1008-00005 · Lumos Analytics Inc · Correspondence

client-status-update-q2-2023.docx DOCUMENT Litigation

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PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION / ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP 555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 555-7200 Facsimile: (415) 555-7201

125 Broad Street New York, New York 10004 Telephone: (212) 555-4400 Facsimile: (212) 555-4401

June 30, 2023

Via Email and First-Class Mail

Priya Chandrasekaran Chief Executive Officer Lumos Analytics Inc. 4700 Orchard Parkway, Suite 300 San Jose, California 95134

Thomas Brightwell General Counsel Lumos Analytics Inc. 4700 Orchard Parkway, Suite 300 San Jose, California 95134

Re: Quarterly Status Update — *Lumos Analytics Inc. v. NovaSpark Technologies Inc., et al. Case No. 23-CV-004871, Superior Court of the State of California, County of Santa Clara C&H Matter No. 1008-00005*

Dear Priya and Thomas:

1. Introduction and Purpose of Letter

This letter provides our quarterly status update for the second quarter of 2023 (Q2 2023) on the above-referenced matter. We are pleased to report significant progress on multiple fronts, and we believe Lumos Analytics Inc. ("Lumos" or the "Company") is in a strong litigation posture as we approach the second half of 2023.

As you know, this matter involves claims for trade-secret misappropriation, breach of contract, and related claims asserted by Lumos against NovaSpark Technologies Inc. ("NovaSpark"), Rajiv Anand, Serena Mallick, and Derek Yun (collectively, "Defendants"). The action was filed on January 19, 2023, and the operative Verified Complaint asserts causes of action under: (i) the California Uniform Trade Secrets Act ("CUTSA"), Cal. Civ. Code §§ 3426–3426.11; (ii) breach of the Proprietary Information and Inventions Assignment Agreement ("PIIAA") executed by each of the individual Defendants during their employment with Lumos; (iii) breach of the duty of loyalty; (iv) unfair business practices under the California Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq.; and (v) conversion. The claims arise from the coordinated departure of three senior Lumos engineers—Anand, Mallick, and Yun—who took proprietary materials with them and used those materials to build a directly competing product at NovaSpark, a company incorporated by Anand just three days after his resignation from Lumos.

Defendants are represented by Whitfield, Raines & Gerber LLP, with Patricia Whitfield and Samuel Gerber serving as lead counsel. The matter is assigned to the Honorable David Rutherford of the Santa Clara County Superior Court.

As summarized below, the second quarter saw significant progress across the injunctive relief, forensic investigation, and discovery phases of this litigation. The forensic evidence uncovered by the neutral examiner substantially corroborates Lumos's allegations, and the depositions of all three individual Defendants have been completed. We also wish to present our recommendation that Lumos consider pursuing mediation in the coming months to capitalize on the settlement leverage generated by these developments. Each of these items is addressed in detail below.

2. Summary of Prior Proceedings (Q1 2023)

For ease of reference, we briefly summarize the key proceedings from the first quarter of 2023, which laid the foundation for the significant progress achieved this quarter.

2.1 Temporary Restraining Order

On January 19, 2023—the same day the Verified Complaint was filed—we submitted an ex parte application for a Temporary Restraining Order ("TRO") on Lumos's behalf. The application was supported by the detailed sworn declarations of Priya Chandrasekaran, in her capacity as Chief Executive Officer of Lumos, and Rachel Fong, Vice President of Engineering, who provided specific testimony regarding the nature, value, and competitive significance of the misappropriated trade secrets, as well as the circumstances of the individual Defendants' departures.

On January 23, 2023, Judge Rutherford granted the TRO. The order required Defendants to: (a) immediately cease all use, access, copying, transmission, or exploitation of Lumos proprietary information, trade secrets, and confidential materials; (b) preserve all electronic devices, storage media, cloud storage accounts, and repositories in their possession, custody, or control that contained or may have contained Lumos proprietary information; and (c) refrain from destroying, deleting, modifying, or otherwise altering any documents, files, emails, messages, or other data relating to materials obtained from Lumos or communications regarding the individual Defendants' departures from Lumos and formation of NovaSpark.

The TRO was critical in establishing immediate protections for Lumos's proprietary materials and, equally important, in preserving the evidentiary record that has since proven pivotal during the forensic examination discussed in Section 3 below.

2.2 Preliminary Injunction

Defendants, through their counsel at Whitfield, Raines & Gerber LLP, filed their opposition to Lumos's motion for a preliminary injunction on February 2, 2023. The opposition principally argued that the materials at issue did not constitute protectable trade secrets and that Lumos could not demonstrate irreparable harm. We filed a comprehensive reply brief addressing each of these arguments.

The preliminary injunction hearing was held before Judge Rutherford on February 10, 2023. Following oral argument and the presentation of evidence, the Court granted Lumos's motion for a preliminary injunction on all five categories of trade secrets identified in the Verified Complaint. Specifically, the Court's ruling encompassed:

1. LumosEdge Ensemble ML Model Architecture — The proprietary neural-network topology and hyperparameter configurations underlying the LumosEdge platform, which represent years of research and development and constitute the core intellectual property of Lumos's flagship product.

2. Proprietary Feature-Engineering Libraries — The Company's feature-engineering libraries containing 2,847 individual engineered features, developed through extensive iterative testing and refinement, and representing a critical competitive advantage in Lumos's predictive analytics capabilities.

3. DataStream ETL Pipeline Codebase and Data-Schema Definitions — The codebase and associated data-schema definitions for the DataStream Extract, Transform, Load ("ETL") pipeline, covering data ingestion from 43 alternative-data vendors, and reflecting years of vendor-specific integration work and proprietary data-normalization processes.

4. Curated Training Dataset — The curated training dataset of approximately 14.6 terabytes, compiled and refined over several years at substantial cost, representing a proprietary asset that would be extremely difficult and expensive for a competitor to replicate independently.

5. Confidential Product Roadmap Documents (2023–2025) — Confidential product roadmap documents for 2023 through 2025, including the unreleased LumosEdge 3.0 specifications (a 37-page document), which detail strategic product plans, feature development timelines, and market positioning strategies not yet disclosed to the public.

The formal Preliminary Injunction Order was entered on February 17, 2023. As of the date of this letter, the preliminary injunction remains in full force and effect. We have not identified, and Defendants have not reported, any violations of the injunction to date. We continue to monitor compliance and will take immediate action should any violation come to our attention.

3. Forensic Examination — Brindoval Digital Forensics LLC

One of the most significant developments of Q2 2023 was the completion of the forensic imaging process and the issuance of the Preliminary Forensic Report, both of which substantially corroborate and strengthen Lumos's claims. We summarize the relevant developments below.

