What changed in this filing

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Item 3. Legal Proceedings

2021-03-10 compared with 2020-03-13 · 31 added, 24 removed, 1 unchanged (98% of the section changed)

LEGAL PROCEEDINGS

On August 2, 2019, the Company filed suit

in Jefferson Circuit Court, Kentucky, against a supplier of Allure for breach of contract, breach of warranty, and negligence

with respect to equipment installations performed by such supplier for an Allure customer.

On October 10, 2019, the Allure customer that is the basis of

our claim above sent a demand to the Company for payment of $3,200 as settlement for an alleged breach of contract related to hardware

failures of equipment installations performed by Allure between November 2017 and August 2018, before our acquisition of Allure.

The suits filed by and against Allure were consolidated in the Jefferson Circuit Court, Kentucky in January 2020.

These consolidated

cases remain in the early stages of litigation and, as a result, the outcome of each and the allocation of liability, if any, remain

unclear, so the Company is unable to reasonably estimate the possible liability, recovery, or range of magnitude for either the

liability or recovery, if any, at the time of this filing.

The Company has notified its insurance company of potential

claims and continues to evaluate both the claim made by the customer and potential avenues for recovery against third parties should

the customer prevail.

On February 20, 2020, the Company and Allure filed a demand

for arbitration against Seller (Christie Digital Systems, Inc.) for breach of contract, indemnification, and fraudulent misrepresentation

under the Purchase Agreement.

This demand included a claim for the right to offset the amounts owing under the Amended and Restated

Seller Note due February 20, 2020.

On February 27, 2020, Seller sent the Company a notice of breach for failure to pay the Amended

and Restated Seller Note on the maturity date of February 20, 2020 and demanding immediate payment.

We continue to assert the offset

right under the Purchase Agreement and Amended and Reseller Note.

regarding legal proceeding can be found in Note 10 Commitments and Contingencies to the Company’s Consolidated Financial

SAFETY DISCLOSURES

in Jefferson Circuit Court, Kentucky, against a supplier of Allure for breach of contract, breach of warranty, and negligence with

respect to equipment installations performed by such supplier for an Allure customer.

On October 10, 2019, the Allure customer

that is the basis of our claim above sent a demand to the Company for payment of $3,200 as settlement for an alleged breach of

contract related to hardware failures of equipment installations performed by Allure between November 2017 and August 2018, before

our acquisition of Allure.

The suits filed by and against Allure were consolidated in the Jefferson Circuit Court, Kentucky in

January 2020.

These consolidated cases remain in the early stages of litigation and, as a result, the outcome of each and the allocation

of liability, if any, remain unclear, so the Company is unable to reasonably estimate the possible liability, recovery, or range

of magnitude for either the liability or recovery, if any, at the time of this filing.

The Company has notified its insurance company

of potential claims and continues to evaluate both the claim made by the customer and potential avenues for recovery against third

parties should the customer prevail.

On February 20, 2020, the Company and Allure

filed a demand for arbitration against Seller (Christie Digital Systems, Inc.) for breach of contract, indemnification, and fraudulent

misrepresentation under the Purchase Agreement executed in connection with our acquisition of Allure.

This demand includes a claim

for the right to offset the amounts owing under the Amended and Restated Seller Note due February 20, 2020.

On February 27, 2020,

Seller sent the Company a notice of breach for failure to pay the Amended and Restated Seller Note on the maturity date of February

20, 2020 and demanding immediate payment.

In December 2020, the parties entered a pre-arbitration mediation process in an effort

to settle the litigation, which remains ongoing as of the date of this report.

We continue to assert the offset right under the

Purchase Agreement and Amended and Reseller Note.

Information regarding legal proceeding can

be found in Note 9 Commitments and Contingencies to the Company’s Consolidated Financial Statements.

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