Item 3. Legal Proceedings
ITEM
3. LEGAL PROCEEDINGS
As of the filing date of this Annual Report on Form 10-K, there are no material pending legal proceedings. From time
to time, we may be involved in ordinary routine litigation incidental to our business, to which we are a party or which our property is
the subject. In addition, none of our officers, directors, affiliates or 5% stockholders (or any associates thereof) is a party adverse
to us, or has a material interest adverse to us, in any material proceeding.
Currently
Pending Litigation
In
April 2021, Eric Marquez, the former Secretary/Treasurer and Chief Financial Officer of the Company, and certain other plaintiffs, filed
a lawsuit against Cipherloc Corporation, our predecessor, and Michael De La Garza, Cipherloc’s former Chief Executive Officer and President, in the
20 th Judicial District for Hays County, Texas (Case No. 20-0818). The lawsuit alleges causes of action for fraud against Mr.
De La Garza (for misrepresentations allegedly made by Mr. De La Garza); breach of contract, for alleged breaches of Mr. Marquez’s
alleged oral employment agreement, which Mr. Marquez claims required Cipherloc pay him cash and shares of stock; unjust enrichment; quantum
meruit; and rescission of certain stock purchases made by certain of the plaintiffs, as well as declaratory relief and fraud. Damages
sought exceed $1,000,000. The Company believes Cipherloc made all required payments and delivered the stock to the plaintiffs. The case
is currently being defended by the Company. The Company believes it has meritorious defenses to the allegations, and the Company intends
to continue to vigorously defend against the litigation.
ITEM
4. MINE SAFETY DISCLOSURES
Not
applicable.
37
PART
II
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