Item 3. Legal Proceedings
ITEM 3. LEGAL PROCEEDINGS
On October 2, 2018, Contract Pharmacal Corp. (“Contract
Pharmacal”) commenced an action, relating to a Sublease entered into between the Company and Contract Pharmacal in May 2018 with
respect to the property that was formerly occupied by the Company’s former subsidiary WMI, at 110 Plant Avenue, Hauppauge, New York.
In the action, Contract Pharmacal sought damages for an amount in excess of $1,000,000 for the Company’s alleged violation of the
terms of the subject sublease, specifically the failure to make the entire premises available by what it claims was the Sublease commencement
date. The validity of the action is extremely suspect in that the subject sublease had no specific commencement date and Contract Pharmacal
ultimately received all the space. Discovery was conducted and the Plaintiff moved for summary judgement and to amend its complaint to
add a new cause of action all of which the company opposed. On July 8, 2021, the Court denied Contract Pharmacal’s motion for summary
judgement and to add an additional cause of action. In the Order, the Court granted Contract Pharmacal’s Motions to drop its claim
for specific performance and to amend its Complaint to reduce its claim for damages to $700,000 both of which benefit the Company. Following
the Court’s decision, Contract Pharmacal filed a Motion to reargue its original motion which the Company opposed. The Court denied
that motion on November 30, 2021 and then on March 10, 2022, Contract Pharmacal filed an appeal of the Court’s decision with the
Appellate Division of the State of New York. The Company opposed that action. The Company was again successful as the Appellate Division
upheld the lower court’s denial of Contract Pharmacal’s motion for summary judgement and its motion to amend its Complaint.
Contract Pharmacal has now submitted a motion to the Appellate Division requesting leave to reargue the court’s denial of its original
appeal. The Company will oppose that motion. The Appellate Division has yet to act in respect to Contract Pharmacal’s most recent
motion to reargue the Court’s denial of the original appeal. The Company continues to dispute the validity of the claims asserted
by Contract Pharmacal and intends to contest them vigorously.
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