Item 3. Legal Proceedings
Item
3.
Legal
Proceedings.
On
September 7, 2021, the Company was served with a demand for mediation and potential arbitration by Gregory Sanders (“Plaintiff”),
a previous employee of the Company. The demand claims Mr. Sanders had an employment agreement with the Company entitling him to certain
compensation payments under the contract. No conclusion was met during mediation which occurred in the fourth quarter of 2021. On October
25, 2023, there was a hearing on Plaintiff’s motion for summary judgement. Plaintiff asserted 3 motions, all of which were denied
by the court, as ordered on November 1, 2023. Plaintiff withdrew his action against the Company on January 11, 2024 and the court so
ordered on the same date.
On
November 8, 2023, the Company was served with a demand for payments under various agreements with the plaintiffs. The Plaintiffs are
Ric Halden, Randy Moseley, Tunstall Canyon Group, LLC (“Tunstall Canyon”) and Chisos Equity Consultants, LLC (“Chisos”).
Ric Halden and Randy Moseley were founders of the Company and served as officers and directors of the Company until 2017, when each of
them resigned all positions with the Company. The Company believes that Tunstall Canyon and Chisos are majority-owned by Ric Halden.
The Company has accrued liabilities to Ric Halden, Randy Moseley and Tunstall Canyon, which are all included in the liabilities reflected
on the accompanying consolidated balance sheet. The court set an original trial date for November 25, 2024. The Plaintiffs and the Company
petitioned the Court for a new trial date, which was granted. The new trial date is May 26, 2025. The case is currently in its discovery
phase.
The
Plaintiffs, Ric Halden, Randy Moseley, Tunstall Canyon and Chisos, filed a Traditional Motion for Partial Summary Judgement , or in the Alternative, Traditional Motion for Partial Summary Judgement
as to Liability Only. The court has set a hearing on this motion for March 26, 2025.
Item
4.
Mine
Safety Disclosures.
Not
applicable.
- 13 -
PART
II
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.