Note 13 – Commitments and Contingencies

Pending Litigation

On or about April 13, 2020, Ian Patterson, the Chief Operations Officer of AVX resigned from his position. On May 5, 2020, Mr. Patterson filed an action in the Superior Court for the County of Los Angeles, State of California, against the Company, et al. The complaint alleges claims including discrimination, wrongful termination, retaliation and various other provisions of the California Labor Code, and various other claims under California state law. Trial for this matter is not set, nor has discovery been conducted. AVX intends to contest this matter. Further, AVX disputes that the other defendants are proper parties to the litigation. However, litigation and investigations are inherently uncertain, but the outcome could have a material impact on the Company.

Similarly, on or about April 14, 2020, Devesa Sarria, the Sales and Marketing Director, was terminated. On May 13, 2020, she filed an action in the Superior Court for the County of Los Angeles, State of California. The Complaint alleges claims including discrimination, wrongful termination, retaliation and various other provisions of the California Labor Code, and various other claims under California state law. The complaint seeks unspecified economic and non-economic losses, as well as attorneys’ fees. Trial is set for October 11, 2023. AVX intends to vigorously contest this matter. Further, AVX disputes that the other defendants are proper parties to the litigation. However, litigation and investigations are inherently uncertain, but the outcome could have a material impact on the Company.

On January 19, 2023, the company filed an action in the Superior Court of California, County of San Bernardino against Jaqueline Li. AVX Design and Integration pre-paid for equipment toward a joint project with her father Jeffrey Li. Payment was made to Jaqueline’s father’s company Sing Young Music, while no goods or services were ever received. Upon death, Jacqueline Li distributed assets from the business Sing Young Music without consideration toward the business entity or any formation of an estate for Jeffrey Li. We attended the trial on March 17, 2023 to represent our side of the case and are awaiting judgement from the court.