SHARING SERVICES GLOBAL Corp - 10-K filing on 2020-07-08

Commitments and Contingencies	12 Months Ended
Apr. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	NOTE 17 - COMMITMENTS AND CONTINGENCIES Contingencies *Acquisition-related Contingencies* In October 2017, the Company entered into a Share Exchange Agreement pursuant to which it acquired a 25% interest in 561 LLC in exchange for 2,500,000 shares of its Series A preferred stock with a deemed value of $0.25 per share. Under the terms of the Share Exchange Agreement, in May 2018, the Company increased its cumulative equity interest in 561 LLC to 40% in exchange for 2,500,000 shares of its Series A preferred stock. Under the terms of the Share Exchange Agreement, the sellers shall be entitled to an additional 2,500,000 shares of our Series A preferred stock when both of the following conditions have been met: (a) one year has passed from the Closing Date and (b) the closing bid price of the Company’s common stock equals or exceeds $5.00 per share, as reported by OTC Markets. In accordance with GAAP, the Company has not recorded a liability in connection with this contingency. In October 2017, the Company entered into a Share Exchange Agreement pursuant to which it acquired a 25% interest in America Approved Commercial LLC (“AAC”) in exchange for 2,500,000 shares of our Series A preferred stock with a deemed value of $0.25 per share. Under the terms of the Share Exchange Agreement, in May 2018, the Company increased its cumulative equity interest in AAC to 40% in exchange for 2,500,000 shares of its Series A preferred stock. As of April 30, 2019, the Company had issued 5,000,000 shares of its Series A preferred stock (with a deemed value of $1,250,000) in connection with its acquisition of AAC. Under the terms of the Share Exchange Agreement, the sellers shall be entitled to an additional 2,500,000 shares of the Company’s Series A preferred stock when both of the following conditions have been met: (a) one year has passed from the Closing Date and (b) the closing bid price of the Company’s common stock equals or exceeds $5.00 per share, as reported by OTC Markets. In accordance with GAAP, the Company has not recorded a liability in connection with this contingency. As of September 16, 2019, the Company and 212 Technologies, LLC (“212 Technologies”) entered into a Release and Settlement Agreement (the “Settlement Agreement”). Pursuant to the Settlement Agreement, the parties: (i) rescinded a certain “Stakeholder & Investment Agreement” dated May 21, 2017 (resulting in the return of 5,628,750 shares of the Company’s Series A Preferred Stock by 212 Technologies and the return of a 24% ownership stake in 212 Technologies by the Company) and (ii) terminated a certain “Software License Agreement” dated June 12, 2018 (the “SLA”) by and between 212 Technologies and Elepreneurs, LLC, a wholly owned subsidiary of the Company (“Elepreneurs”). In connection with the Settlement Agreement, Elepreneurs agreed to pay 212 Technologies the amount of $425,000 and to dismiss with prejudice a lawsuit it had previously filed concerning the functionality of the mobile application produced by 212 Technologies under the SLA, and the parties reached mutually accommodating terms and resolved all issues between their respective companies. The Company recognized a loss of $425,000 in connection with the Settlement Agreement. Please see Note 19 for more information. *Legal Proceedings – Related-Party Matters and Settlement Liability* On July 26, 2019, the Company and certain of its subsidiaries entered into a Settlement Agreement (the “July 26 Agreement”) with Company co-founder and former consultant Robert Oblon (“Oblon”). Pursuant to the July 26 Agreement and in compromise of a dispute concerning a prior contractual obligation and various competing claims, the Company agreed to pay Oblon the aggregate amount of $2.2 million, payable in 96 equal semi-monthly installments. On August 30, 2019, the Company ceased making the installment payments and filed a lawsuit against Oblon claiming, among other things, Oblon’s breach of contract related to the July 26 Agreement. During the fiscal year ended April 30, 2020, the Company made payments under the July 26 Agreement of $235,000. Effective as of February 28, 2020, the Company and the relevant subsidiaries, Oblon, certain officers and directors of the Company, and certain other corporate parties entered into a Settlement Agreement pursuant to which the relevant parties agreed to settle all prior disputes among them and the Company and Oblon terminated the July 26 Agreement. For the fiscal year ended April 30, 2020, the Company recognized expenses associated with settlement of several legal disputes, including the matter discussed in the preceding paragraph. These expenses include a loss of $2.7 million from the settlement of these matters. Effective as of February 28, 2020, the Company and the relevant subsidiaries; Jordan Brock (“Brock”), a Co-Founder of the Company; Robert Oblon; certain officers and directors of the Company; and certain other corporate parties entered into a Multi-Party Settlement Agreement pursuant to which the foregoing parties agreed to settle all prior disputes among them. In addition, effective February 29, 