From time to time in the ordinary course of its business, the Company be involved in legal proceedings, the outcomes of which be determinable. The results of litigation are inherently unpredictable. Any claims against the Company, whether meritorious or could be time consuming, result in costly litigation, require significant amounts of management time and result in diversion of significant resources. The Company is able to estimate an aggregate amount or range of reasonably possible losses for those legal matters for which losses are probable and estimable, primarily for the following reasons: (i) many of the relevant legal proceedings are in preliminary stages and, until such proceedings develop further, there is often uncertainty regarding the relevant facts and circumstances at issue and potential liability; and (ii) many of these proceedings involve matters of which the outcomes are inherently difficult to predict. The Company has insurance policies covering potential losses where such coverage is cost effective.

 

On the Company received notice that the U.S. District Court for the Central District of California (the “Court”) (Case -cv--ODW) issued an order dismissing, with prejudice, a putative class-active lawsuit against the Company. The dismissal relates to an action brought on by a purported shareholder of the Company against the Company and individual defendants: Eric Steen, the Company’s former Chief Executive Officer, President and Director; and Jonathan Foster, the Company’s former Chief Financial Officer. The complaint asserted claims against all defendants under the antifraud provisions of the federal securities laws and against Messrs. Steen and Foster as control persons. On the Company and all defendants filed a Motion to Dismiss the amended complaint. On the Court dismissed the plaintiffs’ amendment to the class action compliant (“FAC”), with leave to amend. On the parties stipulated, and the Court extended, the plaintiffs time to amend the FAC up to As of the plaintiff never filed an amended complaint and the Court dismissed the lawsuit with prejudice on On the plaintiff filed a notice of appeal, on the motion to dismiss, to the Circuit Court of Appeals.

 

The Company is involved in any legal proceedings that the Company believes could have a material effect on the Company’s financial condition, results of operations or cash flows at this time.