Applied Intuition Announces Favorable Resolution of Securities Complaint

Applied Intuition announces the favorable resolution of a complaint arising from the acquisition of Embark Technology, Inc.
Dec 28, 2023

As previously disclosed, on May 25, 2023, Embark Technology, Inc. (“Embark”) and Applied Intuition, Inc. (“Applied”) entered into an Agreement and Plan of Merger, pursuant to which, among other matters, Azara Merger Sub, Inc. merged with and into Embark, with Embark continuing as the surviving corporation and as a wholly owned subsidiary of Applied (the “Merger”).

On June 26, 2023, a putative class action complaint was filed in the Court of Chancery of the State of Delaware (“Court”) by Marceil A. Hanshew, a stockholder of Embark (“Plaintiff”), against Embark and the then-members of Embark’s Board of Directors (collectively, “Defendants”), captioned Marceil A. Hanshew v. Embark Technology, Inc. et al., C.A. No. 2023-0654-NAC (the “Action”). The complaint alleged that the disclosures made in the preliminary proxy statement on Schedule 14A filed with the Securities and Exchange Commission (the “SEC”) on June 16, 2023, in connection with the Merger, contained false and misleading statements. The complaint sought, among other forms of relief, a preliminary injunction to enjoin the Merger.

On June 26, 2023, Embark filed a definitive proxy statement on Schedule 14A with the SEC (“Proxy”), and on June 29, 2023, Plaintiff and Plaintiff’s spouse, David L. Hanshew (collectively, “Plaintiffs”), filed an amended complaint captioned David L. Hanshew in His Capacity as Attorney-in-Fact for Marceil A. Hanshew and Marceil A. Hanshew v. Embark Technology, Inc. et al., C.A. No. 2023-0654-NAC.

To resolve the Action, Plaintiffs and Defendants ultimately agreed that Embark would make certain additional disclosures, which Embark made in Amendment No. 1 to the Proxy filed with the SEC on July 10, 2023 (the “July 10 Amendment”).

On August 1, 2023, Plaintiffs voluntarily dismissed the Action as moot, and later that day, the Court entered a stipulated order dismissing the Action with prejudice as to the Plaintiffs and without prejudice as to any actual or potential claims of any other member(s) of the putative class. The Court retained jurisdiction solely for the purpose of adjudicating Plaintiffs’ counsel’s anticipated application for an award of attorneys’ fees and reimbursement of expenses in connection with the disclosures in the July 10 Amendment.

In order to avoid the time and expense of continued litigation, Applied, as successor in interest of Embark, subsequently agreed to pay $114,000 to Plaintiffs’ counsel for attorneys’ fees and expenses in full satisfaction of their claim for attorneys’ fees and expenses in the Action. On December 21, 2023, the Court entered an order closing the case, subject to Applied filing an affidavit with the Court confirming that this notice has been issued. In entering the order, the Court was not asked to review, and did not pass judgment on, the payment of the attorneys’ fees and expenses or their reasonableness.