The consequences of the lawsuit go beyond the question of culpability. The fact that the situation has been going on so long and hasn't been disclosed raises a lot or questions. The huge increase in professional fees in Q4 2022 and Q1 2023 with the deterioration of their cash during the same periods may indicate a material impact on the balance sheet that surely should have been disclosed.
The June Leonite note is secured by all assets of the company. How does the litigation impact their ability to negotiate this debt obligation. How will this impact the viability of the regulation "A" offering. How is it affecting their ability to secure new loans? They ended Q1 with only $28K in cash with no indication through subsequent events to the filing date that new funding has been secured.
...The obligations of the Borrower under this Note are secured pursuant to the terms of the security and pledge agreement (The "Security and Pledge Agreement" and collectively the Purchase Agreement, the "Related Documents"...