Arena Group Holdings, Inc. 10-K

Item 3. Legal Proceedings From time to time, we may be subject to claims and litigation arising in the ordinary course of business. The outcome of any litigation is inherently uncertain. Based on the Company’s current knowledge it believes that the final outcome of the matters discussed below will not likely, individually or in the aggregate, have a material adverse effect on its business, financial position, results of operations or cash flows; however, in light of the uncertainties involved in such matters, there can be no assurance that the outcome of each case or the costs of litigation, regardless of outcome, will not have a material adverse effect on the Company’s business. On March 21, 2024, the former CEO and Chairman of the Company’s Board of Directors filed an action against the Company, members of its then-current Board of Directors and Simplify, alleging claims for retaliation, breach of contract, wrongful termination and age discrimination, among other things, in the Superior Court of the State of California seeking damages in an amount of $20.0 million. The Company and Board member Carlo Zola filed a Cross Complaint and Answer on June 20, 2024. Apart from Mr. Zola, the remaining individual Board member defendants successfully filed a Motion to Quash Service of Summons based on lack of jurisdiction, and they have been dismissed from the case. Simplify was also dismissed from the case. On September 13, 2024, the former CEO and Chairman filed an Answer to the Company’s Cross Complaint. On May 15, 2025, the former CEO and Chairman of the Company’s Board of Directors filed a First Amended Complaint, which adds a new cause of action for alleged breach of contract based upon the Company’s refusal to advance certain attorneys’ fees to him. On May 28, 2025, the Company filed an Answer to the First Amended Complaint. The Company intends to vigorously defend itself against the allegations made in this lawsuit. Item 4. Mine Safety Disclosure Not applicable. Part II.