Item 3. Legal Proceedings
Item 3. Legal Proceedings
We may in the future be involved in actual and/or threatened legal proceedings, claims, investigations and government inquiries arising in the ordinary course of our business, including legal proceedings, claims, investigations and government inquiries involving intellectual property, data privacy and data protection, privacy and other torts, illegal or objectionable content, consumer protection, securities, employment, contractual rights, civil rights infringement, false or misleading advertising, or other legal claims relating to our business.
On November 8, 2013,
the Company entered into a collaboration agreement (“Agreement”) with Orient EuroPharma Co., Ltd. (“OEP”), pursuant
to which the parties will develop certain licensed products defined in the Agreement. NeOnc will license OEP the right to commercialize
the Company’s drug NEO100, a highly purified form of perillyl alcoho l (“Licensed Product”), in the territories
specified in the license agreement (“Territory”).
In 2023, the Company sent
notice to OEP indicating their intent to terminate the Agreement with OEP, after which OEP threatened litigation. On February 15,
2024, OEP and the Company entered into a settlement agreement whereas the Company and OEP terminated the Agreement in exchange for a
payment in the amount of $4,000,000 payable by the Company to OEP within ten days of the date the Company completes its initial public
offering. The settlement agreement provides for interest accruing on the unpaid balance. The Company has a litigation settlement payable
of $4,170,000 and $4,000,000 in the accompanying consolidated balance sheets as of December 31, 2025 and 2024, respectively. As of the
date of this filing, the Company has not paid the litigation settlement amount.
On July 1, 2022, NeOnc Technologies, Inc. and Fox Infused, LLC, a Delaware limited liability company (“Fox Infused”), entered into an Intellectual Property License and Supply Agreement effective July 1, 2022 (the “Agreement”) whereby NeOnc agreed to supply certain products to Fox Infused and license certain of our patents. We terminated the Agreement with Fox Infused on April 25, 2023. On June 6, 2023, Fox Infused filed a complaint against NeOnc in the Central District of California alleging that the termination was improper (Civil Action No. 2:23-04431). Fox Infused also filed an ex parte application for a temporary restraining order and an order to show cause on a preliminary injunction against us seeking to have the court stop the termination of the contract. Fox Infused’s temporary restraining order application was denied and the case dismissed without prejudice. Fox Infused refiled the case in arbitration before the American Arbitration Association (Case No. 01-23-0002-5020). On October 16, 2023, the parties engaged in settlement discussions, and agreed to settle the dispute for a $600,000 payment by us to Fox Infused within 5 business days of the closing date of the Company’s initial public offering or March 31, 2024.
On March 31, 2024, Fox Infused agreed to extend the payment until May 15, 2024 for payment of an additional $25,000. The Company did not make the payment and on July 25, 2024 the arbitrator granted interest at the statutory rate of 10% per annum on the unpaid balance commencing May 15, 2024. The Company remained in default through December 31, 2025, with the total obligation, including accrued interest, included in litigation settlement payable in the accompanying consolidated balance sheets. Fox Infused initiated default proceedings against the Company, which resulted in direct and indirect costs to us in defending and responding to such proceedings. In March 2026, the Company satisfied this obligation by paying the settlement amount plus accrued interest of $737,929.
Item 4. Mine Safety Disclosures
Not applicable.
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Part II