2020, the Company, Alchemist and Brock entered into a Settlement Accommodation Agreement and an amendment to a previous founder’s agreement pursuant to which the Company agreed to pay to Brock the sum of $1.4 million over time, and the Company recognized a settlement liability for that amount. See Note 15 – “Related Party Transactions” above for more information. As of April 30, 2020, the Company has a remaining settlement liability of $2,620,931 in connection with all matters discussed in the preceding two paragraphs. *Legal Proceedings – Other Matters* The Company from time to time is involved in various claims and lawsuits incidental to the conduct of its business in the ordinary course. We do not believe that the ultimate resolution of these matters will have a material adverse impact on our consolidated financial position, results of operations or cash flows. (i) Cause No. 416-01969-2019; Larry Thompson, Sonya “Taylor” Thompson and Taylor Made Enterprises, Inc. v. Sharing Services Global Corporation f/k/a Sharing Services, Inc., filed in the 416th Judicial District of Collin County, Texas. On April 10, 2019, Larry Thompson, Sonya “Taylor” Thompson and Taylor Made Enterprises, Inc. filed a lawsuit against the Company, alleging they were due compensation as contractors on an oral contract. The Plaintiffs had signed a written contract with the Company that expired on November 30, 2018. A settlement was reached in this matter and the lawsuit was dismissed on October 3, 2019. (j) Cause No. 296-02516-2019; Elepreneur, LLC and Elevacity Global LLC v. Larry Thompson, Sonya “Taylor” Thompson and Taylor Made Enterprises, Inc., filed in the 296^th Judicial District of Collin County, Texas. On May 8, 2019, Elevacity and another of the Company’s subsidiaries, Elepreneur, LLC (“Elepreneur”) filed a lawsuit against Larry Thompson, Sonya “Taylor” Thompson and Taylor Made Enterprises, Inc. for disparagement of one of Elevacity’s products and the interference of Elevacity and Elepreneur’s distribution and sale of products. A settlement was reached in this matter and the lawsuit was dismissed on October 3, 2019. (k) Case No. 4:19-cv-00386; Sharing Services Global Corporation, f/k/a Sharing Services, Inc. v. Taylor Made Enterprises, Inc., filed in the United States District Court for the Eastern District of Texas. On May 29, 2019, the Company filed a lawsuit in federal court asserting claims for violations of the Lanham Act and related claims arising from the Defendant’s claims relating to the trademark Elevate Pink™. A settlement was reached in this matter and the lawsuit was dismissed on October 3, 2019. (l) Opposition No. 91249474; Sharing Services IP Holdings, LLC and Sharing Services Global Corporation v. Taylor Made Enterprises, Inc. On July 10, 2019, SHRG IP Holdings, LLC (“SHRG IP”) a subsidiary of the Company, and the Company filed a trademark opposition with the United States Patent and Trademark Office, relating to the pending registration of certain trademarks by Taylor Made Enterprises, Inc. due to the Company’s pending trademark applications for Elevate Pink™. A settlement was reached in this matter and a Withdrawal of Notice of Opposition was filed with the USPTO Trademark Trial and Appeal Board on October 2, 2019. (m) Cause No. 416-02428-2019; Sharing Services Global Corporation, f/k/a Sharing Services, Inc. v. XIP Technologies, LLC, pending in the 416^th Judicial District of Collin County, Texas. On May 6, 2019, the Company filed a lawsuit against XIP Technologies, LLC to recover money held by XIP Technologies, LLC that was owed to the Company. The Company obtained a writ of garnishment against a third-party holding funds for XIP Technologies, LLC. XIP Technologies, LLC has filed an answer denying the claims asserted against it. A settlement was reached in this matter and, upon final payment of the amounts due to the Company under the Settlement Agreement, the lawsuit will be dismissed. (n) Cause No. 296-03925-2019; Elepreneur, LLC v. 212 Technologies, LLC, filed in the 296^th Judicial District of Collin County, Texas. On July 23, 2019, Elepreneur filed a lawsuit against 212 Technologies, LLC for issues arising from a software license agreement. A settlement was reached in this matter and the lawsuit was dismissed on March 23, 2020. (o) Cause No. 296-03589-2019; Pruvit Ventures, Inc. v. Elevacity, LLC, pending in the 296^th Judicial District of Collin County, Texas. On July 3, 2019, Pruvit Ventures, Inc. filed a lawsuit against Elevacity, alleging a breach of contract claim. Elevacity has denied the claim of breach contract. (p) Cause No. 219-04726-2019; Sharing Services Global Corporation v. Kenyatto M. Jones, Bear Bull Market Dividends, Inc. and Research and Referral, BZ, filed in the 219^th Judicial District of Collin County, Texas. On August 22, 2019, the Company filed a lawsuit against Kenyatto M. Jones, Bear Bull Market Dividends, Inc. and Research and Referral, BZ for breach of contract, statutory fraud in a stock transaction, and violations of the Texas Securities Act. On April 13, 2020, the court issued a Final Default Judgment in favor of the Company finding Research and Referral, BZ (“R&R”) liable for the Company’s claims of fraud in the inducement and statutory fraud in a stock transaction. Further, the