Quarterly report pursuant to Section 13 or 15(d)

Legal Proceedings

v3.19.3
Legal Proceedings
9 Months Ended
Sep. 30, 2019
Legal Proceedings [Abstract]  
LEGAL PROCEEDINGS

Note 15 – legal PROCEEDINGS

 

On January 6, 2017, the Company commenced an action in the Supreme Court of New York, County of New York (the "Court"), against RENS Technology, Inc. ("the Purchaser"), RENS Agriculture, the parent company of the Purchaser, and Ren Ren, a principal in both entities and one of our directors, arising from the Purchaser's breach of the agreement under which the Purchaser agreed to invest an aggregate of $20.25 million in the Company in exchange for an aggregate of 3,537,037 shares of its common stock and warrants to purchase an aggregate of 884,259 shares of common stock.

 

On April 11, 2017, the Court issued a decision finding that the Company had demonstrated a likelihood of success on the merits of the breach of contract claim but refused to grant the Company a pre-judgment attachment on shares of the Company's stock owned by the Purchaser.

 

In August 2017, the Company amended its complaint adding several additional claims against RENS Agriculture, Mr. Ren and two additional Chinese defendants, including a claim against RENS Agriculture for breaching the exclusive distribution agreement, as well as claims against all defendants for theft and misappropriation of our confidential proprietary information and trade secrets, breach of fiduciary duty and duty of loyalty, misappropriation of corporate opportunity, unfair competition and a number of other torts. The Purchaser has filed a motion to dismiss the amended complaint, and the Company has filed a motion to compel discovery, both of which are still pending because the parties have agreed to adjourn the hearing date a number of times to negotiate a settlement of the matter. The parties are currently in settlement discussions regarding the matter.

 

The outcome of this matter cannot be determined as of the date of this report.

 

On August 16, 2017, the Purchaser commenced an action in the District Court of Clark County in the State of Nevada against the Company and Joseph Mannello, the Company's then interim Chief Executive Officer, alleging that Mr. Mannello had breached his fiduciary duties and had mismanaged the Company. The action sought monetary damages against Mr. Mannello and the appointment of a receiver over the Company.   The Purchaser filed an application to appoint a receiver, and the Company filed a motion to dismiss the action on various grounds.  On April 11, 2019, the parties filed, and the court entered, a Stipulation and Order of dismissal which dismissed this action in its entirety without the payment of any monetary damages by the Company or Mr. Mannello.