What changed in this filing

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Item 1. Legal Proceedings

2025-02-19 compared with 2024-11-14 · 104 added, 83 removed, 105 unchanged (64% of the section changed)

1 unchanged sentence

Securities Class Action Litigation.

2022 and July 28, 2022, securities class action complaints (the former, the “Chow Action” and the latter, the “Manici

Action”) and together, the “Securities Class Action Litigation”) were filed by purported stockholders of the Company

in the United States District Court for the Central District of California against the Company and certain of the Company’s current

and former officers and directors.

The complaints allege, among other things, that the defendants violated Sections 10(b) and 20(a) of

the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder, by making false and misleading statements and omissions of

material fact in connection with the Company’s relationship with Serhat Gümrükcü and its commercial prospects.

complaints seek unspecified damages, interest, fees, and costs.

On November 22, 2022, the Manici Action was voluntarily dismissed without

prejudice, but the Chow action remains pending.

On July 26, 2022 and July 28, 2022, securities class action complaints (the former, the “Chow Action” and the latter, the

“Manici Action”) and together, the “Securities Class Action Litigation”) were filed by purported stockholders

of the Company in the United States District Court for the Central District of California against the Company and certain of the Company’s

current and former officers and directors.

The complaints allege, among other things, that the defendants violated Sections 10(b) and

20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder, by making false and misleading statements and omissions

of material fact in connection with the Company’s relationship with Serhat Gümrükcü and its commercial prospects.

The complaints seek unspecified damages, interest, fees, and costs.

On November 22, 2022, the Manici Action was voluntarily dismissed

without prejudice, but the Chow action remains pending.

On October 22, 2023, the Court appointed a lead plaintiff in the Chow Action.

lead plaintiff filed an amended complaint on December 15, 2023.

The Company has filed a motion to dismiss the amended complaint on March

The lead plaintiff filed an amended complaint on December 15, 2023.

The Company has filed a motion to dismiss the amended complaint on

March 15, 2024.

The Court denied the Company’s motion to dismiss on June 28, 2024.

A mediation was held on September 17, 2024, after which

the parties signed a stipulation of settlement, dated November 8, 2024.

The plaintiff’s deadline to file a motion for preliminary

approval of the settlement is December 9, 2024.

A mediation was held on September 17, 2024, after

which the parties signed a stipulation of settlement, dated November 8, 2024.

The plaintiff filed their motion for preliminary approval

of the settlement on December 9, 2024.

On December 18, 2024, the Company filed a notice of non-opposition to the motion for preliminary

approval of the settlement.

On January 7, 2025, the Court took the plaintiff’s motion for preliminary approval of the settlement

under consideration without oral argument.

Federal Derivative Litigation.

On September 22,

2022, Samuel E.

Koenig filed a shareholder derivative action in the United States District Court for the Central District of California.

On January 19, 2023, John Solak filed a substantially similar shareholder derivative action in the United States District Court for the

District of Delaware.

Both derivative actions recite similar underlying facts as those alleged in the Securities Class Action Litigation.

The actions, filed on behalf of the Company, name Serhat Gümrükcü and certain of the Company’s former directors as

On September 22, 2022, Samuel E.

Koenig filed a shareholder derivative action in the United States District Court for the Central District

of California.

On January 19, 2023, John Solak filed a substantially similar shareholder derivative action in the United States District

Court for the District of Delaware.

Both derivative actions recite similar underlying facts as those alleged in the Securities Class Action

The actions, filed on behalf of the Company, name Serhat Gümrükcü and certain of the Company’s former

directors as defendants.

The actions also name the Company as a nominal defendant.

The actions allege violations of Sections 14(a) and 20(a) of the

Securities Exchange Act of 1934 and also set out claims for breach of fiduciary duty, contribution and indemnification, aiding and abetting,

and gross mismanagement.

Plaintiffs do not quantify any alleged injury, but seek damages, disgorgement, restitution, and other costs and

On January 24, 2023, the United States District Court for the Central District of California stayed the Koenig matter pending

resolution of the defendants’ anticipated motion to dismiss in the Securities Class Action Litigation.

On April 4, 2023, the United

States District Court for the District of Delaware stayed the Solak matter pending resolution of the defendants’ anticipated motion

to dismiss in the Securities Class Action Litigation.

