Important Legal Notice to Current Holders of Pegasus Wireless Corporation Common Stock From Fazio | Micheletti LLP
SAN RAMON, Calif., March 19, 2012 /PRNewswire/
Fazio | Micheletti LLP has negotiated the settlement of a shareholder derivative action brought on behalf of former Fremont, California-based Pegasus Wireless Corporation ("Pegasus") against several former members of Pegasus's Board of Directors ("Defendants").
The case is Chen v. Jasper Knabb, et. al. (Alameda County Superior Court, Case No. RG 07310978).
Plaintiff Chen, a current Pegasus shareholder, alleges that in June 2006 Pegasus's former President and CEO, Jasper Knabb, agreed to purchase 1,250,000 shares of Pegasus stock for $8 per share. In September 2006, the price of Pegasus stock had plummeted to less than $1 a share, yet the Pegasus Board of Directors voted to approve the repurchase of 870,375 shares of the stock Knabb had purchased for the original price of $8 a share-roughly eight times the then-current purchase price-causing Pegasus to effectively give away several millions of dollars to Knabb. The Defendants who appeared in the action (the "Individual Defendants") dispute these allegations and deny any liability.
Summary of Proposed Settlement. Following extensive discovery, litigation, and mediation, the Individual Defendants and their insurer have agreed to (1) pay a total of $1,450,000 ("Settlement Fund"), which shall be used to compensate Pegasus, pay the attorney fees and expenses Plaintiff's counsel incurred as a result of prosecuting the case, and pay an incentive award to Plaintiff in amounts to be approved by the Court, and (2) to pay up to an additional $50,000 in notice/administration costs (with any costs in excess of $50,000 to be paid from the Settlement Fund).
In exchange, Pegasus's claims against all Defendants will be released and the action will be dismissed.
Because the lawsuit is a derivative action brought on behalf of Pegasus, and is not a class action brought on behalf of shareholders, no shareholder will be compensated directly by this settlement and, therefore, there is no claims procedure for shareholders.
The Settlement Agreement and a Detailed Notice of Proposed Settlement can be obtained from several sources, including http://www.PegasusSettlement.com or from Plaintiff's counsel (below). Those documents contain important additional legal information. PLEASE READ THEM.
You Have a Right to Object/Comment on the Settlement. Any current Pegasus shareholder who wishes to comment on or object to the proposed settlement has the right to file a comment/objection and appear at the Settlement Hearing, provided you comply with the procedures set forth in Section 8 of the Detailed Notice prior to 05-15-12, including filing your objection with the Court Clerk, Alameda County Superior Court, 1225 Fallon Street, Oakland, CA 94612 and serving a copy on all counsel listed below. Requirements also include the need to establish that you currently own Pegasus stock.
Notice of Hearing. A hearing will be held on 06-06-12 at 3:00 p.m. before the Honorable Steven Brick, Department 17, 1221 Oak Street, Oakland, CA 94612, to determine: (1) whether the Settlement should be approved as adequate, fair, and reasonable; (2) whether the action should be dismissed with prejudice as set forth in the Settlement Agreement; (3) the award of Plaintiff counsels' attorneys' fees and costs and incentive award to Plaintiff of $2,500; and (4) any other necessary matters. Plaintiff's counsel intend to request a fee of $500,000 plus their litigation costs of $17,900, which are less than the amounts counsel actually incurred in prosecuting the case.
All dates are subject to change. Any changes will be posted on www.PegasusSettlement.com. Please check for updates.
Release. If the settlement is approved, shareholders will be bound by the decision and will be deemed to have released any derivative claims that have or could have been brought in the Action. Individual claims will not be released.
SEE THE DETAILED NOTICE AND SETTLEMENT AGREEMENT FOR IMPORTANT REQUIREMENTS FOR FILING OBJECTIONS AND FOR THE FULL RELEASE.
Counsel For Plaintiff:
Jeffrey L. Fazio
Dina E. Micheletti
Fazio | Micheletti LLP
2410 Camino Ramon, Ste 315
San Ramon, CA, 94583
Counsel For Individual Defendants:
Susan S. Muck
Felix S. Lee
Fenwick & West LLP
555 California Street, 12th Floor
San Francisco, CA 94104
DO NOT CONTACT THE COURT WITH QUESTIONS ABOUT THIS SETTLEMENT
SOURCE: Fazio | Micheletti LLP
SEC Demands $30M from Pegasus Wireless (May 27, 2009)
SAN FRANCISCO (CN) - Pegasus Wireless Corp. and its president Jasper Knabb and CFO Stephen Durland defrauded the market for $30 million by issuing hundreds of millions of shares to, among others, Knabb's in-laws and mistress, and lying about it, the SEC claims in Federal Court.