3.1 Appointment of Neutral Forensic Examiner

On March 8, 2023, following discussions between our team and Defendants' counsel at Whitfield, Raines & Gerber LLP, the parties entered into a stipulation—subsequently approved by the Court—for the appointment of Brindoval Digital Forensics LLC ("Brindoval") as the neutral forensic examiner in this matter. Brindoval is a nationally recognized digital forensics firm located at 1901 Harrison Street, Suite 600, Oakland, California 94612. The firm is led by Dr. Irene Chow, who serves as Managing Director and Lead Forensic Examiner, and Kevin Barr, Senior Forensic Analyst. Dr. Chow has extensive experience in technology-related trade-secret litigation and has served as a court-appointed forensic examiner in numerous matters in both state and federal court.

Pursuant to the Court's order and the parties' stipulation, the costs of the forensic examination are allocated sixty percent (60%) to Defendants/NovaSpark and forty percent (40%) to Lumos. This cost-sharing arrangement reflects the Court's recognition that the examination was necessitated primarily by the Defendants' alleged conduct, while also accounting for the fact that the examination serves the interests of both parties in establishing a clear evidentiary record.

3.2 Forensic Imaging

Brindoval conducted forensic imaging from March 22 through April 14, 2023. The scope of the forensic imaging was comprehensive and encompassed the following devices, systems, and accounts:

• NovaSpark Servers — All server infrastructure operated by NovaSpark Technologies Inc., including development servers, production servers, and backup systems.

• Defendants' Personal Devices — Three laptops belonging to Rajiv Anand, Serena Mallick, and Derek Yun, respectively; two mobile phones belonging to Anand and Mallick; and two external storage drives, including a USB drive bearing serial number WD-4837291, which belongs to Serena Mallick.

• Cloud Storage Accounts — The personal cloud storage accounts of the individual Defendants, including Rajiv Anand's personal Hollowell Health IT account and Derek Yun's personal Larkspur Technologies account.

Brindoval followed industry-standard forensic imaging protocols, including the creation of bit-for-bit forensic copies of all devices and the generation of cryptographic hash values to ensure the integrity and chain of custody of all imaged data. All forensic images are maintained in Brindoval's secure, access-controlled evidence repository in compliance with the Stipulated Protective Order discussed in Section 6 below.

3.3 Brindoval Preliminary Forensic Report (May 1, 2023)

On May 1, 2023, Brindoval issued its Preliminary Forensic Report (the "Report"). The Report's key findings confirm the presence of Lumos proprietary materials on NovaSpark systems and on the personal devices and accounts of all three individual Defendants. These findings are highly significant and substantially corroborate the allegations set forth in the Verified Complaint. Specifically, the Report confirmed the following:

(a) LumosEdge ML Model Architecture (Anand). Approximately 3.2 gigabytes (GB) of files matching Lumos's ML model architecture specifications and hyperparameter configurations were found on Rajiv Anand's personal Hollowell Health IT account and on NovaSpark's development and production servers. The files include proprietary neural-network topology diagrams, hyperparameter configuration files, and associated technical documentation. Metadata analysis indicates that these files were uploaded to Anand's personal Hollowell Health IT on or about September 26, 2022—four days before Anand's September 30, 2022 resignation from Lumos—and subsequently transferred to NovaSpark's servers in mid-October 2022.

(b) DataStream ETL Pipeline Repository (Mallick). The entire DataStream ETL pipeline repository, comprising approximately 780 megabytes (MB) of source code, data-schema definitions, and configuration files, was found on Serena Mallick's personal USB drive (serial number: WD-4837291). Identical copies of this repository were also identified on NovaSpark's development servers. The forensic evidence indicates that Mallick cloned the repository to her personal USB drive on or about October 10, 2022, four days before her October 14, 2022 resignation from Lumos.

(c) Feature-Engineering Code and Model-Training Scripts (Yun). Forty-seven (47) proprietary Jupyter notebooks containing feature-engineering code and model-training scripts developed at Lumos were found in Derek Yun's personal Larkspur Technologies account. These notebooks had been integrated into NovaSpark's development environment, indicating active use of the misappropriated materials in NovaSpark's product development efforts. The forensic evidence establishes that Yun downloaded these notebooks to his personal Larkspur Technologies on or about October 18, 2022, three days before his October 21, 2022 resignation.

(d) LumosEdge 3.0 Product Roadmap (Anand). The 37-page LumosEdge 3.0 Product Roadmap PDF—a highly confidential strategic document detailing Lumos's product plans through 2025—was found in Rajiv Anand's personal email archive at the address r.anand.personal@vaultmail.com. A copy of the same document was also found on NovaSpark's servers. Email metadata indicates that Anand forwarded this document to his personal email account on September 28, 2022, two days after the initial file transfer to his Hollowell Health IT and two days before his resignation.

In connection with our review of the Preliminary Forensic Report, Meridian Cybersecurity Advisors Inc. ("Meridian"), and specifically Naveen Kapoor, Senior Consultant at Meridian, has been assisting our team in reviewing and interpreting the forensic findings. Meridian's expertise has been instrumental in helping us contextualize the technical aspects of the Report and identify additional areas for investigation.

Taken together, the Brindoval findings substantially strengthen Lumos's position on all claims, particularly the CUTSA trade-secret misappropriation and breach of the PIIAA claims. The forensic evidence establishes a clear chain of custody demonstrating that all three individual Defendants systematically extracted proprietary materials from Lumos in the days immediately preceding their respective resignations, and that those materials were subsequently deployed within NovaSpark's operations. We anticipate that these findings will be highly persuasive at trial and provide significant leverage in any settlement discussions.

4. Fact discovery — Depositions

A central objective of Q2 2023 was the completion of depositions of the three individual Defendants. We are pleased to report that all three depositions have now been taken. The key highlights of each deposition are summarized below.

4.1 Deposition of Rajiv Anand (May 15, 2023)

The deposition of Rajiv Anand was conducted on May 15, 2023, at the offices of Calderwood & Harkness LLP, 555 California Street, 40th Floor, San Francisco, California. The deposition lasted approximately seven hours and covered the following key areas:

• September 26, 2022 File Transfer. Anand was questioned extensively about his transfer of approximately 3.2 GB of files—including LumosEdge ML model architecture specifications and hyperparameter configurations—to his personal Hollowell Health IT account on September 26, 2022. Anand acknowledged making the transfer but attempted to characterize the materials as non-proprietary "general reference materials" and "personal work product." This characterization is contradicted by the forensic evidence, which demonstrates that the transferred files include proprietary neural-network topology diagrams, configuration files, and documentation bearing Lumos's confidentiality markings.

