CRIMSON FOREST - Plaintiff's counsel has extended to named Defendants a 21-day extension of time to file a response, based upon improper service. A clerical default against three of four named Defendants will be vacated following the formal motion, including failure to file a Motion for Default, failure to provide evidence of proper (legal) service, failure to notify Defendants and the written agreement by Plaintiff's counsel to HHSE for a 21-day extension as of July 10(providing until August 1 for a responsive filing). HHSE's cross complaint integrates the Crimson claims with the overall merger and financing agreement, and HHSE will seek to enforce the financial terms of the merger agreement, calling for a minimum of $1-million prior to May 15, 2017 (which Crimson did not pay), and additional financial damages of more than $3-million caused to HHSE and HHSE shareholders as a result of Crimson's breach of the merger and financing agreement. Per the terms of the March 8 Merger Agreement, and as filed with the S.E.C., disputes regarding the merger must be adjudicated in California, under California law. Accordingly, HHSE counsel feels that a cross-complaint in the Crimson matter is one of our responsive options - or alternatively, that a separate action can be filed by HHSE against Crimson for their breach of the merger and other acts that otherwise negatively impacted against HHSE (all of the strategic actions and decisions in this matter will occur prior to the August 1st filing date).
