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Item 3. Legal Proceedings

2021-03-29 compared with 2020-03-19 · 33 added, 30 removed, 2 unchanged (97% of the section changed)

LEGAL PROCEEDINGS

On August 7, 2018, we commenced

an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of New York for breach

of a Securities Purchase Agreement, or the North Empire Agreement, in which we are seeking damages in an amount to be determined

at trial, but in no event less than $616,000.

This was preceded by a filing of a Summons with Notice by North Empire against us,

also in the same Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the North

Empire Agreement.

On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us

against them alleging that we failed to timely deliver stock certificates to North Empire causing damage to North Empire in the

amount of $10,958,589.

North Empire also filed a third-party complaint against Eli Walles, our former Chairman of the board of

directors, and Ronen Luzon asserting similar claims against them in their individual capacities.

On October 17, 2018, we filed

a reply to North Empire’s counterclaims.

On November 15, 2018, Eli Walles and Ronen Luzon filed a motion to dismiss North

Empire’s third-party complaint.

On January 6, 2020, the Court granted the motion and dismissed the third-party complaint.

We believe, based on the opinion of our legal counsel, it is more likely than not that the counterclaims will be dismissed.

intend to vigorously defend any claims made by North Empire.

addition to the above, from time to time, we may become in involved in lawsuits as well as subject to various legal proceedings,

claims, threats of litigation, and investigations in the ordinary course of business.

While certain matters to which we are a

party may specify the damages claimed, such claims may not represent reasonably possible losses.

Given the inherent uncertainties

of litigation, the ultimate outcome of these matters cannot be predicted at this time, nor can the amount of possible loss or

range of loss, if any, be reasonably estimated.

unfavorable outcome on any litigation matters could require us to pay substantial damages or could prevent us from selling certain

of our products.

As a result, a settlement of, or an unfavorable outcome on, any of the matters referenced above or other litigation

matters could have a material adverse effect on our business, results of operations and financial condition.

On August 7, 2018, we commenced an action

against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of New York for breach of a Securities

Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than

On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege

damages in an amount of $11.4 million arising from an alleged breach of the Agreement.

On September 6, 2018, North Empire filed

a Notice of Discontinuance of the action it had filed on August 2, 2018.

On September 27, 2018, North Empire filed an answer and

asserted counterclaims in the action commenced by us against them, alleging that we failed to deliver stock certificates to North

Empire causing damage to North Empire in the amount of $10,958,589.

North Empire also filed a third-party complaint against our

CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities.

On October 17,

2018, we filed a reply to North Empire’s counterclaims.

On November 15, 2018, our CEO and now former Chairman of the Board

filed a motion to dismiss North Empire’s third-party complaint.

On January 6, 2020, the Court granted the motion and dismissed

the third-party complaint.

Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims and counterclaims.

to vigorously defend any claims made by North Empire.

In addition to the

above, from time to time, we may become in involved in lawsuits as well as subject to various legal proceedings, claims, threats

of litigation, and investigations in the ordinary course of business.

While certain matters to which we are a party may specify

the damages claimed, such claims may not represent reasonably possible losses.

Given the inherent uncertainties of litigation,

the ultimate outcome of these matters cannot be predicted at this time, nor can the amount of possible loss or range of loss,

if any, be reasonably estimated.

An unfavorable outcome

on any litigation matters could require us to pay substantial damages or could prevent us from selling certain of our products.

As a result, a settlement of, or an unfavorable outcome on, any of the matters referenced above or other litigation matters could

have a material adverse effect on our business, results of operations and financial condition.

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