Item 7.01 Regulation FD Disclosure.
As previously disclosed, a subsidiary of NCS Multistage Holdings. Inc. (the “Company,” “NCS”, “we” or “our”) was a defendant in a lawsuit in state district court in Texas, for which the trial began during the last week of April 2023. On May 2, 2023, the jury returned a verdict against us, and we accrued a liability of $17.5 million as of March 31, 2023, representing our best estimate of the damages we expected to be awarded, which was potentially subject to additional calculated interest. On May 15, 2023, a judgment was rendered which awarded the plaintiffs damages of $42.5 million, inclusive of interest and netting $0.7 million awarded to us associated with unpaid invoices, plus court costs and post-judgment interest.
The Company believes that existing established case law supports a strong ground to appeal the judgment with regards to the proper measure of damages and several other bases. NCS intends to appeal the judgment and believes it has strong arguments that may lead to a reversal of some or all of the awarded damages. In addition, the Company expects a large portion, up to all, of any resultant liability to be covered by the Company’s insurance carrier.
The information contained in this Item 7.01 of this Current Report on Form 8-K shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities of that section, and is not incorporated by reference into any registration statement or other filing under the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing.
Forward Looking Statements.
This Current Report on Form 8-K contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods, or by the inclusion of forecasts or projections. Forward-looking statements, including our expectations regarding losses, litigation outcome and insurance coverage of the lawsuit in state district court in Texas, are based on our current expectations and assumptions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Such forward-looking statements are intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The Company’s actual results could differ materially from those projected in such forward-looking statements. Factors that could affect those results include those mentioned in the documents that the Company has filed with the Securities and Exchange Commission.
