Item 1. Legal Proceedings
ITEM 1. LEGAL PROCEEDINGS
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 sought unspecified economic
and non-economic losses, as well as attorneys’ fees. On April 25, 2025, the Company and the software engineer entered into a confidential
settlement agreement which concluded this matter and releases all claims against the Company.
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 and CFO Irving
Kau. The complaint alleged a variety of items including breach of contract and declaratory relief. On April 10, 2025, the Company, Mr.
Kau, and MGR Real Estate, Inc. entered into a confidential settlement agreement which concluded this matter and releases all claims against
the Company. The minimal impact of this settlement has been accounted for in these financial statements.
On May 13, 2020, a former Chief Operation Officer
(COO) and Sales and Marketing Director filed an action against AVX Design & Integration, Inc., a wholly owned subsidiary of the Company,
in the Superior Court for the County of Los Angeles, State of California alleging wrongful termination and other violations of the California
Labor Code. The complaint sought unspecified economic and non-economic losses, as well as attorneys’ fees. On August 29, 2025, the
Company and former COO and Sales and Marketing Director into a confidential settlement agreement which concluded this matter and releases
all claims against the Company. This agreed upon settlement, though not finally executed as of yet, has been accounted for in these financial
statements.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule
12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
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.