Item 8.01 Other Events

Settlement of Derivative Lawsuit

Aterian, Inc. (the "Company") is filing this Current Report on Form 8-K to provide an update on the proposed settlement of the previously disclosed shareholder derivative action, captioned Zhang v. Aterian, Inc., et al.On October 21 and 25, 2021, and November 10, 2021, three shareholder derivative actions were filed on behalf of Aterian by Shaoxuan Zhang, Michael Sheller, and Tyler Magnus (the "Plaintiffs") in the U.S. District Court for the Southern District of New York (the "Court"). These actions, naming current and former directors and officers of the Company as defendants, and Aterian as a nominal defendant, asserted that the individual defendants breached their fiduciary duties and violated federal securities laws, among other claims. (These actions were predicated on substantively the same factual allegations made in the previously disclosed putative securities action consolidated under the caption Tate v. Aterian, Inc., et. al., 21-cv-04323-VM (the "Securities Action").) By Order dated November 16, 2021, the three cases were consolidated into a single action docketed under the Zhang case number (the "Derivative Action").

All defendants vehemently deny and continue to deny each of the claims and allegations of wrongdoing made in the Derivative Action (and in the Securities Action).

As previously disclosed, on September 12, 2022, the Court entered a final judgment approving a settlement in the Securities Action and, on December 12, 2022, the parties reached an agreement and entered into a Stipulation and Agreement of Settlement (the "Stipulation") to resolve the Derivative Action. Under the Stipulation, the Company agreed to adopt certain corporate governance reforms, the terms of which are outlined in Exhibit A to the Stipulation, and a payment of the Plaintiffs' attorneys' fees and expenses of $250,000. The proposed settlement was preliminarily approved by the Court on December 29, 2022, and a hearing to determine whether the Court should give final approval to the settlement has been scheduled for March 17, 2023, at 11:00 a.m.

As ordered by the Court, the Stipulation and Agreement of Settlement and all exhibits thereto, as well as the Notice of Pendency and Proposed Settlement of Stockholder Derivative Action, are attached as Exhibits 99.1 and 99.2 to this Current Report on Form 8-K. Additionally, the Stipulation and all exhibits are also available on the Company's Investor Relations website at https://ir.aterian.io/.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits



Number      Description
99.1          Stipulation and Agreement of Settlement
99.2
              Notice of Pendency and Proposed Settlement of Stockholder
            Derivative Action
104         Cover Page Interactive Data File (embedded within the Inline XBRL)

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