LEGAL PROCEEDINGS
−Removed: In the ordinary course of business, from time to time we become involved in legal claims and litigation.
−Removed: In the opinion of management, based on consultations with legal counsel, the disposition of litigation currently pending against us is unlikely to have, individually or in the aggregate, a materially adverse effect on our business, financial position, or results of operations.
+Added: From time to time, the Company becomes involved in legal claims and litigation in the ordinary course of business.
+Added: The Company routinely assesses all its litigation and threatened litigation as to the probability of ultimately incurring a liability, and records its best estimate of the ultimate loss in situations where it assesses the likelihood of loss as probable.
+Added: With the exception of the matter described in detail below, in the opinion of management, based on consultations with legal counsel, the disposition of litigation currently pending against the Company is unlikely to have, individually or in the aggregate, a materially adverse effect on the Company’s business, financial position, results of operations, or cash flows.
+Added: On February 16, 2024, counsel to Lori Goldstein, a brand spokesperson for the Company, advised the Company that the Company was in material breach of the Asset Purchase Agreement dated March 31, 2021 (the “Asset Purchase Agreement”) by and among Gold Licensing LLC (“Gold” and, together with Xcel, the ”Xcel Parties”), a subsidiary of the Company, and Lori Goldstein and Lori Goldstein, Ltd.
+Added: (“LG Ltd” and, together with Lori Goldstein, the “LG Parties”) for failure to pay $963,642 earned in 2023 in accordance with the earn-out provisions of the agreement.
+Added: The Company does not dispute the amount of the Lori Goldstein earn-out that was achieved in 2023, and advised Ms.
+Added: Goldstein that due to the alleged breaches described below, the Company was not willing to pay this amount at such time.
+Added: The Company subsequently paid approximately $241,000 of the earn-out payment.
+Added: On May 2, 2024, the Xcel Parties made a written demand for arbitration and commenced an arbitration proceeding against the LG Parties for, among other things, alleged breaches of the Asset Purchase Agreement and alleged breaches of Ms.
+Added: Goldstein’s employment agreement with the Company.
+Added: The Company is seeking compensatory damages and consequential damages.
+Added: Additionally, on May 2, 2024, the Company terminated the employment agreement and the consulting agreement between the Company and LG Ltd.
+Added: The parties are negotiating to resolve all outstanding disputes and, if an agreement is reached, it may include, among other things, a disposition of the Lori Goldstein brands and related assets to LG Ltd.
+Added: By agreement between the Company and Ms.
+Added: Goldstein, while negotiations continue, Ms.
+Added: Goldstein is continuing to comply with her material obligations to QVC.
+Added: There can be no assurance that these disputes will be resolved in a manner favorable to the Company or at all.
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.