The SEC claims Knabb and Durland forged and backdated documents, falsely told the SEC that they owned "only minimal amounts of shares," and inflated the putative value of "this once unheralded penny stock [to] a market capitalization of more than $1.4 billion. Unbeknown to investors, however, Knabb and Durland secretly controlled hundreds of millions of Pegasus shares, which they dumped on individual investors and the open market through 2006 and 2008, as Pegasus' share price steadily declined to pennies."
The SEC says Knabb and Durland "reaped more than $30 million through their securities law violations. They used the funds to support their extravagant lifestyles, including the purchase of homes, boats and sports cars."
The SEC claims that the two men "were basically printing Pegasus shares to enrich themselves. By February 2008, Pegasus had issued more than 75 percent of its total outstanding shares in this fraudulent manner."
The SEC seeks disgorgement, penalties and an injunction.
SEC Litigation Release: http://www.sec.gov/litigation/litreleases/2009/lr21060.htm
SEC Complaint: http://www.sec.gov/litigation/complaints/2009/comp21060.pdf
SEC Investigation Documents: http://www.4shared.com/dir/9918156/c3880480
Pegasus Wireless Filed For Chapter 11 Bankruptcy on January 28, 2008
Pegasus Wireless Bankrupty Court Documents: http://www.4shared.com/dir/6353535/7e80282e
Shareholder Evidence Database: http://PegasusEvidence.4shared.com
Company SEC Filings: http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001126752
Pegasus Wireless Corporation is a leading provider of advanced wireless solutions. Pegasus creates hardware and software solutions for broadband wireless networking and Internet access applications through its manufacturing facilities located in China and Taiwan. Pegasus' patented 802.11 technology is the platform for Wi-Fi technology, and the company offers cutting edge wireless products used in computer networking, industrial data transmission, and multimedia applications. Pegasus pioneered the industry's first driver-less, truly plug-and-play wireless Ethernet bridge, and the company's wireless networking products allow a higher user capacity per base station as compared to the competition. These products also offer advanced security, easy true plug-n-play installation, dynamic load balance, non-interrupting real-time roaming connectivity, e.g. VOIP, and fail-safe, self-healing mesh networking capability. Products are distributed through the company's facility located in California.
Company Share Structure
Outstanding Shares: 1.2 Billion (Call Transfer Agent)
Authorized Shares: 3 Billion (Increased from 100M to 3B on December 26, 2007)
Check for Share Structure Changes Here: https://esos.state.nv.us/SOSServices/AnonymousAccess/CorpSearch/CorpSearch.aspx
Entity Name: Pegasus Wireless Corp
Nevada Corp Number: C9474-2000
Stock Transfer Agent
Olde Monmouth Stock Transfer Company, Inc.
200 Memorial Parkway
Atlantic Highlands, NJ 07716
Phone: (732) 872-2727
Fax: (732) 872-2728
Pegasus Wireless Files For Chapter 11 Bankruptcy (January 28, 2008)
U.S. Bankruptcy Court
Southern District of Florida
West Palm Beach Division
Web Site: http://www.flsb.uscourts.gov
Case name: Pegasus Wireless
Case Number: 08-10924-PGH
Case Assigned to: Paul G Hyman Jr
Chapter: 11, Voluntary
Date Filed: 01/28/2008
Reasons for filing chapter 11: The company has no liquid assets and is defending 9 lawsuits in 5 states.