On June 28, 2024, the United States District Court for the Central District of California

denied defendants’ motion to dismiss the Securities Class Action Litigation.

On October 23, 2024, the court in the Koenig matter

stayed the case pending further order of the court.

The parties’ deadline to file a joint status report in the Koenig matter

is January 10, 2025.

On October 28, 2024, the court in the Solak matter stayed the case for ninety (90) days.

The defendants

have not yet responded to either complaint.

The Company intends to contest these matters but expresses no opinion as to the likelihood

of favorable outcomes.

Management is unable to determine the likelihood of a loss, including a possible range of losses, if any, arising

from this matter as of the reporting date.

The actions allege violations of Sections 14(a) and

20(a) of the Securities Exchange Act of 1934 and also set out claims for breach of fiduciary duty, contribution and indemnification, aiding

and abetting, and gross mismanagement.

Plaintiffs do not quantify any alleged injury, but seek damages, disgorgement, restitution, and

other costs and expenses.

On January 24, 2023, the United States District Court for the Central District of California stayed the Koenig

matter pending resolution of the defendants’ anticipated motion to dismiss in the Securities Class Action Litigation.

2023, the United States District Court for the District of Delaware stayed the Solak matter pending resolution of the defendants’

anticipated motion to dismiss in the Securities Class Action Litigation.

On June 28, 2024, the United States District Court for the Central

District of California denied defendants’ motion to dismiss the Securities Class Action Litigation.

On October 23, 2024, the court

in the Koenig matter stayed the case pending further order of the court.

On January 10, 2025, the parties in the Koenig matter filed a

joint status report requesting that all pending deadlines in the matter remain suspended.

The parties’ deadline to file a joint

status report in the Koenig matter is April 11, 2025.

On October 28, 2024, the court in the Solak matter stayed the case for ninety (90)

On January 29, 2025, the court in the Solak matter stayed the case for an additional ninety (90) days.

The defendants have not yet

responded to either complaint.

The Company intends to contest these matters but expresses no opinion as to the likelihood of favorable

Management is unable to determine the likelihood of a loss, including a possible range of losses, if any, arising from this

matter as of the reporting date.

State Derivative Litigation.

12 unchanged sentences

On October 28, 2024, the court in the Midler matter stayed the case for ninety

On January 24, 2025, the court in the Midler matter stayed the case for an additional ninety (90) days.

deadline to file a joint status report in the Midler matter is April 28, 2025.

The defendants have not yet responded to the complaint.

The Company intends to contest this matter but expresses no opinion

as to the likelihood of a favorable outcome.

Management is unable to determine the likelihood of a loss, including a possible range of

losses, if any, arising from this matter as of the reporting date.

The Company intends to contest this matter but expresses no opinion as to the likelihood of a favorable outcome.

Management is unable

to determine the likelihood of a loss, including a possible range of losses, if any, arising from this matter as of the reporting date.

21, 2022, the Company filed a Complaint in the Superior Court of the State of California for the County of Los Angeles against Serhat

16 unchanged sentences

as of April 18, 2021, have been terminated and the Company has no rights to any license under such agreements.

Trial is currently scheduled

to begin on March 3, 2025.

The Company denies these allegations and intends to vigorously defend against the cross claims while pursuing

its claims against the Defendants.

Trial was scheduled to

begin on March 3, 2025.

On November 14, 2024, the court vacated the March 3, 2025 trial date and set a trial setting conference for May

Discovery remains ongoing.

The Company denies the allegations in Defendants’ cross claims and intends to vigorously defend

against them while pursuing its claims against the Defendants.

On March 1, 2021, the Company’s

31 unchanged sentences

The Company moved to dismiss the Verified Complaint on September

4, 2023, in lieu of opposing the motion to dismiss, Plaintiffs filed a Verified First Amended Complaint (“FAC”).

Plaintiffs assert claims against the Company and others for purported breaches of the Investor Rights Agreement, fraud, tortious interference

with a contract, and several other torts.

Plaintiffs seek compensatory, exemplary, and punitive damages, as well as certain declaratory

relief, specific performance, and pre- and post-judgment interest, costs, and attorneys’ fees.

The Company filed a motion to dismiss

the FAC on December 18, 2023 and a hearing is scheduled for November 15, 2024.

The Company denies Plaintiffs’ allegations and intends

to vigorously defend against the claims.