• September 28, 2022 Email Forwarding. Anand was questioned regarding his forwarding of the 37-page LumosEdge 3.0 Product Roadmap to his personal email account at r.anand.personal@vaultmail.com on September 28, 2022. Anand acknowledged forwarding the document but claimed he did so "inadvertently" as part of a broader email organization effort. This explanation is difficult to reconcile with the targeted nature of the forwarding and the timing—just two days before his resignation.

• Incorporation of NovaSpark. Anand confirmed that he incorporated NovaSpark Technologies Inc. on October 3, 2022—just three days after his September 30, 2022 resignation from Lumos. This extraordinarily compressed timeline strongly suggests that Anand had been planning the formation of a competing enterprise while still employed at Lumos, and that the extraction of proprietary materials was undertaken in furtherance of that plan.

• Coordination with Mallick and Yun. Anand was questioned about his communications with Serena Mallick and Derek Yun regarding their departures from Lumos and their subsequent recruitment to NovaSpark. While Anand was evasive on certain points, the testimony confirmed that he had discussions with both Mallick and Yun prior to his own resignation regarding the formation of a new venture, and that he subsequently recruited both individuals to join NovaSpark within weeks of its incorporation.

• PIIAA Obligations. Anand was examined regarding his PIIAA obligations, including the restrictive covenant provisions. Anand acknowledged executing the PIIAA and confirmed his understanding that the agreement included: (i) a confidentiality obligation surviving for three years post-termination of employment; (ii) a non-solicitation of employees covenant for 12 months following departure; and (iii) a covenant not to use or disclose trade secrets. Anand maintained, however, that he did not believe the transferred materials fell within the scope of the PIIAA's protections—a position that is untenable in light of the forensic evidence and the Court's preliminary injunction ruling.

A detailed summary of Anand's deposition testimony was provided to you in our May 18, 2023 memorandum to file. We will not repeat the full analysis here but note that, on balance, Anand's testimony—and particularly his evasiveness and implausible explanations for the file transfers—was favorable to Lumos's position.

4.2 Deposition of Serena Mallick (June 7, 2023)

The deposition of Serena Mallick was conducted on June 7, 2023. The deposition lasted approximately six and one-half hours and covered the following key areas:

• October 10, 2022 USB Cloning. Mallick was examined at length about her October 10, 2022 cloning of the entire DataStream ETL pipeline repository to her personal USB drive (serial number: WD-4837291). Mallick acknowledged performing the cloning operation and confirmed that the cloned repository included source code, data-schema definitions, and configuration files for the DataStream ETL pipeline. Mallick attempted to justify the transfer by claiming she was backing up "personal notes" and "work samples," but she conceded under further questioning that the repository contained the entirety of the DataStream codebase covering ingestion from 43 alternative-data vendors—a far more comprehensive set of materials than mere personal notes.

• Rapid Transition to NovaSpark. Mallick confirmed the following timeline: she resigned from Lumos on October 14, 2022, and began her role as Vice President of Engineering at NovaSpark on October 17, 2022—a gap of only one business day (over the intervening weekend). This rapid transition strongly suggests advance planning and coordination with Anand.

• Communications with Anand. Mallick acknowledged having had communications with Anand prior to her departure from Lumos regarding the formation of NovaSpark and her potential role at the new company. She was evasive about the precise timing and content of these discussions but did not deny that they occurred during her employment at Lumos.

• Work at NovaSpark. Mallick was questioned about her work at NovaSpark building data pipeline infrastructure. While she attempted to minimize the connection between her work at NovaSpark and the misappropriated DataStream materials, the forensic evidence—showing copies of the DataStream repository on NovaSpark's development servers—undermines her testimony on this point.

Mallick's testimony contained significant admissions regarding the USB transfer and her awareness of the proprietary nature of the DataStream codebase. In particular, she conceded that she understood the DataStream repository was subject to confidentiality protections under her PIIAA and that she did not obtain authorization from anyone at Lumos to copy the repository to a personal device. A detailed summary of Mallick's deposition was provided in our June 12, 2023 memorandum to file.

4.3 Deposition of Derek Yun (June 22, 2023)

The deposition of Derek Yun was conducted on June 22, 2023, completing the deposition schedule for all three individual Defendants. The deposition covered the following key areas:

• October 18, 2022 Larkspur Technologies Download. Yun was examined regarding his October 18, 2022 download of 47 proprietary Jupyter notebooks—containing feature-engineering code and model-training scripts—to his personal Larkspur Technologies account. Yun acknowledged the download but contested the characterization of certain notebooks as proprietary to Lumos.

• Knowledge of Proprietary Nature. Yun was questioned about his knowledge of the proprietary nature of the feature-engineering libraries and model-training scripts. Despite initial resistance, Yun conceded that the feature-engineering libraries represented significant investment by Lumos and that he was aware they were considered proprietary by the Company.

• Use of Materials at NovaSpark. Yun was questioned about his use of the downloaded materials in NovaSpark's product development environment. The forensic evidence demonstrates that the 47 Jupyter notebooks were integrated into NovaSpark's development environment, and Yun's testimony on this point was guarded but not fully exculpatory.

• Timeline of Departure. Yun confirmed the following timeline: he downloaded the notebooks on October 18, 2022; resigned from Lumos on October 21, 2022; and commenced employment at NovaSpark on October 24, 2022. This pattern is consistent with the coordinated extraction-and-departure sequence exhibited by all three individual Defendants.

A detailed summary memorandum regarding Yun's deposition testimony is currently being finalized and will be distributed to you shortly.

5. Additional discovery — Written discovery Status

In addition to the deposition program described above, we have been pursuing written discovery to build a comprehensive evidentiary record. On March 20, 2023, we served Plaintiff's First Set of Requests for Production of Documents and Plaintiff's First Sets of Special Interrogatories to both Rajiv Anand and NovaSpark Technologies Inc.

Responses to these discovery requests have been received, and document production from Defendants is substantially complete. However, certain deficiencies remain, and we are in ongoing discussions with Whitfield, Raines & Gerber LLP regarding the adequacy of the production. In particular, we have identified gaps in the following categories:

• NovaSpark's internal product development records, including source-code repository logs, version-control histories, and development sprint records, which we believe will demonstrate the incorporation of Lumos proprietary materials into NovaSpark's products.

• Communications between NovaSpark (including Anand) and Blackpine Capital Partners LP ("Blackpine"), NovaSpark's seed-stage investor. As you may be aware, NovaSpark closed a $12 million seed funding round with Blackpine on November 15, 2022—barely six weeks after NovaSpark's incorporation. The round was managed by Franklin Osei, a partner at Blackpine. We believe that NovaSpark's communications with Blackpine may contain representations about NovaSpark's technology and capabilities that are relevant to demonstrating the competitive advantage NovaSpark derived from the misappropriated trade secrets.

