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Item 3. Legal Proceedings

2026-03-20 compared with 2025-03-31 · 32 added, 31 removed, 3 unchanged (95% of the section changed)

1 unchanged sentence

time to time we may be involved in various claims and legal matters arising in the ordinary course of business.

We record loss contingencies for legal matters

when it is both probable that liability will be incurred, and the amount of loss can be reasonably estimated.

Where the reasonable estimate

of a probable loss is a range, we record the most likely estimate of loss within that range.

For the litigation described below, we do

not believe liability is probable and therefore have not accrued loss contingencies for the matter.

However, litigation and other disputes

are inherently unpredictable and subject to substantial uncertainties.

We will reassess our accruals on an ongoing basis taking into account

the procedural stage and developments in the litigation.

The Galinn Fund LLC

On December 5, 2024, the Galinn Fund LLC,

a New York limited liability company (“Galinn”), filed a complaint in Connecticut State Superior Court naming CMC Storrs SPV,

LLC (“CMC”), the holding company for our investment property located at 497-501 Middle Turnpike, Storrs, Connecticut (“497-501

Middle”), as a defendant, alongside Chen Ji, an individual (“Chen”), and two additional entities (the “Guarantors”).

In the complaint Galinn alleges, among other

things, that on May 24, 2024, Chen, on behalf of CMC, executed a mortgage note (the “Note”) in the principal amount of $3.0

million (the “Loan”), which was secured in part by a mortgage against 497-501 Middle (the “Mortgage”).

further alleges that CMC is in default under both the Note and Mortgage for failure to make payments when due.

Galinn is seeking to foreclose

on the Mortgage and damages against CMC and the Guarantors.

In March 2020, when we first acquired an

equity interest in CMC, Chen was an affiliate of the entity, however, he thereafter exited the investment and is no longer in any way

affiliated with or authorized to act on behalf of CMC.

We maintain that the Loan was obtained as a result of Chen’s fraud and Galinn’s

negligence, and had Galinn done adequate due diligence, or reviewed the publicly available filings on the State of Connecticut’s

Business Records website, or even a basic Google search, Chen’s lack of authority would have been readily apparent prior to Galinn

having made the Loan.

We dispute any liability in this litigation,

believe we have substantial defenses to Galinn’s claims, and are vigorously defending the matter.

As of December 31, 2024, neither we nor any of our subsidiaries were subject to any other material legal proceedings.

record loss contingencies for legal matters when it is both probable that liability will be incurred, and the amount of loss can be reasonably

Where the reasonable estimate of a probable loss is a range, we record the most likely estimate of loss within that range.

the litigation described below, we do not believe liability is probable and therefore have not accrued loss contingencies for the matter.

However, litigation and other disputes are inherently unpredictable and subject to substantial uncertainties.

We will reassess our accruals

on an ongoing basis taking into account the procedural stage and developments in the litigation.

of December 31, 2025, we have assessed the litigation described below and concluded that is it neither material nor is any resolution

likely to have a material adverse effect on our business, financial condition or results of operation.

In addition, as of December 31,

2025, neither we nor any of our subsidiaries were subject to any legal proceedings nor were we aware of any legal proceedings threatened

against us or any of our subsidiaries that could be deemed material.

Galinn Fund LLC

December 5, 2024, the Galinn Fund LLC, a New York limited liability company (“Galinn”), filed a complaint in Connecticut

State Superior Court naming CMC Storrs SPV, LLC (“CMC”), the holding company for our investment property located at 497-501

Middle Turnpike, Storrs, Connecticut (“497-501 Middle”), as a defendant, alongside Chen Ji, an individual (“Chen”),

and two additional entities (the “Guarantors”).

For additional details regarding 497-501 Middle, see “ Item 1.

Business—Our Investments—497-501 Middle Turnpike and Cedar Swamp Road – Storrs, Connecticut.

the complaint Galinn alleges, among other things, that on May 24, 2024, Chen, on behalf of CMC, executed a mortgage note (the “Note”)

in the principal amount of $3.0 million (the “Loan”), which was secured in part by a mortgage against 497-501 Middle (the

Galinn further alleges that CMC is in default under both the Note and Mortgage for failure to make payments

Galinn is seeking to foreclose on the Mortgage and damages against CMC and the Guarantors.

March 2020, when we first acquired an equity interest in CMC, Chen was an affiliate of the entity, however, he thereafter exited the

investment and is no longer in any way affiliated with or authorized to act on behalf of CMC.

We maintain that the Loan was obtained

as a result of Chen’s fraud and Galinn’s negligence, and had Galinn done adequate due diligence, or reviewed the publicly

available filings on the State of Connecticut’s Business Records website, or even a basic Google search, Chen’s lack of authority

would have been readily apparent prior to Galinn having made the Loan.

September 15, 2025, CMC filed an amended counterclaim and cross complaint against Chen and Galinn alleging, among other things, fraud,

wrongful conduct, theft, conversion, forgery, slander and violations of the Connecticut Unfair Trade Practices Act, and seeking certain

declaratory relief as well as damages, attorneys’ fees, and costs and expenses related thereto.

dispute any liability in the Galinn litigation, believe we have substantial defenses to Galinn’s claims, and continue to vigorously defend the matter.

Mine Safety Disclosures.

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