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As Usio executives, Kauder and Pioletti were afforded access to and contributed to the development of Usio’s trade secrets and other proprietary information not generally known by the public at large, including but not limited to financial information, marketing plans, cost and operational/strategic plans, and sales presentations.
−Removed: In May 2021, Kauder resigned from Usio followed by Pioletti in July of 2022.
−Removed: Thereafter, Kauder and Pioletti formed Triple Pay Play, another payment processing company which competes with the same services as Usio.
+Added: In May 2021, Kauder resigned from Usio followed by Pioletti in July 2022.
+Added: Thereafter, Kauder and Pioletti formed Triple Pay Play, another payment processing company which directly competes with Usio.
Upon information and belief, Kauder and Pioletti were working to form Triple Pay Play while employed by Usio, during Usio business hours, and while using Usio resources and Usio property.
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The motion was granted.
−Removed: Subsequently, in February of 2024, Usio refiled its case in Tennessee, where Kauder, Pioletti, and Triple Pay Play reside.
+Added: Subsequently, in February 2024, Usio refiled its case in Tennessee, where Kauder, Pioletti, and Triple Pay Play reside.
On May 3, 2024, Kauder, Pioletti and Triple Pay Play filed a Motion to Dismiss Usio’s Complaint;
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On November 13, 2023, GBC filed lawsuit against Usio, alleging violations of the National Automated Clearing House Association (NACHA) rules in the State of Rhode Island Kent Superior Court.
−Removed: In early March of 2024, Usio filed a Motion to Dismiss for improper venue and failure to state a claim.
+Added: In early March 2024, Usio filed a Motion to Dismiss for improper venue and failure to state a claim.
On May 20, 2024, Usio’s Motion to Dismiss was heard in the State of Rhode Island Kent Superior Court.
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The lawsuit alleges that due to a mistake, accident, or inadvertence, certain customer deposits in the amount of $317,000 were improperly transferred to us.
+Added: We believe that plaintiff's claims contradict the express terms of the asset purchase agreement, and we intend to continue to vigorously defend this matter.
+Added: As a result of this post-sale dispute, we subsequently discovered that KDHM, LLC and its principals made certain misrepresentations and breached the terms of the asset purchase agreement.
On September 28, 2021, we filed an answer generally denying the plaintiff’s allegations.
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KDHM and third-party defendants, its principals Henry Minten and Thomas Dowe, affirmatively represented and warranted in section 3.1(e) of the asset purchase agreement that “[t]he Annual Financial Statements and the Interim Financial Statements have been prepared from the books and records of Seller in accordance with GAAP applied on a consistent basis.”
−Removed: We also discovered that KDHM by and through its principals failed to disclose that $305,000 in additional customer deposits existed and that these deposits were not conveyed to us as required by the asset purchase agreement.
−Removed: KDHM, Minten and Dowe provided us with fraudulent and misleading financial statements that did not disclose these additional customer deposits.
+Added: We subsequently discovered that KDHM by and through its principals failed to disclose that $305,000 in additional customer deposits existed and that these deposits were not conveyed to us as required by the asset purchase agreement.
+Added: We believe that KDHM, Minten and Dowe provided us with fraudulent and misleading financial statements that did not disclose these additional customer deposits.
KDHM and the defendants do not dispute that these additional customer deposits existed and that they were purchased by Usio.
However, despite a written representation that these funds would be returned, KDHM and its principals have held these funds hostage.
−Removed: Section 2.1(b)(x) of the asset purchase agreement provides that the purchased assets include “All of Seller’s deposits from its customer, including without limitation, those customer deposits listed on Schedule 2.1(b)(xi) of the Disclosure Schedules.” Finally, we discovered that KDHM did not provide us with all customer lists, which are identified as purchased assets under the agreement.
−Removed: In our counterclaims and third-party petition, we have asserted causes of action for fraud, breach of contract and conversion.
−Removed: On August 18, 2023, the judge granted a summary motion entitling KDHM to deposits for customer accounts that were printed and mailed prior to the acquisition, and Usio Output Solutions, Inc.
−Removed: was entitled to deposits for accounts that were not yet printed and printed but not yet mailed prior to the acquisition.
+Added: Section 2.1(b)(x) of the asset purchase agreement provides that the purchased assets include “All of Seller’s deposits from its customers, including without limitation, those customer deposits listed on Schedule 2.1(b)(xi) of the Disclosure Schedules.” Finally, we discovered that KDHM did not provide us with all customer lists, which are identified as purchased assets under the agreement.
+Added: On August 18, 2023, the judge granted a summary motion entitling KDHM to deposits for customer accounts that were printed and mailed prior to the acquisition, and Output Solutions was entitled to deposits for accounts that were not yet printed and printed but not yet mailed prior to the acquisition.
Usio has requested a reconsideration of the motion, as it does not consider that deposits are only owed to KDHM if they were earned and offset against accounts receivable.
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On July 12, 2024, we filed an appeal on the lower court's decision, which is pending review.
−Removed: We believe that plaintiff's claims contradict the express terms of the asset purchase agreement, and we intend to vigorously defend this matter.
−Removed: As a result of this post-sale dispute, we subsequently discovered that KDHM, LLC and its principals made certain misrepresentations and breached the terms of the asset purchase agreement.
+Added: We have not recorded a contingency in relation to this case, as we consider the risk of lose remote as related to this lawsuit.
OTHER PROCEEDINGS
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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.