Cafe Serendipity Holdings Inc. (CAFS)

[funnyG986]

Found the reason why FOFU is down here.

On May 23, 2011, the Company received a complaint from Oscar Luppi, former Chairman,
President, Chief Executive Officer, and Treasurer of the Company. The complaint seeks
contractual damages in the amount of $1,142,739, or alternatively the fair value of services of
plaintiff of $413,973, or greater, plus interest. The principal causes of action are breach of
contract; and, common count for services rendered arising out of claims for allegedly unpaid
wages and future wages. As of July 31, 2013, the Company had accrued $433,446 related to Mr.
Luppi’s service to the Company which is recorded as accrued officers’ salaries on the
accompanying balance sheet. On May 27, 2014, case number 30-2011-00477347 in the Superior
Court of California for the County of Orange was settled Ex Parte ordering the approval
settlement agreement between the parties. As a result of the settlement of this complaint, the
Company recorded a note payable for approximately $1,492,650, relieved the $433,446 accrued
officers salary liability related to Luppi, recognized $168,791 in interest expense, and recorded a
loss on settlement of debt of approximately $890,413.