Item 3. Legal Proceedings
Item
3. Legal Proceedings.
On
June 22, 2021, Thomas Seifert’s employment as the Company’s Chief Financial Officer was terminated for cause. Mr. Seifert
asserts that the termination was not for cause and that he is owed compensation payable under his June 2, 2021 employment agreement.
The Company’s position is that Mr. Seifert is not owed any additional compensation relating to his prior service with the Company
or arising under any employment agreement. The Company and Mr. Seifert are currently engaged in litigation over the matter of his employment
and termination. The Company believes it has adequate defenses to Mr. Seifert’s claims and has asserted affirmative claims for
relief against Mr. Seifert including, but not limited to, breach of the employment agreement, breach of his fiduciary duties, fraud in
the inducement in connection with the employment agreement, fraudulent misrepresentation, and constructive fraud. A detailed recitation
of the Company’s factual allegations supporting these claims can be found in the Company’s Second Amended Complaint, filed
June 21, 2022. The Company does not expect to seek substantial monetary relief in the litigation. This dispute is pending before the
District Court for the Southern District of Florida under Case No. 1:21-cv-22436-DPG.
On
July 5, 2022, Mr. Seifert moved to dismiss NextPlat’s Second Amended Complaint, and filed a Counterclaim against the Company and
its Chief Executive Officer, Charles M. Fernandez. In his Counterclaim, Mr. Seifert seeks legal remedies in connection with the Company’s
June 22, 2021, termination of his employment. Mr. Seifert also claims Retaliatory Discharge under Florida’s Private Whistleblower
Act, Defamation, and Negligent Misrepresentation.
The
Company, joined by Mr. Fernandez, moved to dismiss Mr. Seifert’s Counterclaim on July 25, 2022. Mr. Seifert filed a Response in
Opposition on August 8, 2022, and on August 15, 2022, the Company filed a Reply in Support of its Motion to Dismiss.
On
January 9, 2023, the United States Magistrate Judge entered a Report and Recommendation on the Parties Motions to Dismiss. The Magistrate
granted in part and denied in part both Motions. A Status Conference is scheduled for April 2023. The court has not ruled on the report
and recommendation and has not entered an order on either parties’ motion to dismiss.
From
time to time, the Company may become involved in litigation relating to claims arising out of our operations in the normal course of
business. Other than the matter described above, the Company is not currently involved in any pending legal proceeding or litigation,
and to the best of our knowledge, no governmental authority is contemplating any proceeding to which the Company is a party or to which
any of the Company’s properties is subject, which would reasonably be likely to have a material adverse effect on the Company’s
business, financial condition and operating results.
39
Item
4. Mine Safety Disclosures.
Not
applicable.
PART
II
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