court ordered that the stock transaction between the Company and R&R be rescinded and the Company’s stock transferred in such transaction be returned to the Company. Due to the pending lawsuits in Nevada, described below, the Company elected to dismiss its claims against Kenyatto M. Jones and Bear Bull Market Dividends, Inc. without prejudice in Texas. (i) Case No. A-19-802861-B; Sharing Services Global Corporation v. Bear Bull Market Dividends, Inc., Alchemist Holdings, LLC and Kenyatto M. Jones, pending in the District Court of Clark County, Nevada. On October 1, 2019, the Company filed suit against two shareholders, Bear Bull Market Dividends, Inc. and Alchemist Holdings, LLC, and the key principal of Bear Bull Market Dividends, Inc., Kenyatto M. Jones, concerning an amended certificate of designation filed by the Company, and for allegations of self-dealing by the two shareholders. An entry of default was made against two of the defendant shareholders as well as Mr. Jones, as a key principal. This matter remains pending. (j) Case No. A-20-811265-C; Sharing Services Global Corporation v. Bear Bull Market Dividends, Inc., Research and Referral, BZ and Kenyatto M. Jones, pending in the District Court of Clark County, Nevada. On February 27, 2020, the Company filed suit against two shareholders, Bear Bull Market Dividends, Inc. and Research and Referral BZ, as well as a key principal of Bear Bull Market Dividends, Inc., Kenyatto M. Jones, concerning breach of contract, fraud, violations of state securities laws and alter ego relating to a stock exchange/transfer transaction, involving the Company’s stock. An entry of default was made against the two shareholders and key principal Jones and the matter remains pending. (k) Cause No. 366-04941-2019; Sharing Services Global Corporation, Elepreneurs U.S., LLC and Elevacity, LLC v. Robert Oblon, filed in the 366^th Judicial District of Collin County, Texas. On August 30, 2019, the Company and its affiliated entities filed a lawsuit against Robert Oblon for breach of contract, tortious interference with business relationships, and misappropriation of trade secrets, and sought injunctive relief. A settlement was reached in this matter and the lawsuit was dismissed on March 2, 2020. As part of the settlement, the Company agreed to pay amounts that were due to Oblon under a prior settlement agreement in the approximate amount of $2,000,000, to be paid in installments through June 1, 2020. The Company completed its final payment obligation in accordance with the settlement agreement. (l) Cause No. 380-01007-2020; Elepreneurs Holdings, LLC, d/b/a Elepreneur, LLC v. Carissa Rogers and Barbie Williams, filed in the 380^th Judicial District of Collin County, Texas. On February 20, 2020, Elepreneurs Holdings, LLC filed a lawsuit against two of its former distributors for breach of contract, tortious interference with business relationships, tortious interference with contracts, and disparagement of a perishable food product, and sought injunctive relief. A settlement was reached in this matter and Agreed Final Judgment and Permanent Injunction was entered on April 8, 2020. (m) Cause No. DC-19-20587; Sharing Services Global Corporation f/k/a Sharing Services, Inc. v. Amber-Lynn Beers-Hutchinson, n/k/a Amber-Lynn Cantrell, pending in the 192^nd Judicial District of Dallas County, Texas. On December 30, 2019, the Company filed a lawsuit against a former contractor for breach of contract. The defendant in this matter filed a counterclaim, asserting defamatory conduct engaged in by the Company. This matter remains pending. (n) On December 4, 2019, Entrepreneur Media, Inc. (“EMI”) filed a Notice of Opposition in response to the “Elepreneurs” trademark application filed by SHRG IP Holdings, LLC, a wholly owned subsidiary of the Company. This opposition proceeding is now before the Trademark Trial and Appeal Board of the United States Patent and Trademark Office (“TTAB”). On April 13, 2020, SHRG IP Holdings, LLC filed an answer to the Notice of Opposition. Legal counsel for the parties held a mandatary discovery conference on May 12, 2020. This matter remains pending. (o) On May 20, 2020, the Company (through its legal counsel, Jones, Davis & Jackson, PC) received a demand letter from legal counsel representing a former employee of the Company. The Company has denied the claim of this at-will employee and this matter remains pending. (p) Company subsidiaries Elevacity Holdings, LLC, Elevacity U.S., LLC, Elepreneurs Holdings, LLC and Elepreneurs U.S., LLC (collectively, the “Subsidiaries”) received notice of a dispute with a former officer of such Subsidiaries regarding severance payments allegedly due under an executive employment agreement. The Company and its Subsidiaries have disputed this matter, and the issues between the parties remain outstanding. (q) In March 2019, the Company engaged in preliminary discussions with various independent contractor distributors of the Subsidiaries regarding a previously reported dispute concerning the issuance of stock warrants based on the satisfaction of certain individual sales production metrics. The Company previously recorded a liability of $0.1644 per share for the projected resolution of this matter, which remains pending.

