CV Sciences Inc. (OTCMKTS:CVSI) announced on September 27, 2022 about receiving preliminary approval of the proposed settlement of six shareholder derivative lawsuits pending in Nevada and California. The lawsuits have alleged breach of fiduciary duty and other claims against current and former board members.
On Tuesday, CVSI stock fell 7.32% to $0.0380 with 776.31K shares, compared to its average volume 958.99K shares. The stock moved within a range of $0.0346 – 0.0440 after opening trade at $0.0420.
CV Sciences, Inc. Announces Proposed Settlement of Shareholder Litigation
The lawsuits were filed after atweet issued by Citron Research on August 20, 2018, suggesting that the company misled investors by failing to disclose certain facts related to its efforts to secure patent protection for its product CVSI-007 from the United States Patent and Trademark Office (USPTO), which facts plaintiffs alleged made it less likely that the company would obtain patent protection.
Defendants at all times denied any wrongdoing. Back on May 19, 2020, the USPTO issued a patent pertaining to CVSI-007. The settlement was finally executed by July 28, 2022. On September 21, 2022, the District Court of Clark County, Nevada granted a motion for preliminary approval of the settlement agreement. On November 14, 2022, at 1:30 p.m., the District Court of Clark County, Nevada, is set to a hearing to determine whether to grant final approval of the settlement agreement.
If approved, the proposed settlement will resolve all claims asserted the defendants in these shareholder actions without any admission, concession or finding of any fault, liability or wrongdoing by the company or any defendant. The proposed settlement contemplates the implementation by the company of certain corporate reforms and payment of $275,000 in attorneys’ fees to plaintiffs. The company anticipates that all settlement payments will be paid through insurance, but no assurance can be provided.
CVSI stock is trading below the 20-Day and 50-Day Moving averages of $0.0450 and $0.0402 respectively. Moreover, the stock is trading below the 200-Day moving average of $0.0851.