We are evaluating the need for a second round of written discovery targeted at these and other areas, as well as the potential necessity of a motion to compel with respect to the outstanding deficiencies. We will consult with you before filing any such motion and will keep you apprised of developments in our discussions with opposing counsel.

6. Protective Order

The Stipulated Protective Order was entered by the Court on March 15, 2023. The Protective Order establishes two tiers of confidentiality designations:

• "Confidential" — Materials designated as "Confidential" may be viewed by counsel, retained experts, and designated in-house personnel of the producing and receiving parties.

• "Attorneys' Eyes Only" — Materials designated as "Attorneys' Eyes Only" are restricted to outside counsel and retained experts only, and may not be shared with in-house personnel or business representatives of the receiving party without further agreement of the parties or order of the Court.

The Protective Order governs all discovery materials produced in the litigation, including the Brindoval forensic data, Lumos trade-secret materials, and all deposition transcripts and exhibits. To date, there have been no disputes between the parties regarding confidentiality designations. We continue to monitor designations on an ongoing basis and will promptly address any disputes that may arise.

7. Upcoming Milestones and Recommended Next Steps

Looking ahead, we identify the following milestones and offer our recommendations for next steps.

7.1 Remaining discovery and Damages Analysis

As fact discovery nears completion, the litigation will transition into the expert discovery phase. A central component of expert discovery will be damages quantification. Lumos's damages theory will need to address, among other things, the unjust enrichment realized by NovaSpark through its access to and use of Lumos's trade secrets, as well as the actual damages suffered by Lumos as a result of the misappropriation.

To that end, Meridian Cybersecurity Advisors Inc. (Naveen Kapoor, Senior Consultant) is assisting our team in preparing an unjust-enrichment analysis. This analysis focuses on the accelerated time-to-market that NovaSpark gained through access to Lumos's proprietary ML model architecture, feature-engineering libraries, DataStream ETL pipeline, and curated training dataset. Based on Meridian's preliminary assessment—which considers the complexity of the misappropriated technology, industry benchmarks for development timelines, and the scope of the materials taken—the estimated development time saved by NovaSpark as a result of the misappropriation is in the range of fourteen to eighteen (14–18) months. This represents an extraordinary competitive advantage, particularly in the rapidly evolving alternative-data analytics market in which Lumos operates.

A preliminary damages range is being developed in coordination with Meridian and our internal team. Given the sensitivity and privilege considerations associated with the damages analysis, further detail will be provided in a separate privileged memorandum. We expect to have a more refined damages estimate available for your review by late July or early August 2023.

7.2 Recommendation to Pursue Mediation

Based on the developments described in this letter, we believe this is an opportune time for Lumos to explore resolution of this matter through mediation. Several factors support this recommendation:

Strength of Forensic Evidence. The Brindoval Preliminary Forensic Report provides compelling, objective evidence that all three individual Defendants systematically extracted proprietary materials from Lumos and that those materials were deployed within NovaSpark's operations. This evidence is difficult for Defendants to explain away and creates significant exposure on the CUTSA and breach-of-PIIAA claims.

Favorable Preliminary Injunction. The Court's decision to grant a preliminary injunction on all five categories of trade secrets—following a contested hearing—represents a meaningful judicial endorsement of Lumos's position. It signals that the Court found a likelihood of success on the merits, which should weigh heavily in Defendants' settlement calculus.

Deposition Testimony. The depositions of Anand, Mallick, and Yun each produced admissions that are favorable to Lumos, including acknowledgments of the file transfers, concessions regarding the proprietary nature of the materials, and testimony confirming the compressed timeline of departures and the coordinated nature of the scheme.

Cost Effectiveness. Pursuing mediation at this stage would allow both parties to avoid the substantial costs associated with expert discovery, dispositive motions practice, and trial preparation. For Lumos, early resolution would also permit the Company to redirect management time and attention to its core business operations rather than ongoing litigation demands.

We believe the combination of these factors creates meaningful settlement leverage for Lumos and that Defendants, confronted with this evidence, may be receptive to exploring a resolution.

As a mediator, we would suggest the Honorable Eleanor Voss (Ret.) of the Tidewater Mediation Group, located at 160 West Santa Clara Street, Suite 1050, San Jose, California 95113. Judge Voss is a retired Santa Clara County Superior Court judge with substantial experience presiding over and mediating complex technology trade-secret disputes. She is highly regarded by the bench and bar in this area and has a strong track record of facilitating resolutions in cases of this nature.

We recommend that, with your authorization, we reach out to Patricia Whitfield and Samuel Gerber at Whitfield, Raines & Gerber LLP to gauge Defendants' interest in a mediation. If the parties are agreeable, we would target a mediation date in late August or early September 2023, which would allow sufficient time for both sides to prepare mediation briefs and for the parties to receive and consider any additional forensic or damages analysis that may be completed in the interim.

We would welcome your input on this recommendation at your earliest convenience and are happy to discuss it further by telephone or in person.

7.3 Investor Communication Considerations

We understand that Lumos's board of directors, including Jonathan Holt of Northstar Growth Equity and Helen Trask of Ridgeline Ventures, has been receiving periodic updates regarding the status of this litigation. To the extent that you would like members of our team to participate in any investor or board update—whether by telephone, video conference, or in person—we are available to do so and would be glad to assist in framing the status of the matter in a manner that is both informative and appropriately protective of privileged information.

In that regard, we strongly recommend that all communications regarding this matter—whether among Lumos's management team, between Lumos and its board, or between Lumos and its investors—remain subject to the protections of the attorney-client privilege. To preserve the privilege, any such communications should be made for the purpose of seeking or conveying legal advice, should include counsel in the communication loop, and should be marked as privileged and confidential. We are happy to provide further guidance on best practices for maintaining privilege in the investor-communication context if that would be helpful.

8. Fees and Costs Update

Calderwood & Harkness LLP's professional fees incurred through June 30, 2023 will be reflected in our forthcoming monthly invoice, which you should expect to receive in the ordinary course. The following team members are currently staffed on this matter:

In addition to professional fees, the following third-party costs have been incurred to date in connection with this matter:

• Brindoval Digital Forensics LLC. Fees for the forensic imaging conducted from March 22 through April 14, 2023, and the preparation and issuance of the Preliminary Forensic Report dated May 1, 2023. Pursuant to the Court's order and the parties' stipulation, Lumos's share of Brindoval's fees is forty percent (40%), with the remaining sixty percent (60%) allocated to Defendants/NovaSpark.

• Meridian Cybersecurity Advisors Inc. Consulting fees for Meridian's assistance in reviewing and interpreting the Brindoval forensic findings and for Meridian's ongoing work on the unjust-enrichment and damages analysis. These fees are borne entirely by Lumos.

