Item 3. Legal Proceedings
Item 3. Legal Proceedings.
In 2014, Avra Surgical Robotics, Inc., a Delaware
corporation (“ Avra Surgical ”), of which Barry F. Cohen, our Chief Operating Officer – Americas and a director,
was Chief Executive Officer, a director and a principal stockholder, got into a dispute with the law firm of Quinn Emmanuel Urquhart &
Sullivan LLP (“ Quinn Emmanuel ”) over legal fees allegedly due Quinn Emmanuel. Avra Surgical, which was seeking to develop
a robotic surgery system using certain technology developed in Germany by then had ceased operations. These events occurred prior to the
formation of the Company as Avra Medical Robotics, Inc. Other than the facts that both Avra Surgical and our Company shared the Avra name
and that Mr. Cohen was an officer, director and principal stockholder of both companies, there was no relationship between the two companies.
On May 26, 2020, Quinn Emmanuel filed a petition
in the Supreme Court of the State of New York, New York County against Avra Surgical, the Company (then known as Avra Medical Robotics,
Inc.), Barry F. Cohen, Jared B. Stamell, an attorney affiliated with Avra Surgical and various individuals who at that time were or had
been affiliated with Avra Surgical and or the Company (collectively, “ Respondents ”). The petition sought to recover
the legal fees from the Respondents on the basis that they were “alter egos” of Avra Surgical. Other than the commonality
of the Avra name and Mr. Cohen having been an officer, director and principal stockholder of both companies, there was no relationship
between the two companies.
As the Company and Mr. Cohen never received notice
of filing of the petition or of subsequent proceedings (although Quinn Emmanuel filed affidavits with the Court stating that they had
been duly served), neither the Company nor Mr. Cohen entered an appearance in the matter.
The Company recently learned from a third party
that in November 2020, the Court had rendered a decision holding that the Company and Messrs. Cohen and Stamell were “alter egos”
of Avra Surgical and therefore were liable for payment of the Quinn Emmanuel legal fees. In addition, the Company also recently learned
that in December 2023, the Court ordered the entry of a judgment against Avra Surgical, the Company and Messrs. Cohen and Stamell in the
amount of $296,000 plus interest from November 2020.
The Company is currently evaluating its legal
options with respect to the matter. Notwithstanding the foregoing, Mr. Cohen and the Company have entered into an Indemnification Agreement,
pursuant to which Mr. Cohen has agreed to fully indemnify the Company for any damages and costs (including legal fees) it incurs in connection
with the action.
Other than the foregoing, there are no legal proceedings
currently pending or threatened against us. However, from time to time, we may become involved in various lawsuits and legal proceedings
which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in any such matter
may harm our business.
Item 4. Mine Safety Disclosures.
Not applicable.
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PART II
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.