{"url_path":"/sec/sdev/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 **","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1389545/0001437749-26-017406-index.html","accession_number":"0001437749-26-017406","cik":"0001389545","ticker":"SDEV","issuer_name":"Stablecoin Development Corp","edgar_url":"https://www.sec.gov/Archives/edgar/data/1389545/0001437749-26-017406-index.html","primary_entity_key":"0001389545","primary_entity_name":"Stablecoin Development Corp"},"word_count":364,"has_tables":true,"body_markdown":"**ITEM 1.**\n\n**LEGAL PROCEEDINGS**\n\n \n\nFrom time to time, the Company may be involved in various legal proceedings arising in the ordinary course of business. As of March 31, 2026, there were no matters that, in the opinion of management, would ultimately result in liability that would have a material adverse effect on the Company’s financial position, results of operations or cash flows.\n\n \n\n**Shareholder Litigation**\n\n \n\nOn February 24, 2026, the Company and its directors were named as defendants in a putative class action (the “Action”) filed in the Delaware Court of Chancery by a purported stockholder of the Company. The lawsuit is captioned Edward Smith v. NovaBay Pharmaceuticals, Inc. et al., C.A. No. 2026-0260-KSJM (Del. Ch.). The plaintiff alleged that the Company’s directors breached their fiduciary duty of disclosure to the Company’s stockholders in connection with the first of eight proposals to be presented for stockholder approval at the Company’s March 12, 2026 special meeting.\n\n \n\nThe individual defendants and the Company believe that the allegations in the Action were meritless, denied and continue to deny those allegations, and deny that any violation of applicable law has occurred. However, solely to minimize expenses and distraction and to avoid the uncertainty of any litigation, on February 26, 2026, the parties reached agreement on a voluntary supplemental disclosure from the Company that would resolve the plaintiff’s claim. Pursuant to that agreement, on March 2, 2026, the Company voluntarily supplemented certain disclosures in its definitive proxy statement, which the Company had previously filed with the SEC on February 10, 2026. \n\n \n\nOn May 12, 2026, the parties entered into a Stipulation and Proposed Order Dismissing the Action as Moot (the “Stipulation and Proposed Order”), pursuant to which the Company agreed to pay $225,000 to fully resolve the plaintiff’s counsel’s claim for an award of attorneys’ fees and reimbursement of expenses. On May 12, 2026, the Court entered an order closing the action, subject to the Company filing an affidavit with the Court confirming that this notice has been issued.\n\n \n\nIn entering the Stipulation and Proposed 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."}