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Item 3. Legal Proceedings

2024-03-28 compared with 2023-03-29 · 25 added, 60 removed, 8 unchanged (91% of the section changed)

4 unchanged sentences

Insurance Underwriters Inc.

filed suit against us in federal court in Delaware seeking a declaratory judgment that there was no insurance

coverage for any settlement, judgment, or defense costs in the class and derivative litigation, that the monies totaling approximately

$1 million it paid to the Company in connection with the SEC investigation were not covered by insurance, and for recoupment of the monies

already paid.

We have retained counsel to defend us which has filed an answer to the complaint denying its material allegations, as well

as a counterclaim against Liberty for breach of contract, declaratory judgment, bad faith and violation of the Washington State Consumer

Protection Act, alleging among other things that Liberty wrongfully denied the Company’s claims for coverage of the class and derivative

litigations, and seeking money damages.

(“Liberty”) filed suit against us in federal court in Delaware seeking a declaratory judgment

that there was no insurance coverage for any settlement, judgment, or defense costs in the class and derivative litigation, that the

monies totaling approximately $1 million it paid to the Company in connection with the SEC investigation were not covered by insurance,

and for recoupment of the monies already paid.

We had retained counsel to defend us which had filed an answer to the complaint denying

its material allegations, as well as a counterclaim against Liberty for breach of contract, declaratory judgment, bad faith and violation

of the Washington State Consumer Protection Act, alleging among other things that Liberty wrongfully denied the Company’s claims

for coverage of the class and derivative litigations, and seeking money damages.

Liberty Insurance Underwriters Inc.

filed suit against us in federal court in Delaware seeking

a declaratory judgment that there was no insurance coverage for any settlement, judgment, or defense costs in the class and derivative

litigation, that the monies totaling approximately $1 million it paid to the Company in connection with the SEC investigation were not

covered by insurance, and for recoupment of the monies already paid.

On June 7, 2022, the court filed a Stipulation and Order for Entry

of Judgment in the amount of $1,359,063.72 in favor of Liberty (the “Judgment”) following summary judgment granted by the

court to Liberty on all but one of the matters at issue in the case.

filed suit against

us in federal court in Delaware seeking a declaratory judgment that there was no insurance coverage for any settlement, judgment, or

defense costs in the class and derivative litigation, that the monies totaling approximately $1 million it paid to the Company in connection

with the SEC investigation were not covered by insurance, and for recoupment of the monies already paid.

On June 7, 2022, the court filed

a Stipulation and Order for Entry of Judgment in the amount of $1,359,064 in favor of Liberty (the “Judgment”) following

summary judgment granted by the court to Liberty on all but one of the matters at issue in the case.

The Company filed an appeal in July

Pending the outcome of

the appeal, the Company paid $1.6 million into the registry of the court which stayed execution of the Judgment.

The United States Court of Appeals for the Third Circuit (the “Third Circuit”) held oral argument on

the appeal on March 8, 2023.

As of the date of this Report, the Third Circuit has not issued a ruling on the appeal.

November 2017, Lee Pederson, a former Biozone lawyer, filed a lawsuit in the U.S.

District Court in Minnesota against co-defendants the

Phillip Frost, OPKO Health, Inc.

and Brian Keller alleging that defendants engaged in wrongful conduct related to Biozone,

including causing Biozone to enter into an allegedly improper licensing agreement and engaged in alleged market manipulation (“Pederson

On September 13, 2018, the United States District Court granted the Company and its co-defendants’ motion to dismiss

Pederson’s amended complaint in Pederson I for lack of personal jurisdiction in Minnesota.

On October 11, 2018, Pederson filed

a notice of appeal with the United States Court of Appeals for the Eighth Circuit.

The plaintiff’s appeal was denied and the dismissal

of Pederson I affirmed in March 2020.

Meanwhile, in July 2019, Lee Pederson had filed another lawsuit in the U.S.

District Court in Minnesota

against co-defendants the Company, Dr.

Frost, and Daniel Fisher (“Pederson II”).

In his complaint in Pederson II, Pederson

alleges tortious interference by the Company and Dr.

Frost with an alleged collaboration agreement between Mr.

Pederson and Mr.

In Pederson II, Mr.

Pederson seeks damages in the amount of $800,000 or such other amount as may be determined at trial.

had previously been stayed by the court, pending disposition of Pederson I.

With that first lawsuit having been dismissed and appeal

denied, the stay was lifted in Pederson II, and the Company and all other defendants in that case filed Motions to Dismiss the (then

amended) complaint.

On November 19, 2020 the Magistrate Judge recommended dismissal of Pederson II, and further recommended that Pederson

be restricted from filing any other actions in the District of Minnesota against defendants on the same or similar allegations as those

in Pederson II, and on January 4, 2021 the District Court Judge adopted those recommendations and ordered dismissal of Pederson II.

February 1, 2021 Pederson filed a Notice of Appeal from the order of dismissal of Pederson II in the Eighth Circuit, and on December

29, 2021 the Eighth Circuit affirmed the decision of the District Court.

Thereafter, on or about January 11, 2022 Pederson sought via

petition, re-hearing en banc by the Eighth Circuit.

On October 3, 2022, the U.S.

Supreme Court

denied Pederson’s petition for a writ of certiorari.

the Company intends to defend itself vigorously from the claims in the aforementioned disputes, it is unable to predict the outcome of

these legal proceedings.

Any potential loss as a result of these legal proceedings cannot be reasonably estimated.

As a result, the Company

has not recorded a loss contingency for any of the aforementioned claims.

On March 29, 2023, the Third Circuit ruled in favor of the Company on the appeal, thereby vacating the trial court’s prior

grant of summary judgment in favor of Liberty.

As a result of this ruling, the case has been remanded to the District Court for trial

on the merits of the Company’s coverage claims for defense and settlement costs.

The Court had ordered the return of the $1.6 million.

On August 8, 2023, the Company received $1.6 million as refunded by the registry of the court.

On November 16, 2023, prior to commencement

of a new trial which had been scheduled for December 4, 2023, the parties entered into a settlement agreement pursuant to which Liberty

paid the Company $1 million and each party released the other from its respective claims and rights arising from the matter.

no further litigation with Liberty following this settlement.

Mine Safety Disclosures

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