Item 3. Legal Proceedings
ITEM 3. LEGAL PROCEEDINGS
From time to time, we are
subject to ordinary routine litigation incidental to our normal business operations. We are not currently a party to, and our property
is not subject to, any material legal proceedings, except as set forth below.
On October 25, 2017, Genexosome
entered into and closed a Stock Purchase Agreement with Beijing Genexosome and Yu Zhou, MD, PhD, the sole shareholder of Beijing
Genexosome, pursuant to which Genexosome acquired all of the issued and outstanding securities of Beijing Genexosome in consideration
of a cash payment in the amount of $450,000 of which $100,000 is still owed. Further, on October 25, 2017, Genexosome entered into
and closed an Asset Purchase Agreement with Dr. Zhou, pursuant to which the Company acquired all assets, including all intellectual
property and the exosome separation system, held by Dr. Zhou pertaining to the business of researching, developing and commercializing
exosome technologies. In consideration of the assets, Genexosome paid Dr. Zhou $876,087 in cash, transferred 500,000 shares of
common stock of the Company to Dr. Zhou and issued Dr. Zhou 400 shares of common stock of Genexosome. Further, The Company
had not been able to realize the financial projections provided by Dr. Zhou for the sale of the separation systems which were provided
to the Company at the time of the acquisition and the Company has decided to impair the intangible asset associated with this acquisition
to zero. Dr. Zhou was terminated as Co-CEO of Genexosome on August 14, 2019. Further, on October 28, 2019, Research
Institute at Nationwide Children’s Hospital (“Research Institute”) filed a Complaint in the United States District
Court for the Southern District of Ohio Eastern Division against Dr. Zhou, Li Chen, the Company and Genexosome with various claims
against the Company and Genexosome including misappropriation of trade secrets in violation of the Defend Trade Secrets Act of
2016 and violation of Ohio Uniform Trade Secrets Act. Research Institute is seeking monetary damages, injunctive relief,
exemplary damages, injunctive relief and other equitable relief. The case number is 2:19-cv-4574. The Company intends to vigorously
defend against this action and pursue all available legal remedies. While there can be no assurances, the Company believes it
has substantial legal and factual defenses to the Research Institute’s claims.
ITEM 4. MINE SAFETY DISCLOSURES
None.
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PART II
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.