A detailed fee and cost summary, including a breakdown of hours by timekeeper and a line-item accounting of third-party costs, can be provided upon request. Please do not hesitate to reach out if you would like us to prepare such a summary or if you have any questions regarding our billing.

9. Conclusion

Overall, the matter is progressing favorably, and Lumos is in a strong litigation posture. The forensic evidence confirmed by the Brindoval Preliminary Forensic Report, the preliminary injunction that remains in full force and effect, and the admissions obtained through the depositions of all three individual Defendants collectively provide robust support for Lumos's claims. Defendants face significant exposure on the trade-secret misappropriation and breach-of-contract claims, and we believe the evidentiary record developed to date provides meaningful leverage for settlement discussions.

We recommend discussing the mediation proposal outlined in Section 7.2 at your earliest convenience. If you are amenable, we can promptly initiate contact with opposing counsel to explore the possibility of a mediation session in late August or early September 2023. We are also happy to schedule a call or meeting to walk through any aspect of this update in greater detail.

The entire Calderwood & Harkness team—including Catherine Bloom, Wendy Schultz, and Omar Siddiqui—remains available to discuss this update or to address any other matter-related questions you may have. Please do not hesitate to contact me directly at any time.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Marcus Delgado Partner Telephone: (415) 555-7200

Email: mdelgado@calderwoodharkness.com

cc: Catherine Bloom, Calderwood & Harkness LLP Wendy Schultz, Calderwood & Harkness LLP

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION

This letter and any attachments hereto constitute a privileged and confidential attorney-client communication and are protected by the attorney-client privilege and the work-product doctrine. This letter is intended solely for the use of the addressees identified above and may contain information that is privileged, confidential, and exempt from disclosure under applicable law. This letter and its contents are not to be disclosed, disseminated, distributed, or copied to any third party without the prior written consent of Calderwood & Harkness LLP. If you have received this communication in error, please notify the sender immediately by telephone and destroy all copies of this letter and any attachments. Any unauthorized disclosure, distribution, or copying of this communication or its contents is strictly prohibited.

Team Member	Role	Hourly Rate
Marcus Delgado	Responsible Partner	$1,150/hr
Catherine Bloom	Billing Partner	$1,050/hr
Wendy Schultz	Lead Associate	$725/hr
Omar Siddiqui	Working Associate	$575/hr

