PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Except as set forth below, we know of no material, existing or
pending, legal proceedings against our Company, nor are we involved
as a plaintiff in any material proceeding or pending litigation.
There are no proceedings in which any of our directors, officers or
affiliates, or any registered or beneficial stockholder, is an
adverse party or has a material interest adverse to our
interest.
On December 17, 2019, GreenPower Motor Company Inc., a public
company incorporated under the laws of British Columbia
(“GreenPower”), of which Phillip W. Oldridge, the Company’s Chief
Executive Officer and Chairman of the Board, and a member of its
board of directors, previously served as a senior officer and a
member of its board of directors, filed a notice of civil claim,
captioned GreenPower Motor Company Inc. v. Phillip Oldridge et al.,
Action No.
S-1914285,
in the Supreme Court of British Columbia, against Phillip Oldridge,
his trust, EVTDS and certain other companies affiliated therewith.
The notice of civil claim alleges that Mr. Oldridge breached
certain fiduciary duties owed to GreenPower by working with certain
parties in direct competition with and at the expense of
GreenPower. GreenPower alleges that the Company conspired with
Mr. Oldridge to build its business, competing products and
unfairly compete with GreenPower. GreenPower seeks general damages,
special damages and punitive damages, plus interest and costs
against EVTDS. On February 2, 2020, the Company and the other
companies affiliated therewith named in the notice of civil claim
filed a response to the civil claim in which they denied certain of
the allegations and asserted that certain other facts were outside
of their knowledge. Fact discovery, through document disclosure and
examinations for discoveries, in this matter remain ongoing. We
believe that the lawsuit is without merit and intend to vigorously
defend the action.
On or about July 18, 2021, GreenPower and GP Greenpower
Industries Inc., (collectively “the GreenPower entities”) filed a
counterclaim against David Oldridge, Phillip Oldridge, the Company
and other companies in Supreme Court of British Columbia Action No.
S207532. The counterclaim alleges that David Oldridge, Phillip
Oldridge, the Company and other companies committed the tort of
abuse of process by causing 42 Design Works Inc., to commence a
lawsuit against the GreenPower entities. Additionally, GreenPower
entities also advanced claims against David Oldridge, Phillip
Oldridge, the Company and other companies for conspiracy. The
pleadings in this lawsuit have not closed and we intend to
vigorously defend the counterclaim.
On February 8, 2022, GreenPower Motor Company, Inc., a
Delaware Corporation, and GreenPower Motor Company Inc., a Canadian
Corporation, filed a complaint captioned GreenPower Motor Company,
Inc. v. Philip Oldridge, et al., Case No.
in the United States District Court for the Central District of
California. The complaint names the Company and the following
affiliated entities, officers, or directors: Phillip Oldridge,
Envirotech Electric Vehicles Inc., Envirotech Drive Systems
Incorporated US, Envirotech Drive Systems Incorporated Canada, Sue
Emry, David Oldridge, S&P Financial and Corporate Services,
Inc. GreenPower also named the Philip Oldridge Trust and a
purported entity called EVT Motors, Inc., but has since dismissed
those parties. The complaint alleges (i) RICO violations,
(ii) conspiracy to commit RICO violations, (iii) breach
of fiduciary duties, (iv) breach of an employment contract,
(v) conversion of GreenPower property, (vi) violation of
the Defend Trade Secrets Act, and violations of California’s
Business and Profession Code. The complaint seeks an undisclosed
amount of compensatory and punitive damages, injunctive relief to
prevent the alleged anti- Competitive behavior, restitution for
harm, an award of treble damages, and associate fees and costs. The
complaint’s allegations are centered around the same assertions in
the pending Canadian litigation.
On May 10, 2022, the Company, together with other defendants, filed
a Motion to Dismiss and/or Stay the lawsuit pending the outcome of
the Canadian litigation. Hearing on this Motion set for October 7,
2022. We believe that the lawsuit is without merit and intend to
vigorously defend the action.
On August 23, 2018, a purported class action lawsuit captioned
M.D. Ariful Mollik v. ADOMANI, Inc. et al., Case No. RIC 1817493,
was filed in the Superior Court of the State of California for the
County of Riverside against us, certain of our executive officers,
Edward R. Monfort, the former Chief Technology Officer and a former
director of ADOMANI, Inc., and the two underwriters of our offering
of common stock under Regulation A in June 2017. This complaint
alleges that documents related to our offering of common stock
under Regulation A in June 2017 contained materially false and
misleading statements and that all defendants violated
Section 12(a)(2) of the Securities Act, and that we and the
individual defendants violated Section 15 of the Securities
Act, in connection therewith. The plaintiff seeks on behalf of
himself and all class members: (i) certification of a class
under California substantive law and procedure;
(ii) compensatory damages and interest in an amount to be
proven at trial; (iii) reasonable costs and expenses incurred
in this action, including counsel fees and expert fees;
(iv) awarding of rescission or recessionary damages; and
(v) equitable relief at the discretion of the court.
Plaintiff’s counsel has subsequently filed a first amended
complaint, a second amended complaint, a third amended complaint,
and a fourth amended complaint. Plaintiff Mollik was replaced by
putative class representatives Alan K. Brooks and Electric
Drivetrains, LLC. Alan K. Brooks was subsequently dropped as a
putative class representative. On October 27, 2020, we
answered the fourth amended complaint, generally denying the
allegations and asserting affirmative defenses. On November 5,
2019, Network 1 and Boustead Securities (together the
“Underwriters”) filed a cross-complaint against the Company seeking
indemnification under the terms of the underwriting agreement the
Company and the Underwriters entered for the Company’s initial
public offering (the “Underwriting Agreement”). On
December 10, 2019, the Company filed its answer to the
Underwriters’ cross-complaint, generally denying the allegations
and asserting affirmative defenses. Also on this date, the Company
filed a cross-complaint against the Underwriters seeking
indemnification under the terms of the Underwriting Agreement. On
January 14, 2020, Mr. Monfort filed a cross- complaint
against the Underwriters seeking indemnification under the terms of
the Underwriting Agreement. On January 15, 2020,
Mr. Monfort filed a cross-complaint against the Company
seeking indemnification under the terms of the Company’s Amended
and Restated Bylaws and Section 145 of the Delaware General
Corporation Law. On February 18, 2020, we filed an answer to
Mr. Monfort’s cross-complaint, generally denying the
allegations and asserting affirmative defenses.