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From time to time, we may be involved in legal proceedings arising in the ordinary course of our business.
−Removed: We are currently a defendant in litigation with a former employee in the Court of Common Pleas of Philadelphia County (Commerce Division), or the Court, relating to a claim of breach of contract and violation of the Pennsylvania Wage Payment and Collection Law, or the Claim.
−Removed: The plaintiff claims that, pursuant to an alleged settlement agreement reached on February 3, 2020, we agreed to issue plaintiff 150,000 shares of its common stock and that such shares would not be subject to the reverse stock split implemented by us in connection with our initial public offering on February 14, 2020.
−Removed: The plaintiff’s claim is for an amount in the mid-single digit millions of dollars.
−Removed: We disagree with the allegations that there was ever a binding settlement agreement or that any shares would not be subject to the reverse stock split.
−Removed: In October 2023, the Court denied both our and the plaintiff’s motions for summary judgement and a trial date was set for October 2024.
−Removed: We have vigorously defended against these claims.
−Removed: On October 28, 2024, the Court entered a directed verdict in favor of the Company on the Pennsylvania Wage Payment and Collection Claim, and on October 29, the jury found for the plaintiff in the amount of $1.0 million on the breach of contract Claim, which we have accrued for and recognized in general and administrative expenses for the three and nine months ended September 30, 2024.
−Removed: The jury verdict is subject to post-trial motions and we will consider whether to appeal if our motions are denied and judgment is entered on the verdict.
+Added: We are a defendant in litigation with a former employee, who filed a lawsuit in the Court of Common Pleas of Philadelphia County asserting claims for breach of contract and violation of the Pennsylvania Wage Payment and Collection Law.
+Added: The plaintiff, who was terminated from his employment in 2019, contended that we entered into a binding settlement agreement in February 2020 under which he was to receive shares of company stock and additional compensation.
+Added: Specifically, he contended that before the announcement of our initial public offering in February 2020, he was promised 150,000 shares of stock as part of the settlement, and that those shares were not subject to the reverse stock split that was implemented for all shareholders.
+Added: We responded that the shares offered in settlement negotiations in 2020 were to be subject to the reverse split, and that had the settlement been finalized, the plaintiff would have been entitled to 33,836 shares.
+Added: A trial in this case was held in October 2024.
+Added: The jury found that an agreement was reached, but it agreed with us that any shares to be awarded to the plaintiff were subject to the reverse split.
+Added: The jury awarded damages in an amount that was roughly equal to what we contended had been offered to the plaintiff before the initial public offering.
+Added: Both sides then challenged the verdict, and on December 12, 2024, the judge who presided over the trial delivered a judgment in our favor, finding that no binding agreement was reached and that the plaintiff was not entitled to recover any damages.
+Added: On December 23, 2024, the plaintiff filed an appeal with the Superior Court of Pennsylvania, which is currently pending.
+Added: We intend to continue to defend against this claim.
Other than the above, we are not presently a party to any legal proceedings that, in the opinion of management, would, if decided against us, have a material adverse effect on our business.
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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.