Are you sure that the legal action was not disclosed in the placement term sheet? That would be a serious oversight, because it’s material to the company’s balance sheet.
John Goody has a claim for $1,426,950 plus interest and any further orders of the court, so this could easily represent a $2 million liability. If the Company loses or settles then anyone who put money into the placement could potentially take legal action for the loss.
I would be really surprised if management would make an error like that.
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