Triller Group Inc. 10-K

ITEM 3. LEGAL PROCEEDINGS From time to time, the Company may be subject to various legal proceedings, investigations, or claims that arise in the ordinary course of our business activities. Except for the proceeding below, the Company is not currently a party to any other legal proceedings the outcome of which, if determined adversely to the Company, would individually or in the aggregate have a material adverse effect on its business, financial condition, and results of operations. From time to time, the Company may be subject to various legal proceedings, investigations, or claims that arise in the ordinary course of our business activities. Except for the proceeding below, the Company is not currently a party to any other legal proceedings the outcome of which, if determined adversely to the Company, would individually or in the aggregate have a material adverse effect on its business, financial condition, and results of operations. Action Case: CACV 1116/2025 (on appeal from HCA702/2018) On March 27, 2018, the writ of summons was issued against AGBA and seven related companies of the former stockholder (the “Defendants”) by the Plaintiff. This action alleged the infringement of certain registered trademarks currently registered under the Plaintiff. In February 2023, the Court granted leave for this action be set down for trial of 13 days. This trial will take place from November 25, 2024 to December 11, 2024. On October 31, 2025, the Court granted judgement in favor of the Plantiff. On November 28, 2025, the Defendants lodged and served the Notice of Appeal (CACV 1116/2025) to the Court of Appeal. Legal counsel of the Company will continue to handle in this matter. At this stage in the proceedings, it is unable to determine the probability of the outcome of the appeal or the range of reasonably possible loss as the Court is in the process of quantifying the amount of damages. Action Case: HCA765/2019 On April 30, 2019, the writ of summons was issued against the Company’s subsidiary, three related companies and the former directors, stockholders and financial consultant by the Plaintiff. This action alleged the deceit and misrepresentation from an inducement of the fund subscription and claimed for compensatory damage of approximately $2 million (equal to HK$17.1million). On April 18, 2024, the court made an order that the plaintiff shall set the case down for trial on or before July 6, 2024 for a 7 days trial before a judge and there shall be a pre-trial review before the trial judge on a date 12 weeks before the trial. The plaintiff and the defendants agreed on a time extension until August 8, 2024 to set the case down for trial. On August 9, 2024, the Court made an order that the case be adjourned to January 14, 2025 for another case management conference. On February 17, 2025, the Company filed an amended defence to the court and the next case management conference is fixed to be heard on January 6, 2026. The case be adjourned to July 21, 2026 for another case management conference and parties can attempt mediation to resolve the dispute before the schedule case management conference. Legal counsel of the Company will continue to handle in this matter. At this stage in the proceedings, it is unable to determine the probability of the outcome of the matter or the range of reasonably possible loss, if any. HCA 2097/2020 and HCA 2098/2020 On December 15, 2020, the writs of summons were issued against the Company and the former consultant by the Plaintiff. This action alleged the misrepresentation and conspiracy causing the loss from the investment in corporate bond and claimed for compensatory damage of approximately $1.7 million. The Company previously made approximately $0.8 million as contingency loss for the year ended December 31, 2021. Parties participated in a mediation held on March 25, 2022 and negotiated for settlement through without prejudice correspondence, no settlement was reached. The pre-trial review is fixed to be heard on January 29, 2026 and the 6-days trial is fixed to be heard from May 14 to 21, 2026. The case is on-going and legal counsel of the Company will continue to handle this matter. As of December 31, 2024, the Company accrued a legal provision of approximately $0.8 million as a liability in the consolidated balance sheets. Sony Music Entertainment On August 29, 2022, Sony Music Entertainment, Sony Music Entertainment U.S. Latin LLC, Arista Records LLC, Records Label, LLC and Zomba Recording LLC, or collectively, the Plaintiffs, filed a complaint in the United States District Court for the Southern District