Performant Financial Corp (Form: 8-K, Received: 03/02/2021 17:21:45)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 19, 2021

Performant Financial Corporation

(Exact name of registrant as specified in its charter)


Delaware (State or Other Jurisdiction of Incorporation)			001-35628 (Commission File Number)			20-0484934 (I.R.S. Employer Identification No.)

333 North Canyons Parkway

Livermore, California 94551

(Address of principal executive offices) (Zip Code)

(Registrant’s telephone number,

including area code)

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b–2 of the Securities Exchange Act of 1934 (§ 240.12b–2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, par value $.0001 per share	PFMT	The Nasdaq Stock Market LLC

Item 8.01 Other Events.

On September 17, 2020, Shiva Stein (“Plaintiff”) filed a Verified Stockholder Class Action Complaint (the “Complaint”) in the Court of Chancery of the State of Delaware against the Company and the members of its board of directors (the “Board”) captioned Shiva Stein v. Performant Financial Corporation, et al., C.A. No. 2020-0791-AGB (the “Action”). In the Action, Plaintiff alleged that the defendants breached their fiduciary duties of care and loyalty by allowing uninstructed shares to be purportedly “cast” as votes “For” a proposal to approve an amendment to our Certificate of Incorporation (the “Certificate”) authorizing the Board to effect a reverse stock split at a ratio ranging from 1 share-for-5 shares up to a ratio of 1 share-for-20 shares (the “Reverse Split Proposal”). Plaintiff sought to enjoin the declaration of any reverse stock split pursuant to any amendment to the Certificate effected in connection with the Reverse Split Proposal.

While the Company and the Board deny completely all of the allegations of wrongdoing in the complaint, on October 19, 2020, the Company filed with the U.S. Securities and Exchange Commission, a Form 8-K/A Current Report informing stockholders that following the filing of the Original 8-K, the Company was informed of an inconsistency related to broker discretion to vote shares for which a broker had not received instructions from the beneficial owner with respect to Proposal No. 3 (regarding the approval of an amendment of the Company’s certificate of incorporation to effect a reverse stock split of the outstanding shares of its common stock); that, without informing the Company, some but not all brokers treated Proposal No. 3 as a “routine” proposal despite the proxy materials for the Annual Meeting describing Proposal No. 3 as a “non-routine” proposal; and that, due to this inconsistency, the Company will not effect a reverse stock split at this time and will instead submit a new “routine” proposal to its stockholders, at a later date and subject to a new proxy statement, to amend its certificate of incorporation to effect a reverse stock split (the “Amended 8-K”). As a result of the Amended 8-K, Plaintiff agreed that her claims were moot and stipulated to dismissal of her claims.

On November 18, 2020, the Court entered a Stipulation and Order providing that Plaintiff’s action would be dismissed with prejudice only as to Plaintiff and the case will be closed. On February 19, 2021, Plaintiff and the Company entered into a settlement agreement under which the Company agreed to pay $100,000 in fees and expenses to Plaintiff’s counsel. The Court has not passed on the amount of fees and expenses. The description of the order is qualified in its entirety by reference to the order, which is attached as an exhibit hereto.

Plaintiff’s Counsel are Gustavo F. Bruckner of Pomerantz LLP, (212) 661-1100, Christopher J. Kupka of Fields Kupka & Shukurov LLP, (212) 231-1500, and Brian E. Farnan of Farnan LLP, (302) 777-0300, and the Company’s counsel are Bruce A. Ericson, Pillsbury Winthrop Shaw Pittman LLP, (415) 983-1000 and David J. Teklits, Morris, Nichols, Arsht & Tunnell LLP, (877) 772-6628.

