Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet of a Registrant
Commitments and Litigation
In March 2018, Robert Hainey filed a civil case in Kent County Superior Court, Rhode Island against Start Scientific, Inc. claiming breach of contract related to funds invested in Start Scientific in 2017 for which shares had not been issued. By mutual agreement of the parties, the case was withdrawn, and settlement negotiations were entered into.
In spite of the obligation to issue the shares purchased, management did not previously disclose the shares to be issued or the existence of the pending litigation. Current management, in discussion with the Companys auditors will record the total liability and penalties in the financial statements for the year ended December 31, 2018, and disclose the above referenced settlement, and its impact in the reported financial statements which are being completed at this time.
The disclosures and financial statements will include the following information:
In March 2020, the parties reached final agreement regarding the terms and filed an Agreed Judgment on March 16, 2020 in the District Court of Oklahoma County, Oklahoma (where the corporate office of Start Scientific was domiciled). Under the terms of the Agreement:
·Defendant, Start Scientific, Inc., shall pay to Plaintiff (Hainey) $450,000, the amount required to reimburse the initial investment plus liquidated damages;
·Defendant, Start Scientific, Inc., shall pay to Plaintiff (Hainey) $25,000, for Plaintiffs attorney fees and costs;
·Defendant, Start Scientific, Inc., shall pay to Plaintiff (Hainey) one hundred (100) shares of Series A preferred stock in Start Scientific, Inc.
·Plaintiff has agreed , in consideration of the terms set forth herein, to release the claims against Defendant as asserted in Plaintiffs Petition.