Item 1. Legal Proceedings
ITEM
1. LEGAL PROCEEDINGS
On
September 11, 2020, a Complaint was filed against the Company’s SMCL subsidiary and various staffing agencies used by SMCL in a
Superior Court of San Bernardino County. The complaint alleges an employee of SMCL committed employment practice violations against a
former temporary employee not employed by us. Management has investigated the allegation and has engaged an employment attorney to defend
the lawsuit. The case is still in discovery and no trial date has been set. The complaint seeks damages estimated to be no less than
$500,000 in money judgement. Management does not believe the claims have merit and does not believe the lawsuit will have a material
adverse effect on our financial results.
24
On
April 29, 2022, a complaint was filed by Tunnel IP LLC against the Company in the U.S. District Court for the Southern District of Florida.
The Complaint alleges that one of the Company’s products, SDL2093, infringes on U.S. Patent No. 7,916,877. On June 24, 2022, Tunnel
IP agreed to dismiss all claims against the Company with prejudice.
As
of this filing, management is not aware of any legal proceedings other than matters that arise in the ordinary course of business.
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