Commitments and Contingencies

12 Months Ended

Apr. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

NOTE 17 - COMMITMENTS AND CONTINGENCIES

Contingencies

Acquisition-related Contingencies

In October 2017, the Company entered into a Share Exchange Agreement pursuant to which it acquired a 25% interest in 561 LLC in exchange for 2,500,000 shares of its Series A preferred stock with a deemed value of $0.25 per share. Under the terms of the Share Exchange Agreement, in May 2018, the Company increased its cumulative equity interest in 561 LLC to 40% in exchange for 2,500,000 shares of its Series A preferred stock. Under the terms of the Share Exchange Agreement, the sellers shall be entitled to an additional 2,500,000 shares of our Series A preferred stock when both of the following conditions have been met: (a) one year has passed from the Closing Date and (b) the closing bid price of the Company’s common stock equals or exceeds $5.00 per share, as reported by OTC Markets. In accordance with GAAP, the Company has not recorded a liability in connection with this contingency.

In October 2017, the Company entered into a Share Exchange Agreement pursuant to which it acquired a 25% interest in America Approved Commercial LLC (“AAC”) in exchange for 2,500,000 shares of our Series A preferred stock with a deemed value of $0.25 per share. Under the terms of the Share Exchange Agreement, in May 2018, the Company increased its cumulative equity interest in AAC to 40% in exchange for 2,500,000 shares of its Series A preferred stock. As of April 30, 2019, the Company had issued 5,000,000 shares of its Series A preferred stock (with a deemed value of $1,250,000) in connection with its acquisition of AAC. Under the terms of the Share Exchange Agreement, the sellers shall be entitled to an additional 2,500,000 shares of the Company’s Series A preferred stock when both of the following conditions have been met: (a) one year has passed from the Closing Date and (b) the closing bid price of the Company’s common stock equals or exceeds $5.00 per share, as reported by OTC Markets. In accordance with GAAP, the Company has not recorded a liability in connection with this contingency.

