Item 3. Legal Proceedings
ITEM 3. LEGAL PROCEEDINGS
Legal Proceedings
On April 3, 2024, the Company
and the underwriter of our initial public offering, D.A. Davidson & Co (“D.A. Davidson”), entered into a settlement agreement
and mutual release (the “Settlement Agreement”) with Boustead Securities, LLC (“Boustead”) and its current and
former employees, officers, directors, partners, agents and affiliates, pursuant to which all parties agreed to release all claims in
exchange for the Company’s payment of $1.3 million (the “Settlement Amount”) to Boustead. The Settlement Agreement was
entered into for purposes of settling in full the FINRA Arbitration (FINRA Case No. 22-01133) which had been brought by Boustead against
the Company and D.A. Davidson after the Company opted not to complete its initial public offering with Boustead but instead engaged and
completed its initial public offering with D.A. Davidson. In entering into the Settlement Agreement, the Company paid the Settlement Amount
in four equal installments of $325,000 on each of April 3, 2024, May 3, 2024, June 3, 2024 and July 3, 2024. As of the date of this Annual
Report, the parties have formally withdrawn all of the complaints that were before FINRA, with prejudice, and the matter is settled in
full.
In addition, effective June
18, 2024, and pursuant to the agreement between our co-founder and chairman, Chenlong Tan and D.A. Davidson, Mr. Tan and co-founder, Allan
Huang, returned a total of 541,667 shares (the “Cancelled Shares”) to the Company, all of which were cancelled following their
return. The Cancelled Shares, valued at $2.40 per share on the date of cancellation, served to cover the full value of the Settlement
Amount.
Other than the above settlement,
we are not presently a party to any pending or other threatened legal proceedings or claims against us that we believe will have a material
adverse effect on our business, financial condition, or operating results. Nonetheless, we may from time to time become involved in legal
proceedings in the ordinary course of business.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
29
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.