What changed in this filing

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Item 3. Legal Proceedings

2026-05-28 compared with 2025-03-24 · 32 added, 28 removed, 12 unchanged (83% of the section changed)

Legal Proceedings.

March 8, 2019, Jie Yuan (the “Jie Action”) filed a putative shareholder derivative lawsuit purportedly on behalf of

Nova Lifestyle, Inc.

On March 8, 2019, Jie Yuan

(the “Jie Action”) filed a putative shareholder derivative lawsuit purportedly on behalf of Nova Lifestyle, Inc.

NVFY, the “Nova LifeStyle”) in the U.S.

District Court for the Central District of California,

against Nova LifeStyle’s former and current CEOs and CFOs (Thanh H.

Lam, Ya Ming Wong, Jeffery Chuang and Yuen Ching Ho) and directors

(Charlie Huy La, Bin Liu, Umesh Patel, and Min Su) and vice president (Steven Qiang Liu) (collectively, the “Defendants”)

seeking to recover any losses Nova LifeStyle sustains as a result of alleged securities violations outlined in a Seeking Alpha blog and

a certain securities class action case filed by George Barney and others (the “Barney Action”) in the same court on December 28,

Specifically,

the derivative lawsuit alleges that the Defendants caused Nova LifeStyle to make the alleged false and/or misleading statements giving

rise to the putative securities class action.

The Plaintiff also alleges that President and CEO Lam engaged in self-dealing transactions

by leasing her property to Diamond Bar, a Nova LifeStyle subsidiary, and asserts that Lam, former CEO and director Ya Ming Wong, former

CFO and director Yuen Ching Ho, and director Umesh Patel sold securities during the period of time when the alleged false and/or misleading

statements were made “with knowledge of material non-public information.”

May 15, 2019, Wilton Samuels (the “Samuels Action”) also filed a putative derivative complaint purportedly on behalf

of Nova Lifestyle against the same current and former directors and officers named in the Jie Action other than Steven Qiang Liu in the

Samuels repeats the allegations of the Complaint in the Jie Action.

Additionally, Samuels claims that, in announcing its

change of auditing firms in September 2016, Nova Lifestyle asserted that this change was made because its existing auditor ceased auditing

public companies subject to regulation in the United States without disclosing that its new auditing firm was created in a merger of

three accounting firms, including a firm whose registration was revoked by the Public Company Accounting Oversight Board.

claims that Nova Lifestyle redeemed its stock in reliance upon the same purported fraudulent recognition of revenues claimed in the putative

class action.

He purports to state direct claims under Sections 10(b) and 20 of the Exchange Act and SEC Rule 10b-5.

the request of the Defendants, the court in the Jie Action and the Samuels Action agreed, respectively, in April 2020 and June 2020 to

stay the proceedings until the Barney Action is resolved.

District Court for the Central District of California, against Nova LifeStyle’s

former and current CEOs and CFOs (Thanh H.

Lam, Ya Ming Wong, Jeffery Chuang and Yuen Ching Ho) and directors (Charlie Huy La, Bin Liu,

Umesh Patel, and Min Su) and vice president (Steven Qiang Liu) (collectively, the “Defendants”) seeking to recover any losses

Nova LifeStyle sustains as a result of alleged securities violations outlined in a Seeking Alpha blog and a certain securities class action

case filed by George Barney and others (the “Barney Action”) in the same court on December 28, 2018.

Specifically, the derivative

lawsuit alleges that the Defendants caused Nova LifeStyle to make the alleged false and/or misleading statements giving rise to the putative

securities class action.

The Plaintiff also alleges that President and CEO Lam engaged in self-dealing transactions by leasing her property

to Diamond Bar, a Nova LifeStyle subsidiary, and asserts that Lam, former CEO and director Ya Ming Wong, former CFO and director Yuen

Ching Ho, and director Umesh Patel sold securities during the period of time when the alleged false and/or misleading statements were

made “with knowledge of material non-public information.”

On May 15, 2019, Wilton Samuels

(the “Samuels Action”) also filed a putative derivative complaint purportedly on behalf of Nova Lifestyle against the same

current and former directors and officers named in the Jie Action other than Steven Qiang Liu in the same court.

Samuels repeats the allegations

of the Complaint in the Jie Action.

Additionally, Samuels claims that, in announcing its change of auditing firms in September 2016, Nova

Lifestyle asserted that this change was made because its existing auditor ceased auditing public companies subject to regulation in the

United States without disclosing that its new auditing firm was created in a merger of three accounting firms, including a firm whose

registration was revoked by the Public Company Accounting Oversight Board.

Samuels also claims that Nova Lifestyle redeemed its stock

in reliance upon the same purported fraudulent recognition of revenues claimed in the putative class action.

He purports to state direct

claims under Sections 10(b) and 20 of the Exchange Act and SEC Rule 10b-5.

Upon the request of the Defendants,

the court in the Jie Action and the Samuels Action agreed, respectively, in April 2020 and June 2020 to stay the proceedings until the

Barney Action is resolved.

The Barney Action was settled

3 unchanged sentences

lift the stay in the case, and set a new briefing schedule for the parties to move forward with the case.

The consolidated case remains

Other than the foregoing

3 unchanged sentences

Mine Safety Disclosures.

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.

What changed 10-K

Item 3. Legal Proceedings