of New York captioned Sony Music Entertainment, et al. v. Triller, Inc., Case No. 1:22-cv-07380-PKC. On September 22, 2022, Plaintiffs filed a First Amended Complaint or the Complaint, against we alleging claims for breach of contract, copyright infringement pursuant to 17 U.S.C. § 1401, contributory copyright infringement, and vicarious copyright infringement. On May 16, 2023, the court entered partial final judgment in favor of Plaintiffs on Plaintiffs’ breach of contract claim and ordered the Company to pay Plaintiffs $4.6 million. Thereafter, the Company and the Plaintiffs entered into a Confidential Settlement Agreement dated July 21, 2023 to resolve Plaintiffs’ remaining claims and provide for an agreed plan for payment of the judgment, pursuant to which we agreed to pay an additional sum of money to Plaintiffs and, upon receipt by Plaintiffs of certain payments under the Agreement, Plaintiffs agreed to release claims arising under the Content Distribution Agreement, effective September 1, 2016, between the parties and this action. On May 22, 2024, Plaintiff filed a lawsuit against Triller Platform Co., Triller Corp., and Triller Hold Co LLC in New York for breach of settlement agreement. Though we have not fulfilled all of our payment obligations under the Agreement to date, we maintain an ongoing dialogue with Plaintiffs and make periodic progress payments when available. As of October 15, 2024 and December 31, 2024, we have recorded liabilities of $3.6 million for the unpaid amount owed. 93 Sony Music Publishing Europe Limited (SOLAR) We have assumed the liabilities of Triller Corp, including the legal contingency accrual stemming from the complaint filed by SOLAR in the London, United Kingdom Circuit Common Court alleging claims of songwriter/producer music publishing rights infringement. A default judgement for £3.8 million was ruled in SOLAR’s favor and SOLAR filed an action in the Superior Court of California for the County of Los Angeles for recognition of this foreign country money judgment in the amount of $4.4 million. As of October 15, 2024 and December 31, 2024, we have included the amount of $4.4 million as a liability in the consolidated balance sheets. Music Licensing We have outstanding contractual obligations to various record labels, music publishers and performing rights organizations (collectively, “ Rightsholders ”) who have licensed to us the right to use sound recordings and musical compositions in connection with the operation of the Triller app and other aspects of our business. As of October 15, 2024 and December 31, 2024, we have recorded liabilities in the amount of $30.0 million for unpaid amounts owed under its music licenses. We are also involved in various legal proceedings and has received threats of litigation from Rightsholders. We believe it may be or become liable to Rightsholders for additional amounts such as interest, penalty fees, attorneys’ fees, copyright infringement damages and other amounts, but is currently unable to estimate the probability of loss associated with these actions or the range or reasonably possible losses, if any, or the impact such losses may have on our results of operations, financial condition or cash flows. Fox Plaza Lease On August 29, 2023, Fox Plaza, LLC initiated an action against Proxima Media, LLC and Triller Platform Co. (erroneously sued as Triller, Inc.) in Los Angeles Superior Court alleging breach of lease against Proxima Media, LLC and breach of guaranty against Triller Platform Co. as a result of defendants’ alleged failure to pay rents owed under a commercial office lease. The plaintiff seeks damages in excess of $3.5 million, plus attorney’s fees, costs of suit, and additional damages to be proven at trial. We intend to vigorously defend ourselves in this matter. A mediation has been set for August 27, 2024. It is reasonably possible that the potential loss may exceed our accrued liability. As of December 31, 2024, we have accrued a liability for this loss contingency in the amount of $1.75 million, which we believe represent the best estimate of the probable loss. It is reasonably possible that the ultimate resolution of this matter could differ from the amount accrued. Concentrix Daksh We have assumed the liabilities of Triller Corp, including the legal contingency accrual stemming from the arbitration with Concentrix Daksh Services India Private Ltd. (“Concentrix”). Concentrix alleges wrongful early termination of a services agreement and seeks damages of approximately $2.0 million in lost profits, plus interest and fees. We have accrued approximately $2.0 million as