Aether Holdings, Inc.

Item 1. Legal Proceedings.

From time to time, we may be subject to legal proceedings, investigations and claims incidental to the conduct of our business. Other than the below, we are currently not involved in any legal proceedings which, in the opinion of our management, are likely to have a material adverse effect on our business, financial condition or results of operations.

Mandel v. Aether Holdings, Inc., et. al.

On March 19, 2026, Mr. David Mandel, a former member of the Company’s board of directors, filed a complaint against the Company, Nicolas Lin, the Company’s Chief Executive Officer and Chairman, and certain Doe defendants in the Superior Court of the State of California, County of Los Angeles, Case No. 26STCV08877. On April 24, 2026, the Company removed the action to the United States District Court for the Central District of California, Case No. 2:26-cv-04423. On June 3, 2026, the District Court remanded the action back to the Superior Court of Los Angeles County. The complaint alleges breach of oral contract and promissory fraud based on allegations that the Company and Mr. Lin offered Mr. Mandel the position of Chief Executive Officer of the Company for a three-year term at an annual salary of $220,000 and an equity interest equal to 7.5% of the Company’s equity, vesting in tranches over a three-year period. Mr. Mandel seeks damages in excess of $11.46 million, punitive damages and such other relief as the court may deem appropriate. The Company believes the claims are without merit and intends to defend the action vigorously. The action is in the discovery phase.