlement Hearing.
Any objector who does not timely file and serve a notice of
intention to appear in accordance with this paragraph shall be
foreclosed from raising any objection to the Settlement and shall
not be permitted to appear at the Settlement Hearing, except for
good cause shown.
IF YOU MAKE A WRITTEN OBJECTION, IT MUST BE ON
FILE WITH THE CLERK OF THE COURT NO LATER THAN May 14, 2020. The
Clerk’s address is:
Clerk of the CourtU.S. DISTRICT COURT, DISTRICT
OF NEW JERSEY Courtroom MLK 5A 50 Walnut Street Newark, NJ
07101
YOU ALSO MUST DELIVER COPIES OF THE MATERIALS TO
PLAINTIFF’S COUNSEL AND AKERS DEFENDANTS’ COUNSEL SO THEY ARE
RECEIVED NO LATER THAN May 14, 2020. Counsel’s addresses are:
Counsel for Plaintiff:Timothy
BrownTHE BROWN LAW FIRM, P.C.240 Townsend SquareOyster Bay, NY
11771
Counsel for the Akers
Defendants:Caryn SchechtmanDLA Piper LLP (US)1251 Avenue
of the Americas 27th FloorNew York, NY 10020
An objector may file an objection on his, her or
its own or through an attorney hired at his, her or its own
expense. If an objector hires an attorney to represent him, her or
it for the purposes of making such objection, the attorney must
serve a notice of appearance on the counsel listed above and file
such notice with the Court no later than fourteen (14) calendar
days before the Settlement Hearing. Any Akers stockholder who does
not timely file and serve a written objection complying with the
above terms shall be deemed to have waived, and shall be foreclosed
from raising, any objection to the Settlement, and any untimely
objection shall be barred.
Any objector who files and serves a timely,
written objection in accordance with the instructions above, may
appear at the Settlement Hearing either in person or through
counsel retained at the objector’s expense. Objectors need not
attend the Settlement Hearing, however, in order to have their
objections considered by the Court.
If you are a Current Akers Stockholder and do
not take steps to appear in this action and object to the proposed
Settlement, you will be bound by the Judgment of the Court and will
forever be barred from raising an objection to such settlement in
this or any other action or proceeding, and from pursuing any of
the Released Claims.
If you held Akers common stock as of October 1,
2019 and continue to hold such stock, you may have certain rights
in connection with the proposed Settlement. You may obtain further
information by contacting counsel for Plaintiff at: Timothy Brown,
The Brown Law Firm, P.C., 240 Townsend Square, Oyster Bay, NY
11771, Telephone: (516) 922-5427, Email:
tbrown@thebrownlawfirm.net. Please Do Not Call the Court or
Defendants with Questions About the Settlement.
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