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Contingencies
3 Months Ended
Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Contingencies

Note 11 – Contingencies

 

Legal Proceedings

 

From time to time, the Company may become involved in lawsuits and other legal proceedings that arise in the course of business. Litigation is subject to inherent uncertainties, and it is not possible to predict the outcome of litigation with total confidence. The Company is currently not aware of any legal proceedings or potential claims against it whose outcome would be likely, individually or in the aggregate, to have a material adverse effect on the Company’s business, financial condition, operating results, or cash flows, other than those described below.

 

Anthony Davis v. YayYo, Inc., and Ramy El-Batrawi: No 20STCV09143

Robert Vanech v. YayYo, Inc., and Ramy El-Batrawi, No. 21STCV45724

 

These two cases raise similar claims against the Company and Ramy El-Batrawi, the founder and former chief executive officer of the Company, by two former executives who worked briefly for the Company in 2016-17. The Davis complaint was filed on March 5, 2020, in the Los Angeles Superior Court by plaintiff Anthony Davis, who was hired by the Company as its chief executive officer and director on or about December 2016. Mr. Vanech was hired as chief financial officer and director at approximately the same time. Both Messrs. Vanech’s and Davis’s employment with the Company ended after several months. As part of their compensation, Messrs. Davis and Vanech allege that they expected to receive stock options in the Company. In their respective pleadings, both Messrs. Davis and Vanech admit that each person resigned from their executive officer and director positions but assert that they did not receive certain compensation in the form of stock options. The Company denies liability and has asserted that it has paid Messrs. Davis and Vanech all amounts due to them under their respective employment agreements/settlement agreements, while also asserting that both Messrs. Davis and Vanech failed to exercise their respective stock options before they expired on December 31, 2018. The Company filed a demurrer to each plaintiff’s amended complaint, which the Superior Court granted in part and denied in part. Plaintiff Davis has since filed a second amended complaint on October 8, 2021, to which the Company has filed an answer. The Company’s position is that the lawsuits entirely lack merit, and the Company intends to defend each case vigorously. Plaintiffs have now filed a motion to consolidate the two actions-based similarity of the facts (and defenses) and that motion is pending. The cases, whether consolidated or not, are expected to go to trial later in 2023 and will be decided in two bench trials or pursuant to summary judgement.

 

The Company’s position as to both lawsuits is that Messrs. Davis’ and Vanech’s claims entirely lack merit, and the Company intends to defend against the lawsuits vigorously.

 

Zada v. EVMO, Inc and Rami El-Batrawi, Los Angeles Superior Court No. 21STCV43510

 

On November 29, 2021, a complaint was filed by Norman Zada, a Company shareholder, against EVmo and Mr.El-Batrawi alleging breach of contract and fraud in connection with the plaintiff’s purchase of 20,000 shares of Common Stock in February 2018 that the plaintiff claims he did not receive for over three years. By the time the plaintiff was able to acquire the 20,000 shares, the value of the stock had dropped to $1.90 per share. By virtue of the allegedly late delivery of shares, the plaintiff alleges damages of approximately $94,420. Other allegations of wrongdoing on Mr. El-Batrawi’s behalf are included in the complaint but add nothing of a material nature to the legal dispute. Both Mr.El-Batrawi and EVmo presently intend to file demurrers to the Complaint and, if necessary, vigorously defend the lawsuit on the merits.