Item 8.01. Other Events.
On September 4,
2007, Ekistics Research, LLC (“Ekistics”) and Craig Larson refiled a complaint
against VuBotics, Inc. (the “Company”) and certain other parties in the
Superior Court of Fulton County, Georgia.
This complaint is virtually identical to a previous complaint that Mr.
Larson, a former officer and director of the Company, and Ekistics filed and
dismissed without prejudice earlier this year.
Similar to the first complaint, the second complaint alleges, among
other things, that the Company breached its obligation to provide up to
$500,000 for working capital, software development, inventory purchases and
promotion of the QuantumReader software during the 12-month period after the
Company’s acquisition of QuantumReader, Inc. (now a wholly owned subsidiary of
the Company) under the Plan and Agreement of Reorganization dated November 17,
2004 among the Company, Mr. Larson and others.
In the second
complaint, the plaintiffs are seeking monetary damages, as well as an Order
declaring Mr. Larson the owner of a patent application that was the principal
asset of QuantumReader, Inc. when it was acquired by the Company and an
injunction against the Company. At this
time, the Company’s management believes that the lawsuit is without merit, and
the Company intends to show, among other defenses, that it made available well
in excess of $500,000 during the requisite time period in 2004 and 2005.
Today,
QuantumReader, Inc. filed a motion to intervene in the lawsuit along with
pleadings asserting numerous claims against Mr. Larson alleging that he has
willfully interfered with QuantumReader, Inc.’s intellectual property. In addition, QuantumReader, Inc. filed a
motion for a preliminary injunction asking the court to immediately prohibit
Mr. Larson from further interfering with QuantumReader, Inc.’s intellectual
property.
Due to the
inherent uncertainties in litigation, and because the ultimate resolution of
the proceeding is influenced by factors outside of the Company’s control, the
ultimate outcome of this proceeding is uncertain and unpredictable.
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