Charlton Aria Acquisition Corp

On March 8, 2019, Jie Yuan (the “Jie Action”) filed a putative shareholder derivative lawsuit purportedly on behalf of Nova Lifestyle, Inc. (Nasdaq; NVFY, the “Nova LifeStyle”) in the U.S. District Court for the Central District of California, against Nova LifeStyle’s former and current CEOs and CFOs (Thanh H. Lam, Ya Ming Wong, Jeffery Chuang and Yuen Ching Ho) and directors (Charlie Huy La, Bin Liu, Umesh Patel, and Min Su) and vice president (Steven Qiang Liu) (collectively, the “Defendants”) seeking to recover any losses Nova LifeStyle sustains as a result of alleged securities violations outlined in a Seeking Alpha blog and a certain securities class action case filed by George Barney and others (the “Barney Action”) in the same court on December 28, 2018.

Specifically, the derivative lawsuit alleges that the Defendants caused Nova LifeStyle to make the alleged false and/or misleading statements giving rise to the putative securities class action. The Plaintiff also alleges that President and CEO Lam engaged in self-dealing transactions by leasing her property to Diamond Bar, a Nova LifeStyle subsidiary, and asserts that Lam, former CEO and director Ya Ming Wong, former CFO and director Yuen Ching Ho, and director Umesh Patel sold securities during the period of time when the alleged false and/or misleading statements were made “with knowledge of material non-public information.”

On May 15, 2019, Wilton Samuels (the “Samuels Action”) also filed a putative derivative complaint purportedly on behalf of Nova Lifestyle against the same current and former directors and officers named in the Jie Action other than Steven Qiang Liu in the same court. Samuels repeats the allegations of the Complaint in the Jie Action. Additionally, Samuels claims that, in announcing its change of auditing firms in September 2016, Nova Lifestyle asserted that this change was made because its existing auditor ceased auditing public companies subject to regulation in the United States without disclosing that its new auditing firm was created in a merger of three accounting firms, including a firm whose registration was revoked by the Public Company Accounting Oversight Board. Samuels also claims that Nova Lifestyle redeemed its stock in reliance upon the same purported fraudulent recognition of revenues claimed in the putative class action. He purports to state direct claims under Sections 10(b) and 20 of the Exchange Act and SEC Rule 10b-5.

Upon the request of the Defendants, the court in the Jie Action and the Samuels Action agreed, respectively, in April 2020 and June 2020 to stay the proceedings until the Barney Action is resolved.

The Barney Action was settled and the final settlement was approved by that court in April 2024. In January 2025, upon stipulation by the respective plaintiffs and defendants in the Jie Action and the Samuels Action, the Court issued an order consolidating the two actions into one case, agreed to lift the stay in the case, and set a new briefing schedule for the parties to move forward with the case. The consolidated case remains pending.

Other than the foregoing pending proceedings, there is no material litigation, arbitration or governmental proceeding currently pending against us or any of our officers or directors in their capacity as such, and we and our officers and directors have not been subject to any such proceeding in the 12 months preceding the date of hereof.