Item 3. Legal Proceedings
ITEM 3. LEGAL PROCEEDINGS.
India Proceeding Involving Giri Devanur
In 2006, Mr. Devanur became
the CEO of an India-based company named Gandhi City Research Park, Private Limited (“Gandhi City Research Park”). Gandhi City
Research Park was liquidated as a result of the Lehman Brothers collapse in 2009. In 2010, an investor in Gandhi City Research Park filed
a fraud complaint with the Cubbon Park Police Station in Bengaluru, India, against, among others, Mr. Devanur. In 2014, the Cubbon Park
Police dismissed all claims. Subsequently, in 2015 the investor appealed the Cubbon Park Police’s decision before the Lower Court.
In November 2018, the Lower Court issued a criminal summons against, among others, Mr. Devanur. Mr. Devanur petitioned the High Court
to quash the summons. By order dated March 27, 2023, the High Court granted Mr. Devanur’s petition and ordered the Lower Court to
reconsider the investor’s appeal. On August 3, 2023, the Lower Court decided to uphold the Cubbon Park Police’s decision and
close the criminal case against Mr. Devanur. On December 4, 2023, Mr. Devanur received a petition to challenge the Lower Court’s
order to uphold the Cubbon Park Police’s decision and close Mr. Devanur’s criminal case. Mr. Devanur is vigorously contesting
this petition.
Malpractice Lawsuit
On July 13, 2023, the Company
filed a complaint in Franklin County, Ohio (the “Complaint”), against Buchanan, Ingersoll & Rooney, PC (“Buchanan”),
Rajiv Khanna (“Khanna”) (now deceased) and Brian S. North (“North,” together with Buchanan and Khanna, the “Buchanan
Legal Counsel”). The Complaint alleges that the Buchanan Legal Counsel failed to provide proper and timely legal advice during the
Company’s Tier 2 Regulation A offering, resulting in late Blue Sky notice filings with all required states prior to the Company
offering and selling securities in those states. As a result, the Company was subject to a number of inquiries, investigations, and subpoenas
by the various states, incurring significant legal fees and fines, lost opportunity due to pausing its Regulation A campaign, and the
loss of an institutional investment. The Company is seeking the forfeit of all legal fees associated with this matter; certain losses
incurred as the result of the misconduct by the Buchanan Legal Counsel that the Company is legally entitled to recover, including additional
fees and expenses and any damages provable from the loss of the institutional investment; and further legal and equitable relief as the
Court deems just and proper. The Buchanan Legal Counsel are vigorously defending the claims by the Company, have asserted a number of
defenses and filed a counterclaim for billed but unpaid fees (the “Counterclaim,” together with the Complaint, the “Lawsuit”).
The Company generally denied the allegations in the Counterclaim and asserted a number of defenses. The Company contends that any damages
claimed by the Buchanan Legal Counsel arise from their own negligence and failure to meet their contractual and professional obligations.
This case is scheduled to go to trial in late 2026. The Company cannot guarantee the timing and duration of the trial or eventual outcome
of the claims and defenses by any party in the Lawsuit.
GEM Lawsuit
On
November 1, 2024, we filed a lawsuit against GYBL in the Court pursuant to which we asserted two causes of action: (i) rescission of the
GEM Warrants issued to GYBL under the GEM Agreement, by and among us, GEM, under Section 29(b) of the Exchange Act, due to GYBL’s
underlying violation of Section 15(a) of the Exchange Act for effecting the GEM Warrants as an unregistered dealer, and (ii) in the alternative,
a declaratory judgment that the exercise price adjustment calculation of the GEM Warrants is governed by the terms provided in the GEM
Warrants, rather than the terms of the GEM Agreement. Following a motion to dismiss filed by GYBL on January 17, 2025, the Court granted
such motion to dismiss on March 14, 2025. On April 15, 2025, we filed an appeal of the Court’s decision dismissing our case to the
United States Court of Appeals for the Second Circuit (the “Second Circuit”). The parties filed a stipulation to
withdraw the appeal pending in the Second Circuit on March 11, 2026.
Additionally,
following the Court’s grant of GYBL’s motion to dismiss our lawsuit, GYBL filed a separate lawsuit against us, in which GYBL
is asserting two causes of action against us: (1) breach of the terms of the GEM Warrants, and (2) declaratory relief concerning the validity
and enforceability of the GEM Warrants. In addition to the declaratory relief, GYBL is seeking monetary damages in an amount to be determined
at trial, specific performance of the GEM Warrants and attorneys’ fees and litigation costs. On June 9, 2025, we filed a motion
to dismiss this lawsuit from GYBL. GYBL responded to our motion to dismiss on June 23, 2025, asserting that our motion to dismiss should
be denied, or, in the alternative, GYBL should be given leave to further amend its complaint. On June 30, 2025, the Company filed a reply
in support of its motion to dismiss. On August 21, 2025, the Court granted, in part, our motion to dismiss the amended complaint with
respect to GYBL’s claim for declaratory relief concerning the validity and enforceability of the GEM Warrants. The Court denied
our motion to dismiss in all other respects. Following the Court’s partial grant and partial dismissal of our motion to dismiss,
we filed an answer to GYBL’s amended complaint on September 4, 2025.
Securities and
Exchange Board of India Adjudication Order
On
March 3, 2026, the Securities and Exchange Board of India (“SEBI”) issued an adjudication order (Adjudication Order No. ORDER/AK/RK/2025-26/32161-32170)
in connection with financial reporting practices of Coffee Day Enterprises Limited (“Coffee Day”), a company listed on the
Bombay Stock Exchange and the National Stock Exchange of India Limited, relating to the accounting treatment of interest on borrowings
under applicable SEBI rules and regulations for certain prior financial periods of Coffee Day, including for the fiscal year periods of
2019-2020 to 2023-2024 and financial results for the fiscal year period of 2019-2020 to 2024-2025. The order by SEBI imposed a monetary
penalty on certain independent directors and executives of Coffee Day, including a monetary penalty of 300,000 Indian rupees (approximately
$3,260) on Giri Devanur, who served on Coffee Day’s board of directors from December 2020 until October 2024, in connection with
his oversight responsibilities during the relevant periods. This matter related to certain accounting treatment and disclosure interpretations
at Coffee Day and did not involve allegations of personal misconduct. The monetary penalty has been addressed in accordance with applicable
procedures.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
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PART II