Item 3. Legal Proceedings
Item 3. Legal Proceedings.
1. 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 shareholder, had a dispute with Quinn Emmanuel Urquhart & Sullivan LLP (“ Quinn
Emmanuel ”) over legal fees allegedly due to 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 our formation as Avra Medical
Robotics, Inc. Other than the facts that both Avra Surgical and we shared the Avra name and that Mr. Cohen was an officer, director and
principal shareholder 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 us (collectively, “ Respondents ”). The petition sought to recover the
legal fees from the Respondents on the basis that they were “alter egos” of Avra Surgical.
As we and Mr. Cohen never received notice of
the filing of the petition or of subsequent proceedings (although Quinn Emmanuel filed affidavits with the court stating that they had
been duly served), neither we nor Mr. Cohen entered an appearance in the matter.
In early 2024, we learned from a third party
that in November 2020, the court had rendered a decision holding that we 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, we also learned that in December
2023, the court ordered the entry of a judgment against Avra Surgical, us and Messrs. Cohen and Stamell in the amount of $296,000 plus
interest from November 2020.
In 2023, Mr. Stamell appealed the judgement against
him on the basis that Quinn Emmanuel had not presented any evidence to support the finding that Mr. Stamell was an alter ego of Avra
Surgical or that Avra Surgical had transferred any assets to us. The Appellate Division, First Department ruled in favor of Mr. Stamell
and in December 2024 entered an order vacating the judgment against him.
As a result of the foregoing, in April 2025,
Quinn Emmanuel moved to sever Mr. Stamell from the case and for judgement to be reentered against Avra Surgical, Mr. Cohen and us. That
motion was granted on July 22, 2025. In addition, in June 2025, Quinn Emmanuel moved on an ex parte basis to authorize service on Mr.
Cohen and us by email to Mr. Cohen’s email or text to his cell phone. In connection therewith, Quinn Emmanuel alleged that Mr.
Cohen and we had made efforts to evade service. That motion was granted on July 1, 2025. Quinn Emmanuel entered a revised judgment against
Avra Surgical, Mr. Cohen and us on November 13, 2025. We are not aware of any efforts Quinn Emmanuel has undertaken to enforce the judgment
since that time.
Notwithstanding the foregoing, Mr. Cohen
and the Company have entered into an indemnification agreement, pursuant to which Mr. Cohen has agreed to fully indemnify us for any damages
and costs (including legal fees) we incur in connection with the action.
2. In April 2024, an ex-shareholder of Otto Pvt Ltd., an indirect wholly
owned Bahamian subsidiary of the Company (“ Otto ”) commenced litigation in the Bahamas, seeking legal confirmation
that it holds 9,000 shares (approximately a 9% interest) in Otto. The litigation, in which Otto is one of the defendants, relates to a
purported transaction in 2021, at which time Dr. Sudhir Srivastava, our Chairman, Chief Executive Officer and principal shareholder, was
the sole shareholder of Otto. The plaintiff in the litigation alleges that at that time, it acquired the 9,000 Otto shares from Dr. Srivastava.
However, as the plaintiff failed to pay the agreed upon consideration for the shares, in July 2022, the shareholding was cancelled. Dr.
Srivastava along with Otto, has recently filed an action in the Bahamas to confirm the cancellation of the shares and reconfirm their
ownership and both actions are pending in the Bahamian courts. The Bahamian court has issued an interim order to maintain the status quo
as it stands today with respect to the 9,000 Otto shares at the center of the dispute, as well as Otto’s shareholdings in Sudhir
Srivastava Innovations Pvt. Ltd., our Indian operating subsidiary (“ SSI-India ”) and SSI-India’s assets during
the pendency of the litigation. Based on legal opinions obtained from counsel, we believe that there will be a favorable outcome in this
case.
Notwithstanding the foregoing, we have entered
into an Indemnification Agreement with Dr. Srivastava on October 12, 2024, pursuant to which Dr. Srivastava has agreed to fully indemnify
us for any claims, damages and costs (including legal fees) which we incur in connection with this litigation or in relation to any of
his ventures prior to consummation of our acquisition by merger of CardioVentures, Inc. in April 2023.
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.