a liability pertaining to this matter. While we intend to defend the claim vigorously, we believe the recorded amount represents the probable loss as of December 31, 2024. Epic Sports & Entertainment We have assumed the liabilities of Triller Hold Co LLC and Triller Fight Club LLC related to litigation with Epic Sports & Entertainment, Inc. (“Epic”) for alleged breach of a settlement agreement. Epic initially claimed damages of approximately $1.8 million, and recent settlement discussions indicate a potential settlement range of approximately $0.6 to $2.0 million. As of December 31, 2024, we have accrued a legal provision of approximately $1.9 million as a liability in the consolidated balance sheets. 94 Samsung Arbitration Award In connection with the Merger Transaction, the Company assumed the liabilities of Triller Corp, including the legal contingency accrual stemming from the arbitration with Samsung Electronics Co., Ltd due to a breach of a commercial agreement and failure to pay the amounts owed under the contract. The U.S. District Court for the Central District of California confirmed the award and entered a judgment of approximately $2.6 million in May 2024, accruing interest at $368.43 per day, at a rate of 5.17% per annum until repaid. A writ of execution was issued on August 2, 2024, and a Judgment Debtor Examination is scheduled for February 24, 2025. The Company provided financial records in December 2024 in response to a subpoena. As of December 31, 2024, the Company accrued approximately $3.0 million as a liability in the consolidated balance sheets. Prem Parameswaren We have assumed potential liabilities related to claims asserted by Prem Parameswaran, the former Chief Executive Officer of Triller Corp for alleged unpaid compensation. To avoid litigation, the parties reached an agreement in principle for a settlement consisting of $500,000 in cash and 625,000 stock units, subject to approval by AGBA Group Holding Limited. As of December 31, 2024, we have accrued approximately $2.4 million as a liability pertaining to this matter, representing the probable settlement amount. Triller Legacy, LLC Settlement Agreement On July 26, 2024, Triller Hold Co, LLC and Triller Acquisition, LLC entered into a settlement agreement with Triller Legacy, LLC (“Legacy”), original sellers of Triller Corp, regarding the 2019 acquisition of Triller Corp from Legacy. We agreed to issue 3.89 million shares of Series A common stock to Legacy. Legacy intends to sell 1.75 million shares for a minimum return of approximately $7.0 million by the end of March 31, 2025. We must compensate Legacy for any shortfall of share sales below $7.0 million. We have the option to purchase up to 1.75 million shares from Legacy at $4.00 per share through December 31, 2024 and $4.75 per share through March 31, 2025. We can also opt to pay Legacy $7.0 million. We have included the estimated guaranteed payment liability in its accounts payable and legal contingencies. Bobby Sarnevesht We are subject to claims asserted by Bobby Sarnevesht for alleged breach of a merger agreement and related contracts. We dispute the claims and the matter remains unresolved. As of December 31, 2024, we have accrued approximately $3.0 million as a liability pertaining to this dispute, which represents our best estimate of the probable loss. YA II PN, Ltd. On November 26, 2024, the Company, Triller Corp., a wholly-owned subsidiary of the Company, Triller Hold Co LLC, (“ Triller Hold Co ”), a Delaware limited liability company and a wholly-owned subsidiary of the Company, and Holdings Limited, a Cayman Islands limited company, (collectively as the “Defendants”) were served with a summon and a notice of motion for summary judgment in lieu of compliant filed by YA II PN, Ltd. (the “ Plaintiff ”), a Cayman Islands exempt limited partnership, in the Supreme Court of the State of New York County of New York for the payment of for $35,546,302.19, plus default interest that continues to accrue, pre-judgment interest, costs, legal fees, and expenses. The Plaintiff alleged that the defendants were in default of (i) that certain Amended and Restated Secured Convertible Promissory Note, Number AGBA-1, dated as of June 28, 2024, delivered by the Company to the Plaintiff (as amended, the “ Note ”), (ii) that certain Second Amended and Restated Standby Equity Purchase Agreement, dated as of June 28, 2024, by and among the Company, the Plaintiff and Triller Corp. (the “ SEPA ”), (iii) that certain Amended and Restated Guaranty Agreement, dated as of June 28, 2024, by and among Triller Corp., Triller Hold Co and the Plaintiff (the “ Triller Guaranty ”), (iv) that certain Amended and Restated Pledge Agreement, dated June 28, 2024, by and between Triller Hold Co and the Plaintiff (the “ Triller Pledge Agreement ”), (v) that certain Guaranty Agreement, dated as of June 28, 2024, by and between Convoy Global Holdings Limited, and the Plaintiff, (vi) that certain Pledge Agreement, dated as of June 28, 2024, by and between the Company and the Plaintiff (the “ Company Guaranty ”), and (vii) that certain Amended and Restated Registration Rights Agreement, dated as of June 28, 2024, by and between the Company and the Plaintiff (the “ Registration Rights Agreement ”). 