On December 4, 2023, in lieu of opposing the motion

to dismiss, Plaintiffs filed a Verified First Amended Complaint (“FAC”).

In the FAC, Plaintiffs assert claims against the

Company and others for purported breaches of the Investor Rights Agreement, fraud, tortious interference with a contract, and several

Plaintiffs seek compensatory, exemplary, and punitive damages, as well as certain declaratory relief, specific performance,

and pre- and post-judgment interest, costs, and attorneys’ fees.

The Company filed a motion to dismiss the FAC on December 18, 2023

and the court held a hearing on the Company’s motion to dismiss on November 15, 2024.

At the hearing, the court dismissed (1) all

claims brought on behalf of Wittekind and the Trusts, (2) the fraudulent concealment claim against the Company and others (without prejudice),

and (3) the breach of contract claim against the Company related to a registration statement that was not filed in 2023.

At the hearing,

the court also found that punitive damages were not available to Plaintiffs.

The court took the remaining issues briefed on the Company’s

motion to dismiss under advisement.

The Company denies Plaintiffs’ allegations and remaining claims and intends to vigorously defend

against these claims.

On August 24, 2023, counsel on

15 unchanged sentences

and Wittekind filed a shareholder derivative action in the United States District Court for the Central District of California against

certain officers, directors, and investors of the Company, as well as other defendants, in connection with, inter alia , Weird Science

and Wittekind’s demand for corrective action.

certain officers, directors, and investors of the Company, as well as other defendants, in connection with, inter alia , Weird

Science and Wittekind’s demand for corrective action.

Plaintiffs filed an amended complaint on June 21, 2024.

The First Amended Verified

Stockholder Derivative Complaint (“Derivative Complaint”) alleges, among other claims, violations of Section 13(d) and 14(a)

and Rules 10b-5(a), 10b-5(c) and 14a-9 of the Exchange Act of 1934.

The Derivative Complaint also includes claims of breach of fiduciary

duty, corporate waste, unjust enrichment, and contribution/indemnification.

Weird Science and Wittekind seek unspecified compensatory,

exemplary, and punitive damages and certain injunctive relief.

The Derivative Complaint names the Company as a nominal defendant.

19, 2024, certain of the director defendants, who had agreed to waive service of the summons and Derivative Complaint, filed a motion

to dismiss the Derivative Complaint on a variety of procedural and substantive grounds.

A hearing on the motion dismiss was held on October

3, 2024 and the court subsequently took the motion under submission.

On October 22, 2024, the plaintiffs filed a notice of certain subsequent

events that they allege relate to their pending motion to dismiss.

On October 29, 2024, the court granted the director defendants’

motion to dismiss and dismissed the Derivative Complaint without prejudice, but also without leave to amend.

The First Amended

Verified Stockholder Derivative Complaint (“Derivative Complaint”) alleges, among other claims, violations of Section 13(d)

and 14(a) and Rules 10b-5(a), 10b-5(c) and 14a-9 of the Exchange Act of 1934.

The Derivative Complaint also includes claims of breach

of fiduciary duty, corporate waste, unjust enrichment, and contribution/indemnification.

Weird Science and Wittekind seek unspecified

compensatory, exemplary, and punitive damages and certain injunctive relief.

The Derivative Complaint names the Company as a nominal

On July 19, 2024, certain of the director defendants, who had agreed to waive service of the summons and Derivative Complaint,

filed a motion to dismiss the Derivative Complaint on a variety of procedural and substantive grounds.

A hearing on the motion dismiss

was held on October 3, 2024 and the court subsequently took the motion under submission.

On October 22, 2024, the plaintiffs filed a

notice of certain subsequent events that they allege relate to their pending motion to dismiss.

On October 29, 2024, the court granted

the director defendants’ motion to dismiss and dismissed the Derivative Complaint without prejudice, but also without leave to

On November 27, 2024, Weird

Science and Wittekind filed a notice of appeal of the court’s decision granting the director defendants’ motion to dismiss.

The appeal remains pending.

On June 21, 2024, the Company filed

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Risk Factors.

As a “smaller

reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide the

information required by this Item.

As a “smaller reporting company”

as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide the information required by this

Unregistered Sales of Equity Securities and Use of Proceeds.

3 unchanged sentences

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.

What changed 10-Q

Item 1. Legal Proceedings