Item
8.01 Other Events.
The
applicable information set forth in Item 3.01 and Item 5.02 of this Current Report is incorporated by reference in this Item 8.01.
Incorrect
Disclosures
On
July 14, 2022, Ms. King, without authorization and in disregard of legal advice, filed a Current Report on Form 8-K (the “July
14 Form 8-K”) and issued a Press Release (the “July 14 Press Release” and, together with the July 14 Form 8-K, the
“July 14 Incorrect Disclosures”) that incorrectly stated Ms. King and Mr. Farnsworth were appointed as the Company’s
Co-CEOs, effective as of July 8, 2022. The Company did not authorize the July 14 Incorrect Disclosures and determined that the Board
meeting held on July 8, 2022 was neither properly noticed nor conducted in accordance with the Company’s Bylaws and the July. Therefore,
any business conducted and decisions made at such meeting were invalid and the information contained in the July 14 Incorrect Disclosures
was incorrect.
On
July 22, 2022, the Company filed a Current Report on Form 8-K that was signed by Mr. Farnsworth (the “Incorrect July 22 Form 8-K”
and, together with the July 14 Incorrect Disclosures, the “Incorrect Disclosures”). The Incorrect July 22 Form 8-K filed
by Mr. Farnsworth did not correct the July 14 Incorrect Disclosures and failed to disclose the actions taken by the Board at the July
17, 2022 meeting where, among other things, John Colucci was appointed as Interim CEO.
Since
Mr. Colucci was appointed as Interim CEO on July 17, 2022, the Company was under an obligation to file a Current Report on Form 8-K disclosing
such event by 5:30 PM on July 21, 2022 (the “Deadline”). At the express direction of the Company’s Board of Directors,
on July 21, 2022, the Company attempted to file the required Current Report on Form 8-K that corrected the Incorrect Disclosures and
disclosed the appointment of Mr. Colucci as Interim CEO. However, the filing of these corrective and required disclosures was directly
blocked by Mr. Farnsworth, Ms. King and Mr. Noble prior to the Deadline.
On
July 22, 2022, Mr. Farnsworth, without the knowledge of the Company’s directors and other officers, filed the Incorrect July 22
Form 8-K.
The
Company’s current officers consist of John Colucci, Interim Chief Executive Officer, Philip Jones, Chief Financial Officer and
Stephen Garrow, Chief Operating Officer.
Litigation
Against the Farnsworth Group
On
August 3, 2022, the Company filed a lawsuit against each of Ted Farnsworth, Lisa King, Rod Vanderbilt and Erik Noble (collectively, the
“Farnsworth Group”) in the District Court of Clark County, Nevada (Case No: A-22-856404-B) alleging four causes of action,
including: (i) breach of fiduciary duty, (ii) aiding and abetting breach of fiduciary duty, (iii) civil conspiracy and (iv) declaratory
and injunctive relief in the event that no other legal remedy is available to the Company (the “Nevada Litigation”).
In
connection with the Nevada Litigation, on August 4, 2022, the Company filed an Emergency Motion for Temporary Restraining Order and Preliminary
Injunction (the “Emergency TRO”), whereby the Company requested the Nevada court to enforce an order that would, among other
things, require the members of the Farnsworth Group to, among other things, acknowledge their July 24, 2022 terminations.
On
August 5, 2022, the District Court Judge granted an Ex Parte Order Granting Plaintiff Vinco Ventures, Inc.’s Emergency Motion for
Temporary Restraining Order and Preliminary Injunction (the “NV Court Order”) whereby the Company secured the Emergency TRO.
Pursuant to NV Court Order, for the duration of the Emergency TRO, the members of the Farnsworth Group are (i) enjoined from holding
themselves out internally or externally as employed by the Company or acting on its behalf in any capacity; (ii) enjoined from accessing
Company’s premises or servers; and (iii) required to relinquish control, or to direct those persons working with or under them
to relinquish control, over the Company’s SEC filing passcodes and cooperate to return SEC codes to the Company’s dominion
and control under John Colucci and return all Company personal devices, passwords, servers, documents (whether in paper or electronic
format), payment and payroll systems, and emails and email servers related to any business of the Company and its affiliates.
Prior
to commencing the Nevada Litigation and obtaining the Emergency TRO against the Farnsworth Group, the Company filed a lawsuit against
Mr. Farnsworth and Ms. King in New York State Supreme Court (the “NY Litigation”). The Company was awarded an Order to Show
Cause Seeking Temporary in the NY Litigation that set a hearing on the matter for September 27, 2022 (the “NY Court Order”).
The Company voluntarily discontinued the NY Lawsuit on August 4, 2022.
The
Emergency TRO remains in full force in effect until the conclusion of the hearing scheduled for August 16, 2022 or until otherwise extended
by the Nevada court.
The
foregoing descriptions of the NV Court Order and the NY Court rder are not complete and are qualified
in their entirety by reference to the full text of the NV Court Order and NY Court Order filed as Exhibits 99.3 and 99.4, respectively,
hereto and are incorporated herein by reference