Item 1. Legal Proceedings
ITEM
1: LEGAL PROCEEDINGS
On
April 23, 2026, Dermata was served with a complaint filed by Villani, Inc. (“Villani”) in the U.S. District Court for
the Central District of California (“Lawsuit”). The Lawsuit alleges the Company made false or misleading advertising statements
under the Lanham Act 15 USC §1125, breach of contract, and conversion, and seeks injunctive relief. In connection with the Lawsuit,
on April 26, 2026, Villani filed a motion seeking a temporary restraining order (“TRO”) and a preliminary injunction. The
Company denies the allegations in the Lawsuit and is vigorously opposing Villani’s motion.
On
May 6, 2026, the court denied the TRO in part as related to Villani’s breach of contract and conversion claims, and granted the
TRO in part as related to certain of Villani’s false or misleading advertising claims, which imposes certain temporary restrictions
on specific statements the Company can make, pending further proceedings. The preliminary injunction, if granted, could extend certain
of the above restrictions. A hearing on the preliminary injunction is scheduled for July 14, 2026.
At
this time, the Company is unable to reasonably estimate the likelihood of an unfavorable outcome or the amount or range of potential
loss, if any, that may result from this matter. The TRO and any potential preliminary injunction could have an adverse impact on the
Company’s operations, financial condition, and results of operations, particularly if the restrictions remain in place for an extended
period or are expanded in scope.
The
Company will continue to monitor developments in this matter and will adjust its disclosures as appropriate.
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.