Item 1. Legal Proceedings.

The Company and its subsidiaries are involved in various proceedings that are incidental to the normal course of their businesses. As of the date of this report, the Company does not expect that any of such proceedings will have a material adverse effect on the Company's financial position or results of operations.

Notice of dismissal in accordance with Rule 23(e) of the Delaware rules of civil procedure

On April 8, 2024, plaintiff City of Pontiac Reestablished General Employees' Retirement System ("City of Pontiac") filed a putative class action captioned City of Pontiac Reestablished General Employees' Retirement System v. Arel, et al., C.A. No. 2024-0368-LWW (the "Action") against the Company and its directors in the Delaware Court of Chancery alleging, among other things, that the board of directors of the Company was breaching its fiduciary duties, and coercing Company stockholders, by failing to approve nine directors to the Company's Board (the "Arkhouse Nominees").

On April 10, 2024, the Company announced the appointment of two Arkhouse Nominees to the Company's Board with the

approval of the Company's incumbent directors. In connection with the appointments, Arkhouse withdrew its other director nominations and entered into a cooperation agreement with the Company. City of Pontiac then dismissed the Action with prejudice as to City of Pontiac only, and without prejudice as to any actual or potential claims of any other members of the putative class, while reserving the right to assert a claim for attorneys' fees and expenses. The Company subsequently agreed to pay $100,000 in attorneys' fees and expenses in full satisfaction of any and all claims by City of Pontiac and its counsel for fees and expenses in the Action.

On July 3, 2024, the Court entered an order approving the form of notice concerning attorneys' fees payable in connection with the Action, and closing the Action, subject to the Company filing an affidavit with the Court confirming that such notice has been issued. In entering the order, the Court was not asked to review, and did not pass judgment on, the payment of the attorneys' fees and expenses or their reasonableness.