Item 3. Legal Proceedings
ITEM 3. LEGAL PROCEEDINGS
A number of actions
have been commenced against us in the ordinary course of business by vendors, landlords and former landlords, including a third
party claim as a result of an injury suffered on a portion of a leased property not occupied by us. As certain of these claims
represent amounts included in accounts payable they are not specifically discussed herein.
Contract Pharmacal
Corp. (“Contract Pharmacal”) commenced an action on October 2, 2018, relating to a Sublease entered into between us
and Contract Pharmacal in May 2018 with respect to the property that was formerly occupied by Welding Metallurgy, Inc. (“WMI”),
at 110 Plant Avenue, Hauppauge, New York. In the action, Contract Pharmacal seeks damages for an amount in excess of $1,000,000
for our failure to make the entire premises available by the Sublease commencement date. We dispute the validity of the claims
asserted by Contract Pharmacal and believe we have meritorious defenses to those claims. The pace of litigation in the civil courts
in New York has been slowed by the impact of Covid-19. The Court has ordered us and Contract Pharmacal to complete discovery, which
is ongoing.
On December 20, 2018,
we completed the sale of all of the outstanding shares of our subsidiary, WMI, to CPI Aerostructures (“CPI”). There
ensued a dispute with CPI regarding amounts it claimed were due based upon the value it ascribed to the inventory as of the closing
date. On December 23, 2020, we reached an agreement with CPI to settle the working capital dispute. Pursuant to the settlement,
the escrow agent released to CPI the $1,380,684 remaining in the escrow account which had been established at the closing and we
exchanged mutual releases customary in the circumstances.
From time to time we
may be engaged in various lawsuits and legal proceedings in the ordinary course of our business. We are currently not aware of
any legal proceedings the ultimate outcome of which, in our judgment based on information currently available, would have a material
adverse effect on our business, financial condition or operating results. There are no proceedings in which any of our directors,
officers or affiliates, or any registered or beneficial stockholder of our common stock, is an adverse party or has a material
interest adverse to our interest.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
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PART II
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