95 On June 20, 2025, we transferred 3,000,000 shares of common stock of BKFC, previously pledged by Triller Hold Co LLC as collateral pursuant to the Amended and Restated Pledge Agreement, dated June 28, 2024, between Triller Hold Co LLC and Yorkville, as partial repayment. The case does not have a trial date set. Defendants intend to litigate the case until a resolution is reached. On December 3, 2025, the Plaintiff filed responses and objections (the “Responses and Objections”) to the Defendants’ first set of interrogatories dated November 3, 2025 to the Supreme Court of the State of New York County of New York (Index no.: 659314/2024). Pursuant to the Responses and Objections, the Plaintiff stated its claims and contentions with respect to its damage resulting from the event of default that occurred under the Note when the Defendants failed to pay all amounts due by the Maturity Date. The total amount owed under the Note, including interest, plus costs, legal fees, and expenses incurred by Yorkville less the value of BKFC’s shares is approximately $38.1 million. Yorkville further stated that it continues to accrue additional damages with each passing day that the obligations under the Note and guaranties remain unpaid. The case is on-going and our legal counsel will continue to handle this matter. The Company intends to defend itself vigorously. No prediction can be made as to the outcome of the lawsuit. 13080 Advisors LLC v. Triller Group, Inc., Jams Reference No. 5220008039 (Los Angeles County, California) On December 18, 2024, 13080 Advisors LLC (“Claimant”) submitted a Notice of Arbitration and Demand for Arbitration (“13080 Arbitration Demand”) to JAMS to assert that Triller and TAG Holdings Limited (collectively as “Respondents”) have breached their alleged duties to Claimant under the following alleged agreements: (1) a partially executed document entitled “Grant Agreement for S-8 Registered Shares” dated March 14, 2024, and (2) a partially executed document entitled “Consulting Services Agreement” also dated March 14, 2024. The 13080 Arbitration Demand asserts four purported claims for relief: breach of contract, negligent misrepresentation, specific performance and declaratory relief. On February 18, 2025, Respondents submitted to JAMS a motion to dismiss all the claims for relief asserted in the 13080 Arbitration Demand along with a motion to strike Claimant’s requests for punitive damages. This motion remains pending and no arbitrator has been appointed. The case is on-going and our legal counsel will continue to handle this matter. At this stage in the proceedings, it is unable to determine the probability of the outcome of the matter or the range of reasonable possible loss, if any. Subsequent to December 31, 2024, we are involved in the following material legal proceedings: Robert E. Diamond Jr.et al. v. Triller Group, Inc., Case No. 25-cv-00129 (PAE) (S.D.N.Y.) On January 7, 2025, Robert E. Diamond Jr (“Diamond”), the former chairman of Triller’s board of directors and Atlas Merchant Capital LLC (collectively as “Plaintiffs”), an advisory services company under Diamond’s control filed a lawsuit in federal district court in Manhattan, New York to allege that Triller has failed to pay over or grant to Plaintiffs certain cash amounts and equity awards to which Plaintiffs were entitled pursuant to various agreements between Plaintiffs and Triller. Plaintiffs claim that they are entitled to over $5.0 million in cash compensation and over 6.0 million shares of Triller’s common stock. On February 28, 2025, Triller filed a partial motion to dismiss the scope of Plaintiffs’ claims. This motion is now pending before the court. The case is on-going and our legal counsel will continue to handle this matter. At this stage in the proceedings, it is unable to determine the probability of the outcome of the matter or the range of reasonable possible loss, if any. ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. 96 PART II