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Item 3. Legal Proceedings

2025-03-31 compared with 2024-04-16 · 48 added, 80 removed, 6 unchanged (96% of the section changed)

LEGAL PROCEEDINGS

From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business.

On June 23, 2022, The Good Clinic LLC was notified that a former employee had filed a lawsuit for wrongful termination.

The Good Clinic believes the lawsuit is without merit.

Mitesco (Company) was not named in the suit.

We have settled this matter as of January 11, 2024 for total consideration consisting of a cash payment of $3,000.

On October 25, 2022, the Company was notified that a vendor filed a lawsuit related to a contract dispute naming both The Good Clinic and The CEO of the Good Clinic.

This suit was settled on May 5, 2023, and dismissed with prejudice on May 12, 2023.

The settlement included the issuance of the Company’s restricted common stock.

As a part of the settlement the Company issued 2,552 shares of its restricted common stock to the plaintiff and it issued to the CEO of The Good Clinic 19,622 of its restricted common stock, plus $3,000 in cash for reimbursement of expenses related to settling the suit with the vendor.

The Company has a number of legal situations involved with the winding down of its clinic business activities.

These include claims regarding certain construction contracts and cancellation of leases as noted below:

Nordhaus Clinic

On November 1, 2020, we entered into an agreement to open a clinic in Minneapolis, Minnesota.

The initial lease term is eight years.

Fixed rent payments under the initial term are approximately $511,000.

On November 6, 2023, the Company received a termination notice from the landlord indicating the lease had been terminated.

No additional claims have been received by the landlord and the Company believes no additional amounts are owed.

Egan Clinic a.k.a.

On October 14, 2021, we entered into an agreement to open a clinic in Eagan, Minnesota, which began operations in the fourth quarter of 2021.

The initial lease term is for 96 months.

Fixed rent payments under the initial term are approximately $767,000.

A Summary Judgment was granted on December 4, 2023, in the amount of $488,491, and the entry of final judgment was entered on December 15, 2023 and the Company has released the property back to the leaseholder.

Paul Clinic a.k.a.

On August 31, 2021, we entered into an agreement to open a clinic in St.

Paul, Minnesota, which began operations in the fourth quarter of 2021.

The initial lease term is for 114 months.

Fixed rent payments under the initial term are approximately $1,153,000.

A stipulation for Judgment was filed on December 21, 2023 in the amount of $415,266.

The stipulated judgment includes $178,542 in unpaid back rent, $172,124 in resolution of mechanics’ liens, and $64,600 in attorneys’ fees.

Final entry of judgment by the Court was entered against the Company on January 19, 2024, and the Company has released the property back to the leaseholder.

Louis Park Clinic a.k.a.

Excelsior & Grand

On May 24, 2021, we entered into an agreement to open a clinic in St.

Louis Park, Minnesota, which began operations in the third quarter of 2021.

The initial lease term is seven years.

Fixed rent payments under the initial term are approximately $673,000.

The Company agreed to and executed a Confession of Judgment in the amount of $425,351 on April 2, 2024 and has released the property back to the leaseholder.

We received the fully executed and recorded judgement on April 10, 2024.

Eden Prairie Clinic a.k.a.

On June 8, 2021, we entered into an agreement to open a clinic in Eden Prairie, Minnesota, which began operation in the third quarter of 2021.

The initial lease term is eight years.

Fixed rent payments under the initial term are approximately $620,000.

The Company has surrendered possession of the property and is currently in negotiations the amounts owed and is in the process of settling the remaining amounts owed.

Maple Grove Clinic a.k.a.

On October 8, 2021, we entered into an agreement to open a clinic in Maple Grove, Minnesota which began operation in the fourth quarter of 2021.

The initial lease term is for 108 months.

Fixed rent payments under the initial term are approximately $1,153,127.

On October 22, 2022, the Company entered into a settlement agreement with the leaseholder for $219,576 and the Company has released the property back to the leaseholder.

Radiant Clinic a.k.a.

On September 9, 2021, we entered into an agreement to open a clinic in Denver, Colorado, which was expected to begin operation in the first quarter of 2023 but possession of which has been relinquished to the landlords.

The initial lease term is for 90 months.

Fixed rent payments under the initial term are approximately $782,000.