As of September 16, 2019, the Company and 212 Technologies, LLC (“212 Technologies”) entered into a Release and Settlement Agreement (the “Settlement Agreement”). Pursuant to the Settlement Agreement, the parties: (i) rescinded a certain “Stakeholder & Investment Agreement” dated May 21, 2017 (resulting in the return of 5,628,750 shares of the Company’s Series A Preferred Stock by 212 Technologies and the return of a 24% ownership stake in 212 Technologies by the Company) and (ii) terminated a certain “Software License Agreement” dated June 12, 2018 (the “SLA”) by and between 212 Technologies and Elepreneurs, LLC, a wholly owned subsidiary of the Company (“Elepreneurs”). In connection with the Settlement Agreement, Elepreneurs agreed to pay 212 Technologies the amount of $425,000 and to dismiss with prejudice a lawsuit it had previously filed concerning the functionality of the mobile application produced by 212 Technologies under the SLA, and the parties reached mutually accommodating terms and resolved all issues between their respective companies. The Company recognized a loss of $425,000 in connection with the Settlement Agreement. Please see Note 19 for more information.

Legal Proceedings – Related-Party Matters and Settlement Liability

On July 26, 2019, the Company and certain of its subsidiaries entered into a Settlement Agreement (the “July 26 Agreement”) with Company co-founder and former consultant Robert Oblon (“Oblon”). Pursuant to the July 26 Agreement and in compromise of a dispute concerning a prior contractual obligation and various competing claims, the Company agreed to pay Oblon the aggregate amount of $2.2 million, payable in 96 equal semi-monthly installments. On August 30, 2019, the Company ceased making the installment payments and filed a lawsuit against Oblon claiming, among other things, Oblon’s breach of contract related to the July 26 Agreement. During the fiscal year ended April 30, 2020, the Company made payments under the July 26 Agreement of $235,000. Effective as of February 28, 2020, the Company and the relevant subsidiaries, Oblon, certain officers and directors of the Company, and certain other corporate parties entered into a Settlement Agreement pursuant to which the relevant parties agreed to settle all prior disputes among them and the Company and Oblon terminated the July 26 Agreement. For the fiscal year ended April 30, 2020, the Company recognized expenses associated with settlement of several legal disputes, including the matter discussed in the preceding paragraph. These expenses include a loss of $2.7 million from the settlement of these matters.

Effective as of February 28, 2020, the Company and the relevant subsidiaries; Jordan Brock (“Brock”), a Co-Founder of the Company; Robert Oblon; certain officers and directors of the Company; and certain other corporate parties entered into a Multi-Party Settlement Agreement pursuant to which the foregoing parties agreed to settle all prior disputes among them. In addition, effective February 29, 2020, the Company, Alchemist and Brock entered into a Settlement Accommodation Agreement and an amendment to a previous founder’s agreement pursuant to which the Company agreed to pay to Brock the sum of $1.4 million over time, and the Company recognized a settlement liability for that amount. See Note 15 – “Related Party Transactions” above for more information.

As of April 30, 2020, the Company has a remaining settlement liability of $2,620,931 in connection with all matters discussed in the preceding two paragraphs.

Legal Proceedings – Other Matters

The Company from time to time is involved in various claims and lawsuits incidental to the conduct of its business in the ordinary course. We do not believe that the ultimate resolution of these matters will have a material adverse impact on our consolidated financial position, results of operations or cash flows.

(i) Cause No. 416-01969-2019; Larry Thompson, Sonya “Taylor” Thompson and Taylor Made Enterprises, Inc. v. Sharing Services Global Corporation f/k/a Sharing Services, Inc., filed in the 416th Judicial District of Collin County, Texas. On April 10, 2019, Larry Thompson, Sonya “Taylor” Thompson and Taylor Made Enterprises, Inc. filed a lawsuit against the Company, alleging they were due compensation as contractors on an oral contract. The Plaintiffs had signed a written contract with the Company that expired on November 30, 2018. A settlement was reached in this matter and the lawsuit was dismissed on October 3, 2019.