Pegasus Wireless Corporation
277 Royal Poinciana Way, Suite 153
Palm Beach, FL 33480
Tax id: 52-2273215
Kevin C Gleason, Esq
4121 N 31 Ave
Hollywood, FL 33021
Office of the US Trustee
51 S.W. 1st Ave.
Miami, FL 33130
Bankrupty Court Documents: http://www.4shared.com/dir/6353535/7e80282e
Pegasus Wireless Requests Shareholder Vote on Restructuring Plan (July 30, 2007, Market Wire)
Company Flagship Product: Cynalynx (no longer available)
PC Magazine - Cynalynx Product Review (May 3, 2007): http://www.pcmag.com/article2/0,1895,2123912,00.asp
PC Magazine - Comparison of Cynalynx to Other Wireless Media Devices: http://www.pcmag.com/category2/0,1874,924250,00.asp
Pending Lawsuits Against Pegasus Wireless
Pournaras Group vs. Pegasus Wireless: http://dockets.justia.com/docket/court-candce/case_no-3:2007cv04600/case_id-195607 (Shareholder Class Action Complaint in Florida)
Note: Formerly Mitchell vs PGSW: http://securities.stanford.edu/1036/PGWC_01/
Keller vs. Pegasus Wireless: http://tinyurl.com/yotfsb (Shareholder civil complaint)
Guilfoyle vs. Pegasus Wireless: http://courtgate.coca.co.clark.nv.us/DistrictCourt/asp/CaseNo.asp (Shareholder civil complaint in Nevada)
Tsao vs. Pegasus Wireless: http://www.sccaseinfo.org/pa5.asp?full_case_number=1-06-CV-070797 (Former CEO civil complaint in California)
Convertible Debt and Share Dilution Issue
Company officers issued shares to pay 2-year convertible notes entered in 2003 and matured in 2005.
The convertible notes were allegedly acquired from a shell company that has not been disclosed to date.
2006 Q3: 5,276,016 shares issued for $263,800.80 convertible debt (See 10-Q report filed Nov 22, 2006)
2006 Q4: 10,500,000 shares issued for $105,000.00 convertible debt (See 10-K report filed April 3, 2007)
2007 Q1: 13,000,000 shares issued for $130,000.00 convertible debt (See 10-Q report filed May 21, 2007)
2007 Q2: 7,300,000 shares issued for $70,300.00 convertible debt (See 10-Q report filed August 15, 2007)
2007 Q3: 5,000,000 shares issued for $50,000.00 convertible debt (See 10-Q report filed November 19, 2007)
Total shares issued to pay convertible debt to date: 32,676,016 shares.
Total outstanding shares (as of November 19, 2007): 46,908,848 shares.
Share dilution due to convertible debt: 32,676,016 shares / 46,908,848 shares = 70% of outstanding shares (as of November 19, 2007)
SEC Filings: http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001126752
Approximately 70% of the outstanding shares at the end of Q3-2007 were issued by company officers to pay an undisclosed convertible debt of $621,800.80.
Company officers have not disclosed the name of the convertible note holder or which acquired shell company had taken on this convertible debt.
Company officers have not informed shareholders of any attempt on their part to disqualify the convertible debt since it was not disclosed at time of settlement when a shell company was acquired.
Note: Company officers approved a 5-for-1 reverse share split effective on December 11, 2006. The stock was voluntarily de-listed from the NASDAQ Exchange on this date and the stock symbol was changed from PGWC to PGSW for unknown reasons.
Stock listed on NASDAQ Exchange on April 21, 2006
Note: Pegasus Wireless (PGSW, formerly PGWC) was a NASDAQ-listed company from April 21, 2006 to December 11, 2006
NASDAQ CEO Signature Series Video Interview with Jasper Knabb, CEO (July 21, 2006)
* Windows Player: http://origin.vcall.com/console/getStream.asp?ID=109178
* Real Player: http://origin.vcall.com/console/getStream.asp?ID=109179
NASDAQ Listing Timeline and Events
Apr 21, 2006: Pegasus Wireless begins trading on the NASDAQ Exchange under symbol PGWC.
June 30, 2006: Russell 2000/3000 Index funds automatically purchase shares of PGWC.
July 20, 2006: PGWC rings the opening bell at the NASDAQ Exchange
Aug 28, 2006: Russell 2000/3000 Index fund re-balancing.
Sep 25, 2006: Pegasus Wireless releases PR (8-K not filed) to announce plans to voluntarily de-list from the NASDAQ Exchange.
Oct 17, 2006: Pegasus Wireless files SEC Form 25 to end listing from NASDAQ Exchange.
Dec 11, 2006: Pegasus Wireless is voluntarily de-listed from NASDAQ Exchange at end of trading day. Stock symbol changed from PGWC to PGSW.
Amax Engineering Corporation (Fremont, CA)
Pegasus Wireless acquired a 51% controlling interest of Amax Engineering on December 22, 2005.
Amax Engineering Corporation
1565 Reliance Way
Fremont, CA 94539
Phone: (510) 651-8886
Sales: (800) 800-6328
Fax: (510) 651-4119
Web site: http://www.amax.com/amaxres/home.asp (Engineering)
Web site: http://www.amaxit.com (Information Technology)
Amax in the news: http://www.crn.com/white-box/202101618