Adaptive Medias Inc (fka ADTM)

[236T568]

Legal Proceedings

In July 2013, the Company became aware that a default judgment had been entered against it in favor of Mario Armando Wilson and against the Company in the amount of $62,000. The Company is investigating the circumstances under which the judgment was entered, and reserves all rights to challenge the propriety of the judgment. As of December 31, 2013, the Company has accounted for approximately $35,000 being owed to Mr. Wilson.

The Company is in an arbitration case entitled Felix Chan v. Mimvi, Inc., pending in the American Arbitration Association, filed November 25, 2013. The claimant, Felix Chan, asserts that the Company is obliged to pay him $174,000 for services as an independent contractor of the Company. No discovery has taken place. The Company intends to vigorously defend the case. The outcome is uncertain.

In July 2013, the Company was threatened with legal action by Eric Rice, a former employee. On September 20, 2013, Mr. Rice sued the Company (Rice v. Mimvi, etc., et al., LASC No. LC100816, Van Nuys Superior Court). The complaint alleges that the Company breached Mr. Rice's employment agreement and made misrepresentations when the Company terminated Mr. Rice. The complaint does not specify the amount of alleged damages. The Company denies any breach or misrepresentation, and the Company denies that it owes Mr. Rice anything. The Company moved to strike portions of the complaint, and the Company's substantive response to the complaint is not yet due. The Company is exploring a counter-claim related to a prior transaction in which Mr. Rice was involved.

On July 29, 2013, Khoi Senderowicz filed a lawsuit against the Company and two other individuals, Andrew Linton and Kasian Franks (Senderowicz v. Franks, etc., et al., Case No. RG13689457, Alameda County Superior Court). The suit alleges breach of an oral lease and alleged damages to property. The complaint was only recently served, and the Company's response to the complaint is not yet due. The Company denies that it breached any alleged oral lease or caused any damage, and the Company denies that it owes the plaintiff anything. Discovery has not yet commenced.

In April of 2014, the Company became aware that a lawsuit was filed against the Company in the Superior Court of Santa Clara County, California by Amanda Besemer, who was an Advisory Board member from 2010-12. The Company's response to the complaint is not yet due. The Company denies that it owes the plaintiff anything.


http://www.sec.gov/Archives/edgar/data/1428397/000114420414022306/v373942_10k.htm