(j) Cause No. 296-02516-2019; Elepreneur, LLC and Elevacity Global LLC v. Larry Thompson, Sonya “Taylor” Thompson and Taylor Made Enterprises, Inc., filed in the 296^th Judicial District of Collin County, Texas. On May 8, 2019, Elevacity and another of the Company’s subsidiaries, Elepreneur, LLC (“Elepreneur”) filed a lawsuit against Larry Thompson, Sonya “Taylor” Thompson and Taylor Made Enterprises, Inc. for disparagement of one of Elevacity’s products and the interference of Elevacity and Elepreneur’s distribution and sale of products. A settlement was reached in this matter and the lawsuit was dismissed on October 3, 2019.

(k) Case No. 4:19-cv-00386; Sharing Services Global Corporation, f/k/a Sharing Services, Inc. v. Taylor Made Enterprises, Inc., filed in the United States District Court for the Eastern District of Texas. On May 29, 2019, the Company filed a lawsuit in federal court asserting claims for violations of the Lanham Act and related claims arising from the Defendant’s claims relating to the trademark Elevate Pink™. A settlement was reached in this matter and the lawsuit was dismissed on October 3, 2019.

(l) Opposition No. 91249474; Sharing Services IP Holdings, LLC and Sharing Services Global Corporation v. Taylor Made Enterprises, Inc. On July 10, 2019, SHRG IP Holdings, LLC (“SHRG IP”) a subsidiary of the Company, and the Company filed a trademark opposition with the United States Patent and Trademark Office, relating to the pending registration of certain trademarks by Taylor Made Enterprises, Inc. due to the Company’s pending trademark applications for Elevate Pink™. A settlement was reached in this matter and a Withdrawal of Notice of Opposition was filed with the USPTO Trademark Trial and Appeal Board on October 2, 2019.

(m) Cause No. 416-02428-2019; Sharing Services Global Corporation, f/k/a Sharing Services, Inc. v. XIP Technologies, LLC, pending in the 416^th Judicial District of Collin County, Texas. On May 6, 2019, the Company filed a lawsuit against XIP Technologies, LLC to recover money held by XIP Technologies, LLC that was owed to the Company. The Company obtained a writ of garnishment against a third-party holding funds for XIP Technologies, LLC. XIP Technologies, LLC has filed an answer denying the claims asserted against it. A settlement was reached in this matter and, upon final payment of the amounts due to the Company under the Settlement Agreement, the lawsuit will be dismissed.

(n) Cause No. 296-03925-2019; Elepreneur, LLC v. 212 Technologies, LLC, filed in the 296^th Judicial District of Collin County, Texas. On July 23, 2019, Elepreneur filed a lawsuit against 212 Technologies, LLC for issues arising from a software license agreement. A settlement was reached in this matter and the lawsuit was dismissed on March 23, 2020.

(o) Cause No. 296-03589-2019; Pruvit Ventures, Inc. v. Elevacity, LLC, pending in the 296^th Judicial District of Collin County, Texas. On July 3, 2019, Pruvit Ventures, Inc. filed a lawsuit against Elevacity, alleging a breach of contract claim. Elevacity has denied the claim of breach contract.

(p) Cause No. 219-04726-2019; Sharing Services Global Corporation v. Kenyatto M. Jones, Bear Bull Market Dividends, Inc. and Research and Referral, BZ, filed in the 219^th Judicial District of Collin County, Texas. On August 22, 2019, the Company filed a lawsuit against Kenyatto M. Jones, Bear Bull Market Dividends, Inc. and Research and Referral, BZ for breach of contract, statutory fraud in a stock transaction, and violations of the Texas Securities Act. On April 13, 2020, the court issued a Final Default Judgment in favor of the Company finding Research and Referral, BZ (“R&R”) liable for the Company’s claims of fraud in the inducement and statutory fraud in a stock transaction. Further, the court ordered that the stock transaction between the Company and R&R be rescinded and the Company’s stock transferred in such transaction be returned to the Company. Due to the pending lawsuits in Nevada, described below, the Company elected to dismiss its claims against Kenyatto M. Jones and Bear Bull Market Dividends, Inc. without prejudice in Texas.

(i) Case No. A-19-802861-B; Sharing Services Global Corporation v. Bear Bull Market Dividends, Inc., Alchemist Holdings, LLC and Kenyatto M. Jones, pending in the District Court of Clark County, Nevada. On October 1, 2019, the Company filed suit against two shareholders, Bear Bull Market Dividends, Inc. and Alchemist Holdings, LLC, and the key principal of Bear Bull Market Dividends, Inc., Kenyatto M. Jones, concerning an amended certificate of designation filed by the Company, and for allegations of self-dealing by the two shareholders. An entry of default was made against two of the defendant shareholders as well as Mr. Jones, as a key principal. This matter remains pending.

