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Item 3. Legal Proceedings

2022-03-23 compared with 2021-03-17 · 47 added, 73 removed, 10 unchanged (92% of the section changed)

1 unchanged sentence

time to time, the Company is a party to, or otherwise involved in, legal proceedings arising in the normal course of business.

As of the date of this report, except as described below, the Company is not aware of any proceedings, threatened or pending,

against it which, if determined adversely, would have a material effect on its business, results of operations, cash flows or

financial position.

September 20, 2018, Anthony Pepe, individually and on behalf of a class, filed with the United States District Court for the District

of New Jersey a complaint against the Company, certain current and former executive officers and directors of the Company and

the other defendants named therein for violation of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder.

class consisted of the persons and entities who purchased the Company’s common stock during the period from September 23,

2013 through September 7, 2018.

Pepe also alleged violation of other sections of the Exchange Act by the defendants named in the

complaint other than the Company.

Pepe seeks damages, pre-judgment and post-judgment interest, reasonable attorneys’

expert fees and other costs.

January 16, 2019, Ms.

Susan Church, a stockholder of the Company, filed with the United States District Court for the Western

District of Washington a derivative suit against certain current and former executive officers and directors of the Company alleging

breach of fiduciary duties, unjust enrichment, waste of corporate assets, and violations of the rules governing proxy solicitation.

Church sought, among other things, money damages, disgorgement of profits from alleged wrongful conduct, including cash bonuses,

pre-judgment and post-judgment interest, reasonable attorneys’

fees, expert fees and other costs.

December 16, 2020, the United States District Court for the District of New Jersey approved the terms of the settlement of the

above class action, the derivative action discussed above, and two related derivative actions.

The Company paid $450,000 for its

share of the total class action settlement.

As for the settlement of the derivative lawsuits, on February 14, 2021, the Board

of Directors of the Company approved certain corporate governance changes that the Company agreed to make pursuant to the terms

of the settlement, including an amendment to its Bylaws.

the date of this report, except as described below, the Company is not aware of any proceedings, threatened or pending, against it which,

if determined adversely, would have a material effect on its business, results of operations, cash flows or financial position.

Insurance Underwriters Inc.

filed suit against us in federal court in Delaware seeking a declaratory judgment that there was no

insurance coverage for any settlement, judgment, or defense costs in the class and derivative litigation, that the monies totaling

approximately $1 million it paid to the Company in connection with the SEC investigation were not covered by insurance, and for

recoupment of the monies already paid.

We have retained counsel to defend us which has filed an answer to the complaint denying

its material allegations, as well as a counterclaim against Liberty for breach of contract, declaratory judgment, bad faith and

violation of the Washington State Consumer Protection Act, alleging among other things that Liberty wrongfully denied the Company’s

claims for coverage of the class and derivative litigations, and seeking money damages.

filed suit against us in federal court in Delaware seeking a declaratory judgment that there was no insurance

coverage for any settlement, judgment, or defense costs in the class and derivative litigation, that the monies totaling approximately

$1 million it paid to the Company in connection with the SEC investigation were not covered by insurance, and for recoupment of the monies

already paid.

We have retained counsel to defend us which has filed an answer to the complaint denying its material allegations, as well

as a counterclaim against Liberty for breach of contract, declaratory judgment, bad faith and violation of the Washington State Consumer

Protection Act, alleging among other things that Liberty wrongfully denied the Company’s claims for coverage of the class and derivative

litigations, and seeking money damages.

Liberty Insurance Underwriters Inc.

filed suit against us in federal court in Delaware seeking

a declaratory judgment that there was no insurance coverage for any settlement, judgment, or defense costs in the class and derivative

litigation, that the monies totaling approximately $1 million it paid to the Company in connection with the SEC investigation were not

covered by insurance, and for recoupment of the monies already paid.

The case has been set for trial in July, 2022.

November 2017, Lee Pederson, a former Biozone lawyer, filed a lawsuit in the U.S.

District Court in Minnesota against co-defendants

the Company, Dr.

District Court in Minnesota against co-defendants the

Phillip Frost, OPKO Health, Inc.

and Brian Keller alleging that defendants engaged in wrongful conduct related

to Biozone, including causing Biozone to enter into an allegedly improper licensing agreement and engaged in alleged market manipulation

(“Pederson I”).

On September 13, 2018, the United States District Court granted the Company and its co-defendants’

motion to dismiss Pederson’s amended complaint in Pederson I for lack of personal jurisdiction in Minnesota.

