SideChannel Inc (SDCH)

[kingfishers]

ITEM 1. LEGAL PROCEEDINGS
We are currently not involved in any litigation exc
ept noted below that we believe could have a materi
al adverse effect on our financial condition
or results of operations. Other than described belo
w, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public
board, government agency, self-
regulatory organization or body pending or, to the
knowledge of the executive officers of our company
or any of
our subsidiaries, threatened against or affecting t
he Company, our common stock, any of our subsidiari
es or of the Company’
s or our
subsidiaries’ officers or directors in their capaci
ties as such, in which an adverse decision could ha
ve a material adverse effect.
On July 5, 2013 the Company filed a complaint for t
he collection of $150,000 of unpaid medical billing
fees that were seriously delinquent.
After many attempts by the Company to begin collect
ions, the Defendants refused to pay the outstanding
balances, however expected the
Company to continue to bill for them. The Company’
s complaint was filed against Krooss Medical Manage
ment Systems, LLC, William F.
Krooss and Marie W. Krooss in the United States Dis
trict Court, District of Nevada Case No. 2013-CV-01
187-ABG-VCF.
On August 13, 2013 Krooss Medical Management System
s et al filed a Complaint in Chancery Court of Rank
in County, Mississippi Case No.
13-1372 as a strategy to keep the collection matter
in Mississippi Chancery Court.
Case No. 13-1372 was remanded to the United States
District Court, Southern District of Mississippi Ja
ckson Division Case No. 3:13CV507-
HTW-LRA.
This litigation is a collection matter of unpaid fe
es by the Defendants and the Company vehemently den
ies the allegations filed in Mississippi
Chancery Court related to this collection matter. T
he Company does not expect the cost to litigate thi
s matter to adversely affect the Company’
s
operations.
ITEM 1A - RISK FACTORS
There were no material changes from the risk factor
s previously disclosed in Part II, Item 1A, “Risk F
actors” in our Annual Report on Form 10-
K for the year ended September 30, 2010 during our
nine months ended June 30, 2011.