(j) Case No. A-20-811265-C; Sharing Services Global Corporation v. Bear Bull Market Dividends, Inc., Research and Referral, BZ and Kenyatto M. Jones, pending in the District Court of Clark County, Nevada. On February 27, 2020, the Company filed suit against two shareholders, Bear Bull Market Dividends, Inc. and Research and Referral BZ, as well as a key principal of Bear Bull Market Dividends, Inc., Kenyatto M. Jones, concerning breach of contract, fraud, violations of state securities laws and alter ego relating to a stock exchange/transfer transaction, involving the Company’s stock. An entry of default was made against the two shareholders and key principal Jones and the matter remains pending.

(k) Cause No. 366-04941-2019; Sharing Services Global Corporation, Elepreneurs U.S., LLC and Elevacity, LLC v. Robert Oblon, filed in the 366^th Judicial District of Collin County, Texas. On August 30, 2019, the Company and its affiliated entities filed a lawsuit against Robert Oblon for breach of contract, tortious interference with business relationships, and misappropriation of trade secrets, and sought injunctive relief. A settlement was reached in this matter and the lawsuit was dismissed on March 2, 2020. As part of the settlement, the Company agreed to pay amounts that were due to Oblon under a prior settlement agreement in the approximate amount of $2,000,000, to be paid in installments through June 1, 2020. The Company completed its final payment obligation in accordance with the settlement agreement.

(l) Cause No. 380-01007-2020; Elepreneurs Holdings, LLC, d/b/a Elepreneur, LLC v. Carissa Rogers and Barbie Williams, filed in the 380^th Judicial District of Collin County, Texas. On February 20, 2020, Elepreneurs Holdings, LLC filed a lawsuit against two of its former distributors for breach of contract, tortious interference with business relationships, tortious interference with contracts, and disparagement of a perishable food product, and sought injunctive relief. A settlement was reached in this matter and Agreed Final Judgment and Permanent Injunction was entered on April 8, 2020.

(m) Cause No. DC-19-20587; Sharing Services Global Corporation f/k/a Sharing Services, Inc. v. Amber-Lynn Beers-Hutchinson, n/k/a Amber-Lynn Cantrell, pending in the 192^nd Judicial District of Dallas County, Texas. On December 30, 2019, the Company filed a lawsuit against a former contractor for breach of contract. The defendant in this matter filed a counterclaim, asserting defamatory conduct engaged in by the Company. This matter remains pending.

(n) On December 4, 2019, Entrepreneur Media, Inc. (“EMI”) filed a Notice of Opposition in response to the “Elepreneurs” trademark application filed by SHRG IP Holdings, LLC, a wholly owned subsidiary of the Company. This opposition proceeding is now before the Trademark Trial and Appeal Board of the United States Patent and Trademark Office (“TTAB”). On April 13, 2020, SHRG IP Holdings, LLC filed an answer to the Notice of Opposition. Legal counsel for the parties held a mandatary discovery conference on May 12, 2020. This matter remains pending.

(o) On May 20, 2020, the Company (through its legal counsel, Jones, Davis & Jackson, PC) received a demand letter from legal counsel representing a former employee of the Company. The Company has denied the claim of this at-will employee and this matter remains pending.

(p) Company subsidiaries Elevacity Holdings, LLC, Elevacity U.S., LLC, Elepreneurs Holdings, LLC and Elepreneurs U.S., LLC (collectively, the “Subsidiaries”) received notice of a dispute with a former officer of such Subsidiaries regarding severance payments allegedly due under an executive employment agreement. The Company and its Subsidiaries have disputed this matter, and the issues between the parties remain outstanding.

(q) In March 2019, the Company engaged in preliminary discussions with various independent contractor distributors of the Subsidiaries regarding a previously reported dispute concerning the issuance of stock warrants based on the satisfaction of certain individual sales production metrics. The Company previously recorded a liability of $0.1644 per share for the projected resolution of this matter, which remains pending.