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On January 3, 2025, the defendants filed their reply in further support of the Motion to Dismiss.
+Added: On September 8, 2025, the Court issued an order staying the Securities Lawsuit and administratively closing it pending resolution of the Motion to Dismiss.
See discussion in “Note 14 - Commitments and Contingencies”.
1 unchanged sentence
If an unfavorable action were to occur, it is possible that the impact could be material to the Company’s results of operations in the period(s) in which any such outcome becomes probable and estimable.
+Added: Derivative Lawsuit
+Added: On November 15, 2023, a derivative action was filed in the matter styled, Weich v.
+Added: Cummins, et al., Case No.
+Added: A-23-881629-C in the District Court of Clark County, Nevada (the “Derivative Lawsuit”).
+Added: The Weich complaint named as defendants certain members of the Company’s Board of Directors and its Chief Executive Officer Wesley Cummins and purports to name the Company’s then Chief Financial Officer David Rench as a defendant.
+Added: The complaint asserted claims for breach of fiduciary duties, corporate waste and unjust enrichment based upon allegations that the defendants caused or allowed the Company to make materially false and misleading statements regarding the Company’s business, operations, and compliance policies.
+Added: Specifically, the complaint alleged that the Company overstated the profitability of the Data Center Hosting Business and its ability to successfully transition into a low-cost cloud services provider and that the Board was not “independent” within the meaning of Nasdaq listing rules.
+Added: On February 27, 2024, the derivative plaintiff filed an amended complaint asserting the same claims as the original complaint.
+Added: On June 5, 2024, following briefing and argument on the defendants’ motion to dismiss the Derivative Lawsuit, the Court entered an order granting the defendants’ motion without prejudice and dismissing all claims against all defendants, including the Company, on the grounds that the plaintiff failed to plead (1) demand futility as to each of plaintiff’s claims or (2) a claim for breach of fiduciary duty.
+Added: The order dismissed all claims against all defendants, including the Company.
+Added: The plaintiff can seek leave to file an amended complaint but to date has not done so.
+Added: The Company is unable to estimate a range of loss, if any, that could result were there to be an adverse final decision in this action.
+Added: If an unfavorable action were to occur, it is possible that the impact could be material to the Company’s results of operations in the period(s) in which any such outcome becomes probable and estimable.
There are no other pending lawsuits that could reasonably be expected to have a material adverse effect on the results of the Company’s consolidated operations.
+Added: As of the date of this filing, there have been no material changes to the risk factors associated with our business previously disclosed in the “Risk Factors” section in Part I, Item 1A, of our Annual Report on 2025 Form 10-K for the fiscal year ended May 31, 2025.
+Added: Unregistered Sales of Equity Securities and Use of Proceeds
+Added: Defaults Upon Senior Securities
+Added: Not applicable.
+Added: Mine Safety Disclosures
+Added: Not applicable.
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.