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Item 3. Legal Proceedings

2025-03-31 compared with 2024-04-01 · 5 added, 61 removed, 2 unchanged (97% of the section changed)

Legal Proceedings

September 27, 2019, iGalen International Inc., which was at that time one of our majority-owned subsidiaries, and iGalen Inc., its wholly-owned

subsidiary, filed a complaint in the Superior Court of the State of California, County of San Diego, Central Division, against Gara Group,

Inc., a Delaware corporation, and certain affiliated or related entities, including the Chief Executive Officer of the Gara Group (collectively

these entities are referred to herein as the “Gara Group”).

A similar complaint had been filed in Utah on September 26, 2019,

but subsequently re-filed in California.

The complaint, as amended on October 24, 2019, enumerates causes of action for breach of contract,

breach of covenant of good faith and fair dealing and intentional interference with economic relations.

and Gara Group are parties to a Specialized Services Agreement, dated March 29, 2017 (the “Specialized Services Agreement”).

contracted with Gara Group to provide for services that include, among other things, (i) product fulfillment;

(ii) software

development and maintenance of an onsite “Platform,” which includes a company website and interactive portal referred to

as the “Back Office”;

and (iii) managing iGalen’s social media sites.

The Gara Group had previously claimed that iGalen

owed Gara Group certain amounts, including (i) $125,000 for “Back Office Fees”;

(ii) $150,000 for “Speaking Fees”;

and (iii) $67,299 for services related to iGalen’s merchant account, back office, and shipping fulfillment, invoiced on August

28 and 31, and September 15, 2019.

iGalen Inc.’s amended complaint notes that no provision in the Specialized Services Agreement

allows for the particular “Back Office Fees” of $125,000 and that no provision in the Specialized Services Agreement allows

for the so-called “Speaking Fees” of $150,000.

Gara Group cut off services to iGalen following iGalen’s indication

that it was disputing the amounts owed.

iGalen’s amended complaint notes that the actions of Gara Group and Mr.

Gara have caused,

and continue to cause, iGalen to suffer substantial harm by, among other things, making it so iGalen was unable to communicate with distributors

via its website and Back Office, fulfill orders made by distributors, or pay commission to distributors.

iGalen is seeking damages.

October 10, 2019, Gara Group filed a complaint in the Superior Court of the State of California, County of San Diego, Central Division

against iGalen International Inc., iGalen Inc., Alset International Limited, Chan Heng Fai, Dr.

Rajen Manicka and David Price, an executive

of iGalen Inc.

Gara Group’s complaint for damages asserts that the Gara Group is entitled to general damages of $9,000,000 and

liquidated damages of $50,000,000.

Gara Group filed an amended complaint filed on March 13, 2020.

The court dismissed Kosta Gara from

the iGalen suit and dismissed a cause of action for intentional interference with economic relations on January 14, 2022.

The court set

a trial date of April 7, 2023.

iGalen International Inc.

was sold by one of the Company’s subsidiaries on December 30, 2020.

April 13, 2022, the parties to these lawsuits entered into a settlement agreement, resolving these matters.

addition, from time to time, during the normal course of our businesses, we may be subject to various litigation claims and legal disputes,

including in the area of intellectual property (e.g., trademarks, copyrights and patents).

Our intellectual property rights extend to

our technology, business processes and the content on our website.

We use the intellectual property of third parties in marketing and

providing our services through contractual and other rights.

Despite our efforts, from time to time, third parties may allege that we

have violated their intellectual property rights.

the results of claims, lawsuits and proceedings in which we may be involved cannot be predicted with certainty, we do not currently believe

that the final outcome of the matters discussed above will have a material adverse effect on our business, financial condition or results

of operations.

However, defending and prosecuting any such claims is costly and may impose a significant burden on our management and

In addition, we may receive unfavorable preliminary or interim rulings in the course of litigation, and there can be no assurances

that favorable final outcomes will be obtained.

With regard to intellectual property matters which may arise, if we are unable to obtain

an outcome which sufficiently protects our rights, successfully defends our use or allows us time to develop non-infringing technology

and content or to otherwise alter our business practices on a timely basis in response to the claims against us, our business, prospects

and competitive position may be adversely affected.

Company is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated.

are no material proceedings to which any director, officer or affiliate of the Company, or any owner of record or beneficially of more

than five percent of any class of voting securities of the Company, or any associate of any such director, officer, affiliate of the

Company, or security holder is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company

or any of its subsidiaries.

Mine Safety Disclosures

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 3. Legal Proceedings