Item 3. Legal Proceedings
Item 3. LEGAL PROCEEDINGS
On or about April 13, 2020, Ian Patterson, the
Chief Operations Officer of AVX resigned from his position. On May 5, 2020, Mr. Patterson filed an action in the Superior Court for the
County of Los Angeles, State of California, against the company, et al. The complaint alleges claims including discrimination, wrongful
termination, retaliation and various other provisions of the California Labor Code, and various other claims under California state law.
The complaint seeks unspecified economic and non-economic losses, as well as attorneys’ fees. We have conducted written discovery,
depositions, and expert discovery. We have a motion for summary judgment set to be heard on June 17, 2025. Trial for this matter is set
for August 6, 2025. AVX intends to vigorously contest this matter. Further, AVX disputes that the other defendants are proper parties
to the litigation. However, litigation and investigations are inherently uncertain, but the outcome could have a material impact on the
Company.
Similarly, on or about April 14, 2020, Devesa
Sarria, the Sales and Marketing Director, was terminated. On May 13, 2020, she filed an action in the Superior Court for the County of
Los Angeles, State of California. The Complaint alleges claims including discrimination, wrongful termination, retaliation and various
other provisions of the California Labor Code, and various other claims under California state law. The complaint seeks unspecified economic
and non-economic losses, as well as attorneys’ fees. We have conducted written discovery, depositions, and expert discovery. Trial
for this matter is set for August 13, 2025. AVX intends to vigorously contest this matter. Further, AVX disputes that the other defendants
are proper parties to the litigation. However, litigation and investigations are inherently uncertain, but the outcome could have a material
impact on the Company.
On August 26, 2024, a former software engineer
filed an action against Perfecular Inc., a wholly owned subsidiary of the Company, in the Superior Court for the County of San Bernardino,
State of California alleging wrongful termination and other violations of the California Labor Code. The complaint seeks unspecified economic
and non-economic losses, as well as attorneys’ fees. The Company is investigating and intends to vigorously defend itself in the
foregoing matters. The case has currently been stayed until a status conference on September 17, 2025, which is when the expected trial
date will be set. However, litigation and investigations are inherently uncertain. The Company does possess EPLI insurance, and the legal
team as selected by the insurance company is currently handling the matter. The Company vigorously disputes these allegations.
On October 28, 2024, MGR Real Estate, Inc. a California
corporation, filed an action in the Superior Court of the State of California, County of San Bernardino, against the Company. The complaint
alleges a variety of things including breach of contract and declaratory relief. The complaint is in connection with a listing agreement
executed between the Company and the plaintiff, which plaintiff alleges gave it exclusive rights to list and sale the property located
at 2311 E. Locust St., Ontario, CA 91761 (the “Premises”). The complaint seeks damages in a minimum amount of $373,025, plus
interest at a rate of 10% per annum. The Company is negotiating a resolution and if such resolution falls through then the Company intends
to contest this matter. However, since litigation and investigations are inherently uncertain, the outcome may have a material impact
on the Company.
Item 4. MINE SAFETY DISCLOSURES
Not applicable to our Company.
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PART II