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION / ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 555-7200 Facsimile: (415) 555-7201
125 Broad Street New York, New York 10004 Telephone: (212) 555-4400 Facsimile: (212) 555-4401
June 30, 2023
Via Email and First-Class Mail
Priya Chandrasekaran Chief Executive Officer Lumos Analytics Inc. 4700 Orchard Parkway, Suite 300 San Jose, California 95134
Thomas Brightwell General Counsel Lumos Analytics Inc. 4700 Orchard Parkway, Suite 300 San Jose, California 95134
Re: Quarterly Status Update — *Lumos Analytics Inc. v. NovaSpark Technologies Inc., et al. Case No. 23-CV-004871, Superior Court of the State of California, County of Santa Clara C&H Matter No. 1008-00005*
Dear Priya and Thomas:
1. Introduction and Purpose of Letter
This letter provides our quarterly status update for the second quarter of 2023 (Q2 2023) on the above-referenced matter. We are pleased to report significant progress on multiple fronts, and we believe Lumos Analytics Inc. ("Lumos" or the "Company") is in a strong litigation posture as we approach the second half of 2023.
As you know, this matter involves claims for trade-secret misappropriation, breach of contract, and related claims asserted by Lumos against NovaSpark Technologies Inc. ("NovaSpark"), Rajiv Anand, Serena Mallick, and Derek Yun (collectively, "Defendants"). The action was filed on January 19, 2023, and the operative Verified Complaint asserts causes of action under: (i) the California Uniform Trade Secrets Act ("CUTSA"), Cal. Civ. Code §§ 3426–3426.11; (ii) breach of the Proprietary Information and Inventions Assignment Agreement ("PIIAA") executed by each of the individual Defendants during their employment with Lumos; (iii) breach of the duty of loyalty; (iv) unfair business practices under the California Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq.; and (v) conversion. The claims arise from the coordinated departure of three senior Lumos engineers—Anand, Mallick, and Yun—who took proprietary materials with them and used those materials to build a directly competing product at NovaSpark, a company incorporated by Anand just three days after his resignation from Lumos.
Defendants are represented by Whitfield, Raines & Gerber LLP, with Patricia Whitfield and Samuel Gerber serving as lead counsel. The matter is assigned to the Honorable David Rutherford of the Santa Clara County Superior Court.
As summarized below, the second quarter saw significant progress across the injunctive relief, forensic investigation, and discovery phases of this litigation. The forensic evidence uncovered by the neutral examiner substantially corroborates Lumos's allegations, and the depositions of all three individual Defendants have been completed. We also wish to present our recommendation that Lumos consider pursuing mediation in the coming months to capitalize on the settlement leverage generated by these developments. Each of these items is addressed in detail below.
2. Summary of Prior Proceedings (Q1 2023)
For ease of reference, we briefly summarize the key proceedings from the first quarter of 2023, which laid the foundation for the significant progress achieved this quarter.
2.1 Temporary Restraining Order
On January 19, 2023—the same day the Verified Complaint was filed—we submitted an ex parte application for a Temporary Restraining Order ("TRO") on Lumos's behalf. The application was supported by the detailed sworn declarations of Priya Chandrasekaran, in her capacity as Chief Executive Officer of Lumos, and Rachel Fong, Vice President of Engineering, who provided specific testimony regarding the nature, value, and competitive significance of the misappropriated trade secrets, as well as the circumstances of the individual Defendants' departures.
On January 23, 2023, Judge Rutherford granted the TRO. The order required Defendants to: (a) immediately cease all use, access, copying, transmission, or exploitation of Lumos proprietary information, trade secrets, and confidential materials; (b) preserve all electronic devices, storage media, cloud storage accounts, and repositories in their possession, custody, or control that contained or may have contained Lumos proprietary information; and (c) refrain from destroying, deleting, modifying, or otherwise altering any documents, files, emails, messages, or other data relating to materials obtained from Lumos or communications regarding the individual Defendants' departures from Lumos and formation of NovaSpark.
The TRO was critical in establishing immediate protections for Lumos's proprietary materials and, equally important, in preserving the evidentiary record that has since proven pivotal during the forensic examination discussed in Section 3 below.
2.2 Preliminary Injunction
Defendants, through their counsel at Whitfield, Raines & Gerber LLP, filed their opposition to Lumos's motion for a preliminary injunction on February 2, 2023. The opposition principally argued that the materials at issue did not constitute protectable trade secrets and that Lumos could not demonstrate irreparable harm. We filed a comprehensive reply brief addressing each of these arguments.
The preliminary injunction hearing was held before Judge Rutherford on February 10, 2023. Following oral argument and the presentation of evidence, the Court granted Lumos's motion for a preliminary injunction on all five categories of trade secrets identified in the Verified Complaint. Specifically, the Court's ruling encompassed:
1. LumosEdge Ensemble ML Model Architecture — The proprietary neural-network topology and hyperparameter configurations underlying the LumosEdge platform, which represent years of research and development and constitute the core intellectual property of Lumos's flagship product.
2. Proprietary Feature-Engineering Libraries — The Company's feature-engineering libraries containing 2,847 individual engineered features, developed through extensive iterative testing and refinement, and representing a critical competitive advantage in Lumos's predictive analytics capabilities.
3. DataStream ETL Pipeline Codebase and Data-Schema Definitions — The codebase and associated data-schema definitions for the DataStream Extract, Transform, Load ("ETL") pipeline, covering data ingestion from 43 alternative-data vendors, and reflecting years of vendor-specific integration work and proprietary data-normalization processes.
4. Curated Training Dataset — The curated training dataset of approximately 14.6 terabytes, compiled and refined over several years at substantial cost, representing a proprietary asset that would be extremely difficult and expensive for a competitor to replicate independently.
5. Confidential Product Roadmap Documents (2023–2025) — Confidential product roadmap documents for 2023 through 2025, including the unreleased LumosEdge 3.0 specifications (a 37-page document), which detail strategic product plans, feature development timelines, and market positioning strategies not yet disclosed to the public.
The formal Preliminary Injunction Order was entered on February 17, 2023. As of the date of this letter, the preliminary injunction remains in full force and effect. We have not identified, and Defendants have not reported, any violations of the injunction to date. We continue to monitor compliance and will take immediate action should any violation come to our attention.
3. Forensic Examination — Brindoval Digital Forensics LLC
One of the most significant developments of Q2 2023 was the completion of the forensic imaging process and the issuance of the Preliminary Forensic Report, both of which substantially corroborate and strengthen Lumos's claims. We summarize the relevant developments below.
3.1 Appointment of Neutral Forensic Examiner
On March 8, 2023, following discussions between our team and Defendants' counsel at Whitfield, Raines & Gerber LLP, the parties entered into a stipulation—subsequently approved by the Court—for the appointment of Brindoval Digital Forensics LLC ("Brindoval") as the neutral forensic examiner in this matter. Brindoval is a nationally recognized digital forensics firm located at 1901 Harrison Street, Suite 600, Oakland, California 94612. The firm is led by Dr. Irene Chow, who serves as Managing Director and Lead Forensic Examiner, and Kevin Barr, Senior Forensic Analyst. Dr. Chow has extensive experience in technology-related trade-secret litigation and has served as a court-appointed forensic examiner in numerous matters in both state and federal court.
Pursuant to the Court's order and the parties' stipulation, the costs of the forensic examination are allocated sixty percent (60%) to Defendants/NovaSpark and forty percent (40%) to Lumos. This cost-sharing arrangement reflects the Court's recognition that the examination was necessitated primarily by the Defendants' alleged conduct, while also accounting for the fact that the examination serves the interests of both parties in establishing a clear evidentiary record.
3.2 Forensic Imaging
Brindoval conducted forensic imaging from March 22 through April 14, 2023. The scope of the forensic imaging was comprehensive and encompassed the following devices, systems, and accounts:
• NovaSpark Servers — All server infrastructure operated by NovaSpark Technologies Inc., including development servers, production servers, and backup systems.
• Defendants' Personal Devices — Three laptops belonging to Rajiv Anand, Serena Mallick, and Derek Yun, respectively; two mobile phones belonging to Anand and Mallick; and two external storage drives, including a USB drive bearing serial number WD-4837291, which belongs to Serena Mallick.
• Cloud Storage Accounts — The personal cloud storage accounts of the individual Defendants, including Rajiv Anand's personal Hollowell Health IT account and Derek Yun's personal Larkspur Technologies account.
