>>As previously disclosed, the Company and certain of its directors and officers have been engaged in litigation in Delaware concerning 2020 option grants since 2022 (the “Delaware Action”). In mid-September 2025, the parties to the Delaware Action engaged in mediation of all claims. On October 9, 2025, the Company entered into an agreement with Lead Plaintiff F. Glenn Schaeffer (“Plaintiff”) for settlement of the Delaware Action. The agreement was set forth in a binding Term Sheet, and was the culmination of approximately a year of negotiations. Under the terms of the agreement, 17% of the challenged 2020 options will be cancelled, and the Company’s insurance carriers will pay $2.25 million to the Company.
During the mediation process, the Plaintiff filed an amended complaint (filed publicly on October 14, 2025), as the Court had directed the Plaintiff to do in an Order dated February 14, 2025. The claims set forth in the amended complaint are also covered and resolved by the settlement set forth in the Term Sheet.
The parties to the Delaware Action are using their best efforts to complete the definitive settlement documentation. The Company understands that the Plaintiff intends to apply to the Court for an award of attorneys’ fees and expenses in connection with the litigation. The settlement and any award of fees and expenses are subject to approval by the Court. Under the terms of the settlement, the cash payment to the Company from the Company’s insurers is not to be used for any payment of a fee award. It is currently anticipated that the fee award will be paid separately by the Company’s insurers.
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