Akers Biosciences, Inc. Settlement of Dispute with ChubeWorkx (6059H)
August 19 2016 - 1:00AM
UK Regulatory
TIDMAKR
RNS Number : 6059H
Akers Biosciences, Inc.
19 August 2016
19 August 2016
Akers Biosciences, Inc.
Settlement of Dispute with ChubeWorkx
Akers Biosciences, Inc. (NASDAQ: AKER) (AIM: AKR.L), (the
"Company" or "Akers Bio"), a developer of rapid health information
technologies, is pleased to announce that it has reached a final
global settlement and has executed a Settlement Agreement with
ChubeWorkx Guernsey Limited ("ChubeWorkx"), a former worldwide
exclusive distributor of the Company's BreathScan(R) products (and
also a significant shareholder of the Company), in respect of
various claims brought by Akers Bio against ChubeWorkx for
outstanding amounts due to Akers Bio under a promissory note in a
United States Federal Court suit, District of New Jersey and
various claims brought by ChubeWorkx against Akers Bio arising from
an exclusive licensing agreement between ChubeWorkx and Akers Bio
("Licensing Agreement") in a suit brought in The High Court of
Justice, Queen's Bench Division Commercial Court, Royal Courts of
Justice, United Kingdom.
As announced on March 23, 2015, on December 31, 2014 a
promissory note in the principal aggregate amount of $1.48 million
(the "Note") was issued by Chubeworkx to Akers Bio in exchange for
the Company's open trade receivables from ChubeWorkx. In May, 2015,
the Company announced that it had served notice of default on
ChubeWorkx in respect of monies outstanding on the Note amounting
to a principal aggregate amount of $1.25 million.
Under the terms of the Settlement Agreement, Akers Bio will
recover the full outstanding principal amount in the current fiscal
year in the form of $0.75 million worth of BreathScan(R) Alcohol
Detector stock to inventory - which the Company intends to
subsequently sell - and the balance of $0.5 million in cash. Akers
Bio established an allowance for this bad debt in the Company's
financial statements for the year ended December 31, 2015. As a
result of the Settlement Agreement, the Company will now recognize
the $1.25 million as a reduction of expense in the year ending
December 31, 2016.
In addition to addressing the promissory note described above,
the Settlement Agreement also allows Akers Bio to market and sell
all of the Company's breath technology tests worldwide,
unencumbered by any past/future claims by ChubeWorkx under the
Licensing Agreement (entered into with ChubeWorkx in 2012 and
subsequently amended in 2013). Under the terms of the Settlement
Agreement, Chubeworkx no longer holds any rights pertaining to
Akers Bio's BreathScan(R) technology, which serves as the basis for
a number of commercialized products including BreathScan(R) Alcohol
Detector and BreathScan OxiChek(TM); and a number of products in
development including tests for ketosis, ketoacidosis and tests for
indicators of major respiratory diseases.
In return for Akers Bio regaining the full rights to sell breath
technology products, under the terms of the Settlement Agreement,
ChubeWorkx is entitled to receive a royalty of 5% of the Company's
gross revenues (the "ChubeWorkx Royalty") until ChubeWorkx has
earned an aggregate $5 million, after which point ChubeWorkx will
no longer be entitled to receive any royalties from Akers Bio and
Akers Bio shall have no further obligation to ChubeWorkx. The
Company has pledged as security certain of the Company's assets
worthy to satisfy its obligations. The Settlement Agreement further
allows Akers Bio to retain 50% of the ChubeWorkx Royalty until the
full $0.5 million cash component of the monies owed by ChubeWorkx
to Akers Bio as described above has been satisfied.
John J. Gormally, CEO, of Akers Bio, commented: "The Company is
pleased with the outcome of the Settlement Agreement which ends a
long running dispute and allows Akers Bio to regain the full
worldwide rights to its BreathScan(R) technology, unencumbered by
any licensing claims. We believe this technology - particularly as
it is applied within our new range of breath tests for the health
and wellness industry - is very valuable to Akers Bio and as such
we believe the terms of the Settlement Agreement are beneficial for
our shareholders."
About Akers Biosciences, Inc.
Akers Bio develops, manufactures, and supplies rapid screening
and testing products designed to deliver quicker and more
cost-effective healthcare information to healthcare providers and
consumers. The Company has advanced the science of diagnostics
while responding to major shifts in healthcare through the
development of several proprietary platform technologies. The
Company's state-of-the-art rapid diagnostic assays can be performed
virtually anywhere in minutes when time is of the essence. The
Company has aligned with major healthcare companies and high volume
medical product distributors to maximize product offerings, and to
be a major worldwide competitor in diagnostics.
Additional information on the Company and its products can be
found at www.akersbio.com. Follow us on Twitter @AkersBio.
Cautionary Statement Regarding Forward Looking Statements
Statements contained herein that are not based upon current or
historical fact are forward-looking in nature and constitute
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Such forward-looking statements reflect the Company's
expectations about its future operating results, performance and
opportunities that involve substantial risks and uncertainties.
These statements include but are not limited to statements
regarding the intended terms of the offering, closing of the
offering and use of any proceeds from the offering. When used
herein, the words "anticipate," "believe," "estimate," "upcoming,"
"plan," "target", "intend" and "expect" and similar expressions, as
they relate to Akers Biosciences, Inc., its subsidiaries, or its
management, are intended to identify such forward-looking
statements. These forward-looking statements are based on
information currently available to the Company and are subject to a
number of risks, uncertainties, and other factors that could cause
the Company's actual results, performance, prospects, and
opportunities to differ materially from those expressed in, or
implied by, these forward-looking statements.
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
For more information:
Akers Biosciences, Inc.
Raymond F. Akers, Jr. PhD
Co-founder and Chief Scientific Director
Tel. +1 856 848 8698
Taglich Brothers, Inc. (Investor Relations)
Chris Schreiber
Tel. +1 917 445 6207
Email: cs@taglichbrothers.com
finnCap (UK Nominated Adviser and Broker)
Adrian Hargrave / Scott Mathieson (Corporate Finance)
Steve Norcross (Broking)
Tel. +44 (0)20 7220 0500
Vigo Communications (Global Public Relations)
Ben Simons / Fiona Henson
Tel. +44 (0)20 7830 9704
Email: akers@vigocomms.com
This information is provided by RNS
The company news service from the London Stock Exchange
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