What changed in this filing

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Item 1. Legal Proceedings

2024-05-31 compared with 2023-12-13 · 16 added, 46 removed, 5 unchanged (93% of the section changed)

4 unchanged sentences

in which losses are probable and can be reasonably estimated.

On September 21, 2023, we were served with a complaint

(the “Complaint”) filed in the Supreme Court of the State of New York, County of New York, Commercial Division (the “Court”)

under Index Number 654633/2023, by Joseph Gunnar, LLC, an investment broker-dealer located in New York City (“Gunnar”), and

Lucosky Brookman LLP, the attorneys for Gunnar during the relevant period (collectively the “Plaintiffs”), suing the Company,

Gareth Sheridan (our CEO and a director), Serguei Melnik, (our President and a director),Vitalie Botgros (a stockholder of the Company),

TII Jet Services LDA (an aircraft leasing firm, “Jet Services”) and Wolf Blitz, Inc.

(a consulting company, “Wolf Blitz”),

collectively the “Defendants”.

The Complaint alleges, in multiple counts, damages

resulting from the Company’s termination in or about July 2023 of an April 6, 2023 engagement letter between Gunnar and the Company,

(the “Engagement Letter”), that contemplated a public offering of our common stock to be underwritten and sold by Gunnar as

the sole underwriter.

Subsequently, the Company, due to market conditions and prior to executing an underwriting agreement or similar

commitment as to the terms of the offering with Gunnar, declined to proceed with the offering and accordingly terminated the Engagement

Agreement in July 2023.

The Complaint alleges claims for damages against:

(1) the Company, Gareth Sheridan and Serguei Melnik (the “Company Defendants”) for breach of contract due to the Company’s

failure to proceed with the offering;

(2) the Company Defendants for fraudulently inducing Gunnar to enter into the Engagement Letter;

(3) the Company Defendants for fraudulent statements made in connection with the contemplated offering;

(4) the Company Defendants for

fraudulent concealment of pursuit of alternative financing during the engagement period under the Engagement Letter;

(5) Jet Services,

Vitalie Botgros and Wolf Blitz for tortious interference resulting from discussions concerning alternative financing during the engagement

(6) Jet Services, Vitalie Botgros, and Wolf Blitz for tortious interference with a prospective business opportunity;

(7) the Company

Defendants for negligent misrepresentation;

and (8) against the Defendants other than Jet Services for promissory estoppel as to promises

purportedly made to complete the offering.

Further, Gunnar seeks an award of actual and compensatory

damages in an amount exceeding $500,000, as well as exemplary and punitive damages, while Lucosky Brookman LLP seeks attorneys’

fees, costs and expenses pursuant to indemnification obligations under the Engagement Letter.

Additionally, the Company believes the Engagement

Letter is unenforceable and, even if enforceable, was properly terminated by the Company under the terms of the Engagement Letter and

the market conditions under which the Engagement Letter was terminated.

On or about November 2, 2023, legal counsel for

the Company filed an Answer, Affirmative Defenses and Counterclaims with the Court in response to the Complaint.

The Company vigorously

denied the claims asserted against it and asserted the following counterclaims with their Answer:

Intentional interference with prospective

economic advantage, consumer fraud, breach of fiduciary duty, breach of contract (damages in the amount of $1,000,000 were requested on

each of the preceding counterclaims) and a declaratory judgment affirming that Gunnar’s actions constituted gross negligence or

willful misconduct, and the Company’s termination of the Engagement Letter on such grounds was proper pursuant to its terms.

Plaintiffs have denied the allegations surrounding

the Company’s counterclaims and asserted their own affirmative defenses against the counterclaims, and argue that they have the

right to be reimbursed for attorneys’ fees, costs and expenses incurred in responding to the counterclaims.

The Company is currently a defendant in a lawsuit

initiated by Joseph Gunnar, LLC (“Gunnar”) and Lucosky Brookman LLP (“LB”) in the Supreme Court of the State of

New York, New York County, under Index No.654633/2023.

The lawsuit alleges multiple allegations such as breach of contract, fraudulent

activities, and tortious interference and seeks damages following the Company’s termination of an engagement letter for assistance

with a public stock offering.

Gunnar is seeking over $500,000 in damages plus punitive damages, while LB is demanding reimbursement of

In response, the Company denies all allegations,

alleging that the engagement letter was unenforceable, and its termination was legally justified.

The Company has also initiated counterclaims

against Joseph Gunnar & Co., accusing them of intentional interference and breach of fiduciary duty, and is seeking $1,000,000 for

each claim along with a declaratory judgment affirming the legality and justification of the termination.

The plaintiffs have denied these

counterclaims.

Currently, there are no pending hearings or motions

as both parties are engaged in discovery and are attempting to resolve the matter amicably.

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