Item 9.01 Financial Statements and Exhibits.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: March 2, 2021

PERFORMANT FINANCIAL CORPORATION

Chief Executive Officer

– 1 – IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE SHIVA STEIN, individually and on behalf of all others similarly situated stockholders of PERFORMANT FINANCIAL CORPORATION, Plaintiff, v. PERFORMANT FINANCIAL CORPORATION, LISA C. IM, BRADLEY M. FLUEGEL, WILLIAM D. HANSEN, JAMES LACAMP, and ERIC YANAGI, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) C.A. No. 2020-0791-AGB STIPULATION AND [PROPOSED] ORDER VOLUNTARILY DISMISSING ACTION AS MOOT AND RETAINING JURISDICTION TO CONSIDER APPLICATION BY PLAINTIFF’S COUNSEL FOR AN AWARD OF ATTORNEYS’ FEES WHEREAS, on September 17, 2020, Plaintiff filed the above-captioned action individually and on behalf of all other similarly situated stockholders (the “Action”) seeking, among other things, a declaration that a proposal to amend the Certificate of Incorporation (the “Certificate”) of Performant Financial Corporation (the “Company”) to authorize its board of directors to effect a reverse stock split (the “Certificate Proposal”) had not been approved by stockholders; WHEREAS, on October 19, 2020, the Company filed a Form 8-K/A Current Report informing stockholders of an inconsistency related to broker discretion to vote shares for which the broker had not received instructions from beneficial GRANTED

– 2 – owners with respect to the Certificate Proposal and indicating that the Company would not effect the reverse stock split at this time and, if it decides to seek a reverse stock split, will instead submit a new “routine” proposal to stockholders, at a later date and subject to a new proxy statement to amend the Certificate to effect a reverse stock split; WHEREAS, Plaintiff has concluded that the October 19, 2020 8-K mooted the relief sought in the Action and determined to dismiss the Action with prejudice as to Plaintiff and without prejudice as to the putative class while reserving the right to seek an award of a mootness fee; WHEREAS, no compensation in any form has passed directly or indirectly to Plaintiff or his attorneys and no promise, understanding or agreement to give any such compensation has been made, nor have the parties had any discussions concerning the amount of any mootness fee application or award; WHEREAS, no class has been certified in the Action; NOW, THEREFORE, upon the consent of the parties and subject to the approval of the Court, IT IS HEREBY ORDERED this ___ day of __________, 2020 that: 1. The Action and the claims asserted therein are dismissed with prejudice as to the named plaintiff only, and without prejudice as to members of the putative class of stockholders.

– 3 – 2. Because the dismissal is without prejudice as to the putative class of stockholders, and no compensation in any form has passed directly or indirectly to Plaintiff or his attorneys, and no promise to give any such compensation has been made, notice of dismissal is not required. 3. The Court retains jurisdiction of the Action solely for the purpose of considering an application by Plaintiff’s counsel for an award of a mootness fee in the event the parties are unable to reach agreement on any such fee which shall be subject to notice to stockholders. 4. This Order is entered without prejudice to any position, claim or defense of any party with respect to any application for an award of a mootness fee. Dated: November 17, 2020 OF COUNSEL: POMERANTZ LLP Gustavo F. Bruckner Samuel J. Adams 600 Third Avenue, 20th Floor New York, New York 10016 (T) 212.661.1100 FIELDS KUPKA & SHUKUROV LLP William J. Fields Christopher J. Kupka Samir Shukurov 1370 Broadway, 5th Floor – #5100 New York, New York 10018 (T) 212.231.1500 Respectfully submitted, FARNAN LLP /s/ Brian E. Farnan Brian E. Farnan (Bar No. 4089) Michael J. Farnan (Bar No. 5165) 919 N. Market St., 12th Floor Wilmington, DE 19801 Telephone: (302) 777-0300 bfarnan@farnanlaw.com mfarnan@farnanlaw.com Attorneys for Plaintiff

– 4 – OF COUNSEL: Pillsbury Winthrop Shaw Pittman LLP Bruce A. Ericson Four Embarcadero Center, 22nd Floor San Francisco, CA 94111-5998 MORRIS NICHOLS ARSHT AND TUNNELL LLP /s/ David J. Teklits David J. Teklits (Bar No. 3221) 1201 North Market Street, 16th Floor Wilmington, DE 19801 (302) 658-9200 Attorneys for Defendants IT IS SO ORDERED THIS ____day of ____________, 2020 ________________________ Chancellor Bouchard

This document constitutes a ruling of the court and should be treated as such. /s/ Judge Andre G Bouchard Court: DE Court of Chancery Civil Action Judge: Andre G Bouchard File & Serve Transaction ID: 66118366 Current Date: Nov 18, 2020 Case Number: 2020-0791-AGB Case Name: Shiva Stein v. Performant Financial Corporation Court Authorizer: Andre G Bouchard