Legal Proceedings
−Removed: As of September 30, 2023, there were no material pending legal proceedings to which the Company is a party or as to which any of its property is subject other than as described below.
+Added: As of March 31, 2024, there were no material pending legal proceedings to which the Company is a party or as to which any of its property is subject other than as described below.
As previously disclosed, the Company, its Chief Executive Officer Andy Heyward, and its former Chief Financial Officer Robert Denton were named as defendants in a putative class action lawsuit filed in the U.S.
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After full briefing of the appeal, a panel of the Court of Appeals held oral argument on the appeal on November 6, 2023, and took the matter under submission.
−Removed: The Company cannot predict the outcome of the appeal or the timing of a decision on the appeal.
+Added: On April 5, 2024, the Appellate Court issued its opinion, affirming in part and reversing in part the decision of the District Court.
+Added: The Appellate Court affirmed the dismissal of certain claims pertaining to Company statements where it found the Plaintiffs failed to adequately plead loss causation, but reversed the lower court’s dismissal of claims related to other Company statements, finding that, in those other instances, the Plaintiffs adequately pleaded loss causation.
+Added: The matter is now remanded to the U.S.
+Added: District Court for the Central District of California for further proceedings on the Plaintiffs remaining claims.
+Added: The Company cannot predict the outcome of the further proceedings upon remand to the District Court.
Related to the securities class action, the Company’s directors (other than Dr.
−Removed: Cynthia Turner-Graham, Michael Hirsh and Stefan Piech), together with Messrs.
+Added: Cynthia Turner-Graham, Stefan Piech and former director Michael Hirsh), together with Messrs.
Heyward and Denton and former director Michael Klein, have been named as defendants in several putative stockholder derivative lawsuits.
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Pursuant to agreements among the parties, the courts in all of the derivative lawsuits have stayed proceedings pending the outcome of the securities class action.
−Removed: The Company cannot predict the impact of the securities class action’s dismissal on the shareholder derivative lawsuits.
−Removed: The Company is also a nominal defendant in an action filed on January 11, 2022, in the U.S.
+Added: The Company cannot predict the impact of the forthcoming decision on the appeal of the dismissal of the securities class action on the shareholder derivative lawsuits.
+Added: As previously reported, the Company is also a nominal defendant in an action filed on January 11, 2022, in the U.S.
District Court for the Southern District of New York and styled Todd Augenbaum v.
Anson Investments Master Fund LP, et al., Case No.
−Removed: 1:22-cv-00249 VM.
+Added: 1:22-cv-00249 AS.
The action, which again purports to be brought on behalf and for the benefit of the Company, seeks the recovery under Section 16(b) of the Exchange Act of supposed short-swing profits allegedly realized by roughly a dozen persons and entities that participated as investors in certain of the Company’s private placements of securities in 2020.
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No Company officer or director is among the defendants.
−Removed: The defendant investors in the action requested and received court permission to file motions to dismiss the action, and motions were filed July 25, 2022, and plaintiff has opposed the motions.
+Added: The defendant investors filed motions to dismiss the action.
After full briefing, the court, by order entered March 30, 2023, granted the motion to dismiss with leave to amend.
Plaintiff subsequently filed his First Amended Complaint on May 1, 2023.
−Removed: Defendants again moved to dismiss and briefing on that motion closed November 2, 2023.
−Removed: On November 9, 2023, Judge Subramanian (to whom the case was reassigned in August
−Removed: 2023) issued an order that, at the first pretrial conference, scheduled to be held on November 16, 2023, the parties are to be in a position to address the motion to dismiss.
−Removed: The Company cannot predict whether the court will decide the motion at that time, take the matter under submission, order additional briefing or argument, or take any other particular action, and we cannot predict the timing of any action.
−Removed: Aside from the motions directed to the pleading, there has been no discovery or other proceedings in the case.
+Added: Defendants moved to dismiss again.
+Added: After full briefing and oral argument, the Court (with a new judge now sitting) denied the motion to dismiss by order entered January 24, 2024.
+Added: Discovery is now open, and Plaintiff has propounded initial document requests to the Defendants, the Company, and multiple third parties including Mr.
+Added: Following formal responses to the discovery requests, meet-and-confer discussions are currently underway concerning the scope of anticipated document productions.
+Added: On February 23, 2024, the Court entered a case scheduling order that contemplates completion of discovery by September 30, 2024, followed by dispositive motions before year-end.
+Added: The Court has not set a trial date.
+Added: As noted, Plaintiff seeks no relief from the Company;
+Added: indeed, the Plaintiff seeks monetary relief for the Company.
+Added: In any event, the Company cannot predict the outcome of the case.
In all of the above-mentioned active proceedings, the Company has denied and continues to deny any wrongdoing and intends to defend the claims vigorously.
The Company maintains a program of directors’ and officers’ liability insurance that, subject to the insurers’ reservations of rights, has offset a portion of the costs of defending the securities class action litigation, and that the Company expects will afford coverage for some costs of the other shareholder litigation should any of those cases proceed.
−Removed: RISK FACTORS.
There have been no material changes to the Risk Factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2023.
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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.