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Replies to post #61681 on Micro Imaging Technology Inc (MMTC)
06/25/12 2:12 PM
On May 11, 2009, Divine Capital Markets, LLC and a group of investors (collectively, “Plaintiffs”) filed a civil action against the Company and several of its officers and directors (collectively, the “Company”) in the New York Supreme Court, New York County. Plaintiffs alleged breach of contract and unjust enrichment by the Company, as well as fraud, tortious interference with a contractual relationship and breach of fiduciary duty by the Company’s officers and directors. The lawsuit alleges that the Company breached certain conversion provisions of secured convertible debentures purchased by investors during 2008. Plaintiffs seek relief including repayment of $390,000 in remaining principal debentures, $117,000 in penalties, additional interest and the issuance of 2,424,240 shares of the Company’s common stock to plaintiffs. The lawsuit also seeks assignment of the Company’s patents to Plaintiffs.
On May 12, 2009, before the Company had been able to retain New York counsel, Plaintiffs appeared in court and obtained a temporary restraining order, which barred the Company from using or assigning any of its patents pending a hearing scheduled for May 19. Divine also filed a motion for preliminary injunctive relief seeking an order: (i) compelling the Company to cease and desist any and all use of several patents; (ii) permitting plaintiffs to sell or otherwise dispose of the patents; (iii) compelling the Company to immediately issue the 2,424,240 shares to several investors; and (iv) compelling the Company to issue all shares covered by the convertible debenture agreement.
The Company opposed Divine's motion. On May 19, at the conclusion of oral argument on Plaintiffs’ motion, Justice Richard B. Lowe, III ruled in the Company’s favor. Justice Lowe vacated the temporary restraining order and denied plaintiffs’ motion for a preliminary injunction in full.
The Company believes that Divine was not entitled to convert the debentures in question and intends to vigorously defend this matter as the lawsuit proceeds.
On September 8, 2009, the Board of Directors approved a September 3, 2009 settlement of a lawsuit brought against the Company in May 2009 by purchasers of the Company’s convertible debentures sold by Divine Capital Markets. The Company issue 5,889,997 shares of unrestricted common stock, valued at approximately $0.0748 per share, to the debenture holders in full satisfaction of all claims and in full payment of the $410,000 in principal debentures and $33,745 in interest accrued on the debentures through the September 3, 2009 settlement date. As part of the settlement, the debenture holders waived $123,000 in penalties and $28,860.25 in interest which the Company had recorded under the default terms of the debentures. Consequently, the Company realized a gain of $151,860 on the settlement.
AI
