Item 1. Legal Proceedings
ITEM
1. LEGAL PROCEEDINGS.
We
were named as a defendant in a putative class action lawsuit filed in the United States District Court for the Northern District of Illinois
(the “Court”) on or about December 21, 2020. The plaintiffs, Eileen Brodsky and Rhonda Diamond, purported to represent a
class of individuals who purchased coffee products at one of our supermarket customers, generally allege that such client sold private
label coffee products manufactured by us and one of our partners, which falsely described the number of cups of coffee that could be
made from the amount of product purchased. These parties were also named as defendants in the action. The complaint asserted a variety
of claims under New York and California consumer protection laws, and seeks unspecified monetary damages, including disgorgement and
restitution, as well as other forms of relief including class certification, declaratory and injunctive relief, attorneys’ fees,
and interest. On September 28, 2021, the Court entered an order granting our motion to dismiss
with prejudice (the “Dismissal Order”). In the Dismissal Order, the Court stated that no reasonable coffee drinker would
be deceived by our packaging. The plaintiffs filed an appeal with the 7 th Circuit Court of Appeals (the “Appeal”).
After the Appeal was filed, we settled the matter during mediation in late January 2022 and the Appeal was dismissed.
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A
significant customer of ours was named as a defendant in a putative class
action lawsuit filed in the United States District Court for the District of Massachusetts on or about February 2, 2021, concerning the
labeling on private label coffee productions we sold to the customer. The plaintiff, David Cohen, purporting to represent a class of individuals
who purchased coffee products from our customer, generally alleged that the customer sold private label coffee products manufactured by
us which falsely described the number of cups of coffee that could be made from the amount of product purchased. We were not named as
a defendant in the action, but agreed to indemnify the customer for the costs and expenses incurred in defending the lawsuit and for any
liability the customer may suffer as a result. The complaint asserted a variety of claims under Massachusetts consumer protection laws,
and seeks unspecified monetary damages as well as other forms of relief including class certification, declaratory and injunctive relief,
attorneys’ fees, and interest. The parties have finalized the details of a settlement agreement. The final settlement amount was
immaterial to the Company’s operations and results of operations.
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