Legal Proceedings.
−Removed: From time to time, the Company is a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business.
−Removed: When the Company becomes aware of a claim or potential claim, it assesses the likelihood of any loss or exposure.
−Removed: In accordance with authoritative guidance, the Company records loss contingencies in its financial statements only for matters in which losses are probable and can be reasonably estimated.
−Removed: Where a range of loss can be reasonably estimated with no best estimate in the range, the Company records the minimum estimated liability.
−Removed: If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the specific claim if the likelihood of a potential loss is reasonably possible and the amount involved is material.
−Removed: The Company continuously assesses the potential liability related to the Company’s pending litigation and revises its estimates when additional information becomes available.
+Added: From time to time, we are a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business.
With respect to our outstanding legal matters, we believe that the amount or estimable range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows.
−Removed: However, the outcome of litigation is inherently uncertain.
−Removed: Therefore, if one or more of these ordinary-course legal matters were resolved against us for amounts in excess of management's expectations, our results of operations and financial condition, including in a particular reporting period, could be materially adversely affected.
−Removed: As previously disclosed, in March 2020, a short-seller report suggested certain improprieties in the Company’s operations.
−Removed: These allegations became the subject of two putative stockholder class actions filed on or after March 29, 2020 in the United States District Court for the Central District of California generally alleging the Company and certain of its current and former directors and officers violated the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making allegedly false and misleading statements (the “Class Actions”).
−Removed: After the second putative stockholder class action was filed, the Class Actions were consolidated.
−Removed: On January 19, 2021, the Company and the director and officer defendants filed a Motion to Dismiss the consolidated Class Actions.
−Removed: On August 25, 2021, the Court granted the Motion to Dismiss with leave to amend the complaint.
−Removed: The Plaintiff elected not to amend his complaint, and the Court entered Judgment in favor of the Company and the director and officer defendants on September 20, 2021.
−Removed: The Court’s decision was not appealed, and the Class Actions are now closed.
−Removed: The Company was likewise named a nominal defendant and certain of the Company's current and former directors and officers were named as defendants in a shareholder derivative lawsuit filed on June 15, 2020, in the United States District Court for the Central District of California.
−Removed: The complaint makes similar allegations as the Class Actions and alleges violations of Sections 10(b), 14(a), and 20(a) of the Securities Exchange Act of 1934, breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets.
−Removed: A second virtually identical shareholder derivative lawsuit was filed on August 21, 2020 in the United States District Court for the District of Delaware.
−Removed: On November 19, 2020, the District Court for the District of Delaware transferred the second-filed derivative lawsuit to the District Court for the Central District of California.
−Removed: The derivative lawsuits were stayed pending the deadline to file a notice of appeal in the Class Actions.
−Removed: The Company intends to vigorously defend the derivative lawsuits.
−Removed: See, Part I, Item 1, Note 18 - Subsequent Events.
−Removed: In response to the allegations in the March 2020 short-seller report, the Company's Board of Directors appointed a Special Committee of Independent Directors to conduct an internal independent investigation with the assistance of counsel (the “Special Committee”).
−Removed: In addition, the SEC initiated a formal, non-public investigation of the Company, and the SEC informally requested, and later issued a subpoena for, documents and other information.
−Removed: The subpoena relates to but is not necessarily limited to the matters identified in the Class Actions.
−Removed: The Special Committee and the Company are cooperating with the SEC.
−Removed: The SEC and the Special Committee investigations are ongoing.
−Removed: There have been no changes to the status of these proceedings as described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
−Removed: Refer to Independent Investigation Update in Note 1.
−Removed: While the Special Committee has reached no final conclusions in conjunction with its investigation, it has made a number of recommendations to management regarding improvements to Company operations and structure, including but not limited to its dealings with related parties.
−Removed: The Company has also instituted structural changes including the retirement of the former Co-Chief Executive Officer and Chairman of the Board.
−Removed: The Company now has an independent Chairman of the Board.
−Removed: In addition, the Company hired an in-house General Counsel and Chief Compliance Officer, who reports to the Chief Executive Officer and the Chairman of the Board.
+Added: For information relating to legal proceedings, see Note 15 - Commitments and Contingencies in our consolidated financial statements.
+Added: Risk Factors.
+Added: There have been no material changes from the risk factors that we believe are material to our business, results of operations, and financial condition from those disclosed in Part I, Item 1A — “Risk Factors" of the Annual Report on Form 10-K for the year ended December 31, 2021.
+Added: Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities.
+Added: Defaults Upon Senior Securities.
+Added: Mine Safety Disclosures.
+Added: Not applicable.
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.