What changed in this filing

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Item 1. Legal Proceedings

2024-08-16 compared with 2024-05-20 · 67 added, 0 removed, 30 unchanged (69% of the section changed)

18 unchanged sentences

of a loss related to such matters.

Arena Litigation

Arena Investors, LP (ROI Litigation)

On May 30, 2024, Arena Investors,

LP (“Arena”), in its capacity as collateral agent for five noteholders, filed a filed a Complaint (the “ROI Complaint”)

in the Supreme Court of the State of New York, County of New York against the Company and ROI, in action captioned Arena Investors,

Ault Alliance, Inc.

and RiskOn International, Inc.

The ROI Complaint asserts

a cause of action for breach of contract against the Company based on a Guaranty, dated April 27, 2023, and entered into, amongst others,

the Company and Arena, and seeks damages in the amount of in excess of $3.75 million, plus interest, attorneys’ fees, costs, expenses,

and disbursements.

The ROI Complaint also asserts

a cause of action for breach of contract against ROI based on an alleged breach of that certain Security Agreement, dated April 27, 2023,

and entered into among ROI and Arena.

In connection with this cause of action, Arena seeks, among other things, costs and expenses from

the Company and ROI.

On July 31, 2024, the Company

and ROI filed a motion to dismiss seeking to partially dismiss the ROI Complaint, as against the Company, and to dismiss the Compliant,

in its entirety, as against ROI.

The deadline for Arena to

file its opposition to the motion to dismiss is September 27, 2024.

Based on the Company’s

assessment of the facts underlying the claims, the uncertainty of litigation, and the preliminary stage of the case, the Company cannot

reasonably estimate the potential loss or range of loss that may result from this action.

Notwithstanding, the Company has recorded the

unpaid portion of the notes.

An unfavorable outcome may have a material adverse effect on the Company’s business, financial condition

and results of operations.

Arena Investors, LP (Gresham Litigation)

On June 6, 2024, Arena, in

its capacity as collateral agent for Arena and Walleye Opportunities Master Fund Ltd.

(“Walleye”), filed a Complaint (the

“Complaint”) in the Supreme Court of the State of New York, County of New York against the Company and GIGA, in action captioned

Arena Investors, LP v.

Gresham Worldwide, Inc.

f/k/a Giga-Tronics Incorporated and Ault Alliance, Inc.

On July 8, 2024, Arena filed

an Amended Complaint (the “Amended Complaint”) in the above-referenced action.

The Amended Complaint asserts a cause

of action against the Company for declaratory and injunctive relief seeking an injunction enjoining the Company, and its agent, affiliates,

servants, and employees from taking actions in breach of that certain Subordination Agreement, dated January 9, 2023, and entered into

among Walleye, Arena, and the Company.

The Amended Complaint also

asserts causes of action for breach of contract against GIGA based on two discrete convertible promissory notes (the “Notes”)

that GIGA entered into with each of Arena and Walleye, as well as a claim for breach duty of good faith and fair dealing, against GIGA,

and seeks, among other things, monetary damages in excess of $4.2 million, with interest thereon, attorneys’ fees, costs, and disbursements.

The Amended Complaint further asserts another cause of action against GIGA for breach of contract seeking declaratory and injunctive relief

based on alleged inspection rights contained in a Security Agreement, dated January 9, 2023 (the “Security Agreement”), and

entered into between the Walleye, Arena, and GIGA, which seeks the issuance of an injunction related to such alleged inspection rights,

plus the costs and out-of-pocket expenses associated with the enforcement of same.

On July 12, 2024, the Court

granted injunctive relief to Arena and ordered GIGA to comply with the inspection rights provision of the Security Agreement by July 17,

On July 19, 2024, Arena voluntarily

discontinued its cause of action for breach duty of good faith and fair dealing claim against GIGA.

On July 29, 2024, the Company

and GIGA filed a motion to dismiss, strike, and for sanctions (the “Motion”), in response to the Amended Complaint, on the

grounds that, amongst other things, the underlying Notes are criminally usurious under New York.

The deadline for Arena to

file its opposition to the Motion is September 19, 2024.

Based on the Company’s

assessment of the facts underlying the claims, the uncertainty of litigation, and the preliminary stage of the case, the Company cannot

reasonably estimate the potential loss or range of loss that may result from this action.

Notwithstanding, the Company has recorded the

unpaid portion of the Notes.

An unfavorable outcome may have a material adverse effect on the Company’s business, financial condition

and results of operations.

Other Litigation Matters

With respect to our other

10 unchanged sentences

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-Q

Item 1. Legal Proceedings