11, 2018, Pederson filed a notice of appeal with the United States Court of Appeals for the Eighth Circuit.

The plaintiff’s

appeal was denied and the dismissal of Pederson I affirmed in March 2020.

Meanwhile, in July 2019, Lee Pederson had filed another

lawsuit in the U.S.

District Court in Minnesota against co-defendants the Company, Dr.

Frost, and Daniel Fisher (“Pederson

In his complaint in Pederson II, Pederson alleges tortious interference by the Company and Dr.

Frost with an alleged

collaboration agreement between Mr.

and Brian Keller alleging that defendants engaged in wrongful conduct related to Biozone,

including causing Biozone to enter into an allegedly improper licensing agreement and engaged in alleged market manipulation (“Pederson

On September 13, 2018, the United States District Court granted the Company and its co-defendants’ motion to dismiss

Pederson’s amended complaint in Pederson I for lack of personal jurisdiction in Minnesota.

On October 11, 2018, Pederson filed

a notice of appeal with the United States Court of Appeals for the Eighth Circuit.

The plaintiff’s appeal was denied and the dismissal

of Pederson I affirmed in March 2020.

Meanwhile, in July 2019, Lee Pederson had filed another lawsuit in the U.S.

District Court in Minnesota

against co-defendants the Company, Dr.

Frost, and Daniel Fisher (“Pederson II”).

In his complaint in Pederson II, Pederson

alleges tortious interference by the Company and Dr.

Frost with an alleged collaboration agreement between Mr.

Pederson and Mr.

In Pederson II, Mr.

Pederson seeks damages in the amount of $800,000

or such other amount as may be determined at trial.

Pederson II had previously been stayed by the court, pending disposition of

With that first lawsuit having been dismissed and appeal denied, the stay was lifted in Pederson II, and the Company

and all other defendants in that case filed Motions to Dismiss the (then amended) complaint.

On November 19, 2020 the Magistrate

Judge recommended dismissal of Pederson II, and further recommended that Pederson be restricted from filing any other actions

in the District of Minnesota against defendants on the same or similar allegations as those in Pederson II, and on January 4,

2021 the District Court Judge adopted those recommendations and ordered dismissal of Pederson II.

On February 1, 2021 Pederson

filed a Notice of Appeal from the order of dismissal of Pederson II in the Eighth Circuit, and that appeal remains pending.

May 19, 2020, A.G.P./Alliance Global Partners (“AGP”), which had previously acted as the Company’s underwriter,

placement agent and sales agent in connection with the Company’s registered and exempt equity offerings, filed a lawsuit

against the Company in the United States District Court for the Southern District of New York alleging violation of a lock-up

provision under the Placement Agent Agreement, dated January 28, 2020 (the “Placement Agent Agreement”), by and between

the Company and AGP.

AGP seeks (i) damages estimated in the complaint to be in excess of $1 million and attorneys’

and (ii) declaratory relief.

The Company has answered the complaint and discovery has been initiated.

the Company intends to defend itself vigorously from the claims in the aforementioned disputes, it is unable to predict the outcome

of these legal proceedings.

Pederson seeks damages in the amount of $800,000 or such other amount as may be determined at trial.

had previously been stayed by the court, pending disposition of Pederson I.

With that first lawsuit having been dismissed and appeal

denied, the stay was lifted in Pederson II, and the Company and all other defendants in that case filed Motions to Dismiss the (then

amended) complaint.

On November 19, 2020 the Magistrate Judge recommended dismissal of Pederson II, and further recommended that Pederson

be restricted from filing any other actions in the District of Minnesota against defendants on the same or similar allegations as those

in Pederson II, and on January 4, 2021 the District Court Judge adopted those recommendations and ordered dismissal of Pederson II.

February 1, 2021 Pederson filed a Notice of Appeal from the order of dismissal of Pederson II in the Eighth Circuit, and on December

29, 2021 the Eighth Circuit affirmed the decision of the District Court.

Thereafter, on or about January 11, 2022 Pederson sought via

petition, re-hearing en banc by the Eighth Circuit, which petition remains pending.

the Company intends to defend itself vigorously from the claims in the aforementioned disputes, it is unable to predict the outcome of

these legal proceedings.

Any potential loss as a result of these legal proceedings cannot be reasonably estimated.

the Company has not recorded a loss contingency for any of the aforementioned claims.

As a result, the Company

has not recorded a loss contingency for any of the aforementioned claims.

Mine Safety Disclosures

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 3. Legal Proceedings