19 Aug 2016 07:00
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® 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® 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® technology, which serves as the basis for a number of commercialized products including BreathScan® Alcohol Detector and BreathScan OxiChek™; 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® 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