Brindoval followed industry-standard forensic imaging protocols, including the creation of bit-for-bit forensic copies of all devices and the generation of cryptographic hash values to ensure the integrity and chain of custody of all imaged data. All forensic images are maintained in Brindoval's secure, access-controlled evidence repository in compliance with the Stipulated Protective Order discussed in Section 6 below.
3.3 Brindoval Preliminary Forensic Report (May 1, 2023)
On May 1, 2023, Brindoval issued its Preliminary Forensic Report (the "Report"). The Report's key findings confirm the presence of Lumos proprietary materials on NovaSpark systems and on the personal devices and accounts of all three individual Defendants. These findings are highly significant and substantially corroborate the allegations set forth in the Verified Complaint. Specifically, the Report confirmed the following:
(a) LumosEdge ML Model Architecture (Anand). Approximately 3.2 gigabytes (GB) of files matching Lumos's ML model architecture specifications and hyperparameter configurations were found on Rajiv Anand's personal Hollowell Health IT account and on NovaSpark's development and production servers. The files include proprietary neural-network topology diagrams, hyperparameter configuration files, and associated technical documentation. Metadata analysis indicates that these files were uploaded to Anand's personal Hollowell Health IT on or about September 26, 2022—four days before Anand's September 30, 2022 resignation from Lumos—and subsequently transferred to NovaSpark's servers in mid-October 2022.
(b) DataStream ETL Pipeline Repository (Mallick). The entire DataStream ETL pipeline repository, comprising approximately 780 megabytes (MB) of source code, data-schema definitions, and configuration files, was found on Serena Mallick's personal USB drive (serial number: WD-4837291). Identical copies of this repository were also identified on NovaSpark's development servers. The forensic evidence indicates that Mallick cloned the repository to her personal USB drive on or about October 10, 2022, four days before her October 14, 2022 resignation from Lumos.
(c) Feature-Engineering Code and Model-Training Scripts (Yun). Forty-seven (47) proprietary Jupyter notebooks containing feature-engineering code and model-training scripts developed at Lumos were found in Derek Yun's personal Larkspur Technologies account. These notebooks had been integrated into NovaSpark's development environment, indicating active use of the misappropriated materials in NovaSpark's product development efforts. The forensic evidence establishes that Yun downloaded these notebooks to his personal Larkspur Technologies on or about October 18, 2022, three days before his October 21, 2022 resignation.
(d) LumosEdge 3.0 Product Roadmap (Anand). The 37-page LumosEdge 3.0 Product Roadmap PDF—a highly confidential strategic document detailing Lumos's product plans through 2025—was found in Rajiv Anand's personal email archive at the address r.anand.personal@vaultmail.com. A copy of the same document was also found on NovaSpark's servers. Email metadata indicates that Anand forwarded this document to his personal email account on September 28, 2022, two days after the initial file transfer to his Hollowell Health IT and two days before his resignation.
In connection with our review of the Preliminary Forensic Report, Meridian Cybersecurity Advisors Inc. ("Meridian"), and specifically Naveen Kapoor, Senior Consultant at Meridian, has been assisting our team in reviewing and interpreting the forensic findings. Meridian's expertise has been instrumental in helping us contextualize the technical aspects of the Report and identify additional areas for investigation.
Taken together, the Brindoval findings substantially strengthen Lumos's position on all claims, particularly the CUTSA trade-secret misappropriation and breach of the PIIAA claims. The forensic evidence establishes a clear chain of custody demonstrating that all three individual Defendants systematically extracted proprietary materials from Lumos in the days immediately preceding their respective resignations, and that those materials were subsequently deployed within NovaSpark's operations. We anticipate that these findings will be highly persuasive at trial and provide significant leverage in any settlement discussions.
4. Fact discovery — Depositions
A central objective of Q2 2023 was the completion of depositions of the three individual Defendants. We are pleased to report that all three depositions have now been taken. The key highlights of each deposition are summarized below.
4.1 Deposition of Rajiv Anand (May 15, 2023)
The deposition of Rajiv Anand was conducted on May 15, 2023, at the offices of Calderwood & Harkness LLP, 555 California Street, 40th Floor, San Francisco, California. The deposition lasted approximately seven hours and covered the following key areas:
• September 26, 2022 File Transfer. Anand was questioned extensively about his transfer of approximately 3.2 GB of files—including LumosEdge ML model architecture specifications and hyperparameter configurations—to his personal Hollowell Health IT account on September 26, 2022. Anand acknowledged making the transfer but attempted to characterize the materials as non-proprietary "general reference materials" and "personal work product." This characterization is contradicted by the forensic evidence, which demonstrates that the transferred files include proprietary neural-network topology diagrams, configuration files, and documentation bearing Lumos's confidentiality markings.
• September 28, 2022 Email Forwarding. Anand was questioned regarding his forwarding of the 37-page LumosEdge 3.0 Product Roadmap to his personal email account at r.anand.personal@vaultmail.com on September 28, 2022. Anand acknowledged forwarding the document but claimed he did so "inadvertently" as part of a broader email organization effort. This explanation is difficult to reconcile with the targeted nature of the forwarding and the timing—just two days before his resignation.
• Incorporation of NovaSpark. Anand confirmed that he incorporated NovaSpark Technologies Inc. on October 3, 2022—just three days after his September 30, 2022 resignation from Lumos. This extraordinarily compressed timeline strongly suggests that Anand had been planning the formation of a competing enterprise while still employed at Lumos, and that the extraction of proprietary materials was undertaken in furtherance of that plan.
• Coordination with Mallick and Yun. Anand was questioned about his communications with Serena Mallick and Derek Yun regarding their departures from Lumos and their subsequent recruitment to NovaSpark. While Anand was evasive on certain points, the testimony confirmed that he had discussions with both Mallick and Yun prior to his own resignation regarding the formation of a new venture, and that he subsequently recruited both individuals to join NovaSpark within weeks of its incorporation.
• PIIAA Obligations. Anand was examined regarding his PIIAA obligations, including the restrictive covenant provisions. Anand acknowledged executing the PIIAA and confirmed his understanding that the agreement included: (i) a confidentiality obligation surviving for three years post-termination of employment; (ii) a non-solicitation of employees covenant for 12 months following departure; and (iii) a covenant not to use or disclose trade secrets. Anand maintained, however, that he did not believe the transferred materials fell within the scope of the PIIAA's protections—a position that is untenable in light of the forensic evidence and the Court's preliminary injunction ruling.
A detailed summary of Anand's deposition testimony was provided to you in our May 18, 2023 memorandum to file. We will not repeat the full analysis here but note that, on balance, Anand's testimony—and particularly his evasiveness and implausible explanations for the file transfers—was favorable to Lumos's position.
4.2 Deposition of Serena Mallick (June 7, 2023)
The deposition of Serena Mallick was conducted on June 7, 2023. The deposition lasted approximately six and one-half hours and covered the following key areas:
• October 10, 2022 USB Cloning. Mallick was examined at length about her October 10, 2022 cloning of the entire DataStream ETL pipeline repository to her personal USB drive (serial number: WD-4837291). Mallick acknowledged performing the cloning operation and confirmed that the cloned repository included source code, data-schema definitions, and configuration files for the DataStream ETL pipeline. Mallick attempted to justify the transfer by claiming she was backing up "personal notes" and "work samples," but she conceded under further questioning that the repository contained the entirety of the DataStream codebase covering ingestion from 43 alternative-data vendors—a far more comprehensive set of materials than mere personal notes.
• Rapid Transition to NovaSpark. Mallick confirmed the following timeline: she resigned from Lumos on October 14, 2022, and began her role as Vice President of Engineering at NovaSpark on October 17, 2022—a gap of only one business day (over the intervening weekend). This rapid transition strongly suggests advance planning and coordination with Anand.
• Communications with Anand. Mallick acknowledged having had communications with Anand prior to her departure from Lumos regarding the formation of NovaSpark and her potential role at the new company. She was evasive about the precise timing and content of these discussions but did not deny that they occurred during her employment at Lumos.