As of April 10, 2024, the Company has settled the amounts owed to the leaseholder and full resolution of all liens for approximately $530,000 and the Company has released the property back to the leaseholder.

Quincy Clinic a.k.a.

On September 28, 2021, we entered into an agreement to open a clinic in Denver, Colorado, which was expected to begin operation in the first quarter of 2023 but possession of which has been relinquished to the landlords.

The initial lease term is for 94 months.

Company has a number of legal situations involved with the winding down of its clinic business activities.

These include claims regarding

certain construction contracts and cancellation of leases as noted below:

ACCRUED ON SETTLEMENT

SETTLEMENT OBLIGATION

OF SETTLEMENT

PAYMENT OBLIGATION

LOUIS PARK, MN

Clinic a.k.a.

On September 28, 2021, we entered into an agreement

to open a clinic in Denver, Colorado, which was expected to begin operation in the first quarter of 2023 but possession of which has

been relinquished to the landlords.

The initial lease term is 94 months.

Fixed rent payments under the initial term are approximately

A Final Judgment was granted on November 14, 2023, in the amount of $348,764 including interest, fees and other costs.

The Company has released the property back to the leaseholder.

The following table summarizes the status of our property settlements as noted above and the total settlement amounts as of the date of the filing:

ALSO KNOWN AS:

PROPERTY NAME/OWNER

ORIGINAL OBLIGATION

SETTLEMENT AMOUNT

TYPE OF SETTLEMENT

MINNEAPOLIS, MN

CASH PAYMENT OBLIGATION

DEFAULT JUDGEMENT

LOUIS PARK, MN

EXCELSIOR & GRAND

DEFAULT JUDGEMENT

CONTINENTAL 560

DEFAULT JUDGEMENT

MAPLE GROVE, MN

SETTLEMENT AGREE

DEFAULT JUDGEMENT

Administrative offices

On June 24, 2021, we entered into an agreement to open an administrative office in St.

Company has released the property back to the leaseholder.

The owner of the property has filed before the same court, an action against

the Company (Case No.

2022 CV 33173, Division:

409, Consolidated with 2022CV33653) seeking to modify the final settlement for an additional

We intend to vigorously defend the Company as our position is that there is no basis for this claim.

Administrative

On June 24, 2021, we entered into an agreement to

open an administrative office in St.

Louis Park, Minnesota.

The initial lease term is 2.5 years.

Fixed rent payments under the initial term are approximately $244,000.

We have not entered into a settlement agreement on this site as of the date of this filing but expect to shortly.

Fixed rent payments under the initial

term were approximately $244,000.

We believe that there is no further obligation in this situation, but we do not have such documented

in writing at this time.

Debt for Equity Agreement and other obligations

Company entered into a debt-for-equity exchange agreement with Gardner Builders Holdings, LLC (the “Creditor”) on January

7, 2022 (the “Agreement”).

Pursuant to the Agreement, the Company issued shares of restricted common stock, par value $0.01

per share, of MITI (the “Restricted Shares”) to the Creditor in exchange for the Company Debt Obligations, as defined below.

The Agreement settled certain accounts payable amounts

owed by the Company to the Creditor (the “Accounts Payable Amount”) as well as then upcoming amounts that would become due

between the date of the Agreement and April 1, 2022.

The Agreement also settled incurred interest and penalties on the amounts due through

January 5, 2022, as well as future interest payments on amounts to be incurred in the first quarter of 2022 (collectively, the “Additional

Costs”, and combined with the Accounts Payable Amount, the “Company Debt Obligations”).

The Accounts Payable Amount

was $500,000, the Additional Costs were $294,912 and the conversion price was $12.50.

As a result, 63,593 Restricted Shares were authorized

to be issued.

The Company’s Board of Directors approved the Agreement on January 5, 2022.

Much of the amounts claimed by Gardner

have been resolved by the settlements with the various leaseholders where Gardner had filed liens.

During 2021 and through 2022 a total

of $2,305,155 was paid by the Company directly to Gardner for their services.

As of the date of this filing the Company is continuing

an effort to negotiate a settlement of any remaining obligations to this vendor.

MINE SAFETY DISCLOSURES

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.

What changed 10-K

Item 3. Legal Proceedings