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Item 3. Legal Proceedings

2023-11-13 compared with 2022-11-02 · 34 added, 22 removed, 36 unchanged (61% of the section changed)

LEGAL PROCEEDINGS

From time to time, we may become involved in

various lawsuits and legal proceedings which arise in the ordinary course of business.

From time to time, we may become involved in various

lawsuits and legal proceedings which arise in the ordinary course of business.

However, litigation is subject to inherent uncertainties

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Except for the litigation disclosed

below, we are not currently a party to any legal or arbitration proceeding the outcome of which, if ‘determined adversely to us, would

individually or in the aggregate be reasonably expected to have a material adverse effect on our business, operating results, cash flows,

or financial condition.

below, we are not currently a party to any legal or arbitration proceeding the outcome of which, if ‘determined adversely to us,

would individually or in the aggregate be reasonably expected to have a material adverse effect on our business, operating results, cash

flows, or financial condition.

On May 14, 2020, Boustead filed a lawsuit against

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Boustead of compensation that Boustead would otherwise have been entitled to receive under its exclusive agreement with LGC.

Boustead is attempting to recover from the Company an amount equal to a percentage of the value of the transaction it conducted with

Boustead is attempting to recover from the Company an amount equal to a percentage of the value of the transaction it conducted with LGC.

Boustead’s Complaint alleged four causes

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breach of the implied covenant of good faith and fair dealing;

interference with business relationships and quantum meruit.

tortious interference

with business relationships and quantum meruit.

On October 6, 2020, we filed a motion to dismiss

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opted to amend its complaint and filed the amended complaint on November 10, 2020.

Boustead’s first amended complaint asserted

the same four causes of action against LGC and us as its original complaint.

We filed another motion to dismiss Boustead’s amended

complaint on December 8, 2020.

Boustead’s first amended complaint asserted the

same four causes of action against LGC and us as its original complaint.

We filed another motion to dismiss Boustead’s amended complaint

on December 8, 2020.

On August 25, 2021, the United States District

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filed its opposition on February 1, 2022 and the Company replied on February 8, 2022.

On July 6, 2022, the Court denied our motion

to dismiss the second amended complaint.

Thereafter, on August 3, 2022, the Company filed a motion to compel arbitration of Boustead’s

claims in California.

Briefing on the Company’s motion to compel concluded on August 23, 2022.

The Court has yet to rule on that

Boustead is also seeking a default judgment against LGC and recently filed an order to show cause for default judgment against

The Court has not ruled on Boustead’s request for entry of default judgment against LGC.

In sum, the Boustead litigation is currently

in the pleadings stage.

Our management believes it is premature to assess and predict the outcome of this pending litigation.

On July 6, 2022, the Court

denied our motion to dismiss the second amended complaint.

Thereafter, on August 3, 2022, the Company filed a motion to compel arbitration.

Briefing on the Company’s motion to compel concluded on August 23, 2022 Since the agreement between ATIF and Boustead contains a

valid arbitration clause that applies to Boustead’s breach of contract claim, and the parties have not engaged in discovery, on

February 14, 2023, the Court ordered that ATIF’s motion to compel arbitration is granted and this case is stayed pending arbitration.

On March 10, 2023, Boustead,

filed Demand for Arbitration against ATIF (the Respondent) before JAMS in California and JAMS case Ref.

is 5220002783.

2023, ATIF filed its answer to deny Boustead’s Demand for Arbitration, which was unsuccessful and the arbitration process was initiated.

The arbitrator ordered a motion to be filed by Boustead for a determination of contact interpretation, prior to extensive discovery into

issues such as the alleged merits and damages, and to determine whether the contract interpretation should allow the matter to further

Boustead had filed the Motion for Contract Interpretation Determination.

ATIF filed its opposition to that Motion on October

The hearing on the motion was held on November 8, 2023, during which

the arbitrator extended the hearing to February 29, 2024.

The arbitrator also established December 15, 2023, as the deadline for Boustead

to submit its reply regarding the contract interpretation issues raised by the Company.

Simultaneously, the Company was granted until

February 12, 2024, to present its response brief.

Our management believes it

is premature to assess and predict the outcome of this pending arbitration.

MINE SAFETY DISCLOSURES

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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.

What changed 10-K

Item 3. Legal Proceedings