Business Context and Reporting Period
This Form 8-K Current Report is filed by Akers Biosciences, Inc. (the "Company") on October 11, 2018, covering events occurring between October 5 and October 8, 2018. The Company is an emerging growth company focused on biosensor technology platforms, including the Particle Immuno-Filtration Assay (PIFA), Micro Particle Catalyzed (MPC), and Rapid Enzymatic Assay (REA) technologies.
Key Financial Metrics and Material Changes
The filing does not provide comprehensive financial statements, revenue, profit, or cash flow data for a specific reporting period. However, it discloses specific financial obligations and related party transactions:
- Executive Compensation: Former CEO John J. Gormally will receive a $100,000 cash payment and 27,500 fully vested restricted shares upon resignation.
- New Executive Compensation: New CEO/Interim CFO Howard R. Yeaton will receive a $25,000 annual base salary and monthly grants of 30,000 unrestricted shares.
- Related Party Payments: The Company paid $58,000 to Financial Consulting Strategies LLC (FCS), a related party, during the three and nine months ended September 30, 2018.
- Legal Settlement: The Company agreed to pay $930,000 to settle litigation with Pulse Health, LLC.
Management Changes and Strategic Shifts
Executive Departure and Appointment
On October 5, 2018, John J. Gormally resigned as CEO and Board member effective immediately for health reasons. The Board appointed Howard R. Yeaton as the new CEO and interim CFO. Mr. Yeaton's firm, FCS, continues to provide accounting services to the Company.
Strategic Refocus
The Board determined to focus primarily on the commercialization of the PIFA Technology platform and its core products (PIFA Heparin/PF4 and PIFA Pluss/PF4). The Company will continue manufacturing BreathScan Alcohol Detectors and Tri-Cholesterol products but is withdrawing the BreathScan OxiChek product line.
Legal and Regulatory Developments
- Litigation Settlement: A settlement with Pulse Health, LLC requires the Company to pay $930,000 and accept a permanent injunction prohibiting the sale of the BreathScan OxiChek product and related aldehyde detection devices. Management does not anticipate a material revenue impact from this withdrawal.
- AIM Market Status: finnCap Ltd, the Company's Nominated Adviser on the London Stock Exchange's AIM market, issued a three-month resignation notice on October 6, 2018. Failure to appoint a replacement within this period will result in the suspension and potential cancellation of the Company's AIM listing.
Investor Verification Checklist
- Verify the Company's ability to secure a new Nominated Adviser for the AIM market within three months to avoid trading suspension.
- Confirm the impact of the $930,000 legal settlement on the Company's current cash reserves and liquidity position.
- Monitor the transition of leadership under the new CEO and the effectiveness of the strategic pivot to the PIFA platform.
- Review the Resignation Agreement (Exhibit 10.1) and Employment Agreement (Exhibit 10.2) for additional terms regarding equity vesting and termination conditions.