Benzinga | Oct 15, 2020 04:29PM EDT

Phunware In 8-K Discloses On Oct. 9, Co. Entered Settlement Agreement And Mutual General Release With Uber; Co. To Pay $4.5M To Uber, Co.'s Insurance Carrier Will Pay $1.5M For Total Of $6M

On October 9, 2020, Phunware, Inc. (the "Company") entered into a Settlement Agreement and Mutual General Release (the "Settlement Agreement") with Uber Technologies, Inc ("Uber") and certain other parties related to the Company's cause of action (hereinafter, the "Action") against Uber, Uber's cross-complaint against the Company and Uber's amended cross-complaint against the Company and certain individual defendants (the "Individual Defendants"), including Alan S. Knitowski, who serves as a director and the Company's President and Chief Executive Officer. The Action is captioned Case No. CGC-17-561546 in the Superior Court of the State of California, County of San Francisco (the "Court").

As provided in the Settlement Agreement, each party denies engaging in any wrongdoing whatsoever and specifically denies each and every allegation of wrongdoing alleged in the Action, and each party further denies any and all claims of damage or for other relief by any other party in any amount whatsoever. Furthermore, both parties have agreed to fully and finally settle, compromise, and resolve all disputes, differences and disagreements that have existed, now exist, or may exist between them that fall within the subject matter of the Action.

The Settlement Agreement provides that Phunware and its insurance carriers will pay a total sum of $6,000,000 to Uber, of which the Company's insurance carrier will pay $1,500,000 to settle Uber's claims against the Individual Defendants while the Company will pay a total of $4,500,000 to Uber in a series of installments beginning no later than December 31, 2020, and ending no later than September 30, 2021. The Settlement Agreement further provides that the Company and the Individual Defendants fully release claims against Uber relating to the Action and upon receipt of the payments, Uber will fully release claims against the Company and the Individual Defendants relating to the Action. The Company intends to record a loss for its portion of the settlement in its condensed consolidated financial statements in its quarterly report on Form 10-Q for the period ending September 30, 2020. The Settlement Agreement remains subject to Court approval.

Importantly, the Company continues to evaluate any and all remedies regarding the matter and fully intends to aggressively pursue the full and complete recovery of the Company's $4,500,000 plus more than $2,000,000 in legal and other expenses incurred to date as related to the Action under distinctly separate new action(s).