Couple comments. The 10% rule is that if the settlement exceeds 10% of current assets it must be disclosed. That does not mean if the amount is less it does not need to be disclosed - at that point the company must still make a materiality decision. (SEC of course doesn’t determine what is material to be posted it just sanctions improper non-disclosure after the fact). I asked Gemini to identify the amount of “current assets” in recent disclosures and it said $7.2mm. I am not in the middle of the night gonna try to check that but if that is a correct statement the 10% threshold is exceeded if the settlement amount is more than $720k. Second, a confidentiality provision does not exempt company from sec reporting requirements (Krisgo is not necessarily saying otherwise). Sec reporting rules supersede a contractual confidentiality provision. Third the case is a contingency fee case undoubtedly and therefore professional fees have not been incurred and therefore the reporting would not change. Whether the settlement is “final” enough to be reported as a subsequent event before an Order is entered would be determined by the terms of the underlying and confidential settlement agreement. As of this post there is no order only a “corrected proposed” order has been submitted to the court. Semper Fi has posted that document as submitted. A lot of maybes. LFG.
Krisgo, I am sure our legal team weighed every option they had available to not disclose their hand on the settlement specifics even to fight it legally should they be challenged by say by a investor or other parties of interest. If settlement $$ is not disclosed I wonder if there is a legal case in the history books they are leaning on for precedent? Let’s see how the 10Q plays out and go from there.
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