• Work at NovaSpark. Mallick was questioned about her work at NovaSpark building data pipeline infrastructure. While she attempted to minimize the connection between her work at NovaSpark and the misappropriated DataStream materials, the forensic evidence—showing copies of the DataStream repository on NovaSpark's development servers—undermines her testimony on this point.
Mallick's testimony contained significant admissions regarding the USB transfer and her awareness of the proprietary nature of the DataStream codebase. In particular, she conceded that she understood the DataStream repository was subject to confidentiality protections under her PIIAA and that she did not obtain authorization from anyone at Lumos to copy the repository to a personal device. A detailed summary of Mallick's deposition was provided in our June 12, 2023 memorandum to file.
4.3 Deposition of Derek Yun (June 22, 2023)
The deposition of Derek Yun was conducted on June 22, 2023, completing the deposition schedule for all three individual Defendants. The deposition covered the following key areas:
• October 18, 2022 Larkspur Technologies Download. Yun was examined regarding his October 18, 2022 download of 47 proprietary Jupyter notebooks—containing feature-engineering code and model-training scripts—to his personal Larkspur Technologies account. Yun acknowledged the download but contested the characterization of certain notebooks as proprietary to Lumos.
• Knowledge of Proprietary Nature. Yun was questioned about his knowledge of the proprietary nature of the feature-engineering libraries and model-training scripts. Despite initial resistance, Yun conceded that the feature-engineering libraries represented significant investment by Lumos and that he was aware they were considered proprietary by the Company.
• Use of Materials at NovaSpark. Yun was questioned about his use of the downloaded materials in NovaSpark's product development environment. The forensic evidence demonstrates that the 47 Jupyter notebooks were integrated into NovaSpark's development environment, and Yun's testimony on this point was guarded but not fully exculpatory.
• Timeline of Departure. Yun confirmed the following timeline: he downloaded the notebooks on October 18, 2022; resigned from Lumos on October 21, 2022; and commenced employment at NovaSpark on October 24, 2022. This pattern is consistent with the coordinated extraction-and-departure sequence exhibited by all three individual Defendants.
A detailed summary memorandum regarding Yun's deposition testimony is currently being finalized and will be distributed to you shortly.
5. Additional discovery — Written discovery Status
In addition to the deposition program described above, we have been pursuing written discovery to build a comprehensive evidentiary record. On March 20, 2023, we served Plaintiff's First Set of Requests for Production of Documents and Plaintiff's First Sets of Special Interrogatories to both Rajiv Anand and NovaSpark Technologies Inc.
Responses to these discovery requests have been received, and document production from Defendants is substantially complete. However, certain deficiencies remain, and we are in ongoing discussions with Whitfield, Raines & Gerber LLP regarding the adequacy of the production. In particular, we have identified gaps in the following categories:
• NovaSpark's internal product development records, including source-code repository logs, version-control histories, and development sprint records, which we believe will demonstrate the incorporation of Lumos proprietary materials into NovaSpark's products.
• Communications between NovaSpark (including Anand) and Blackpine Capital Partners LP ("Blackpine"), NovaSpark's seed-stage investor. As you may be aware, NovaSpark closed a $12 million seed funding round with Blackpine on November 15, 2022—barely six weeks after NovaSpark's incorporation. The round was managed by Franklin Osei, a partner at Blackpine. We believe that NovaSpark's communications with Blackpine may contain representations about NovaSpark's technology and capabilities that are relevant to demonstrating the competitive advantage NovaSpark derived from the misappropriated trade secrets.
We are evaluating the need for a second round of written discovery targeted at these and other areas, as well as the potential necessity of a motion to compel with respect to the outstanding deficiencies. We will consult with you before filing any such motion and will keep you apprised of developments in our discussions with opposing counsel.
6. Protective Order
The Stipulated Protective Order was entered by the Court on March 15, 2023. The Protective Order establishes two tiers of confidentiality designations:
• "Confidential" — Materials designated as "Confidential" may be viewed by counsel, retained experts, and designated in-house personnel of the producing and receiving parties.
• "Attorneys' Eyes Only" — Materials designated as "Attorneys' Eyes Only" are restricted to outside counsel and retained experts only, and may not be shared with in-house personnel or business representatives of the receiving party without further agreement of the parties or order of the Court.
The Protective Order governs all discovery materials produced in the litigation, including the Brindoval forensic data, Lumos trade-secret materials, and all deposition transcripts and exhibits. To date, there have been no disputes between the parties regarding confidentiality designations. We continue to monitor designations on an ongoing basis and will promptly address any disputes that may arise.
7. Upcoming Milestones and Recommended Next Steps
Looking ahead, we identify the following milestones and offer our recommendations for next steps.
7.1 Remaining discovery and Damages Analysis
As fact discovery nears completion, the litigation will transition into the expert discovery phase. A central component of expert discovery will be damages quantification. Lumos's damages theory will need to address, among other things, the unjust enrichment realized by NovaSpark through its access to and use of Lumos's trade secrets, as well as the actual damages suffered by Lumos as a result of the misappropriation.
To that end, Meridian Cybersecurity Advisors Inc. (Naveen Kapoor, Senior Consultant) is assisting our team in preparing an unjust-enrichment analysis. This analysis focuses on the accelerated time-to-market that NovaSpark gained through access to Lumos's proprietary ML model architecture, feature-engineering libraries, DataStream ETL pipeline, and curated training dataset. Based on Meridian's preliminary assessment—which considers the complexity of the misappropriated technology, industry benchmarks for development timelines, and the scope of the materials taken—the estimated development time saved by NovaSpark as a result of the misappropriation is in the range of fourteen to eighteen (14–18) months. This represents an extraordinary competitive advantage, particularly in the rapidly evolving alternative-data analytics market in which Lumos operates.
A preliminary damages range is being developed in coordination with Meridian and our internal team. Given the sensitivity and privilege considerations associated with the damages analysis, further detail will be provided in a separate privileged memorandum. We expect to have a more refined damages estimate available for your review by late July or early August 2023.
7.2 Recommendation to Pursue Mediation
Based on the developments described in this letter, we believe this is an opportune time for Lumos to explore resolution of this matter through mediation. Several factors support this recommendation:
Strength of Forensic Evidence. The Brindoval Preliminary Forensic Report provides compelling, objective evidence that all three individual Defendants systematically extracted proprietary materials from Lumos and that those materials were deployed within NovaSpark's operations. This evidence is difficult for Defendants to explain away and creates significant exposure on the CUTSA and breach-of-PIIAA claims.
Favorable Preliminary Injunction. The Court's decision to grant a preliminary injunction on all five categories of trade secrets—following a contested hearing—represents a meaningful judicial endorsement of Lumos's position. It signals that the Court found a likelihood of success on the merits, which should weigh heavily in Defendants' settlement calculus.
Deposition Testimony. The depositions of Anand, Mallick, and Yun each produced admissions that are favorable to Lumos, including acknowledgments of the file transfers, concessions regarding the proprietary nature of the materials, and testimony confirming the compressed timeline of departures and the coordinated nature of the scheme.
Cost Effectiveness. Pursuing mediation at this stage would allow both parties to avoid the substantial costs associated with expert discovery, dispositive motions practice, and trial preparation. For Lumos, early resolution would also permit the Company to redirect management time and attention to its core business operations rather than ongoing litigation demands.
We believe the combination of these factors creates meaningful settlement leverage for Lumos and that Defendants, confronted with this evidence, may be receptive to exploring a resolution.
As a mediator, we would suggest the Honorable Eleanor Voss (Ret.) of the Tidewater Mediation Group, located at 160 West Santa Clara Street, Suite 1050, San Jose, California 95113. Judge Voss is a retired Santa Clara County Superior Court judge with substantial experience presiding over and mediating complex technology trade-secret disputes. She is highly regarded by the bench and bar in this area and has a strong track record of facilitating resolutions in cases of this nature.
We recommend that, with your authorization, we reach out to Patricia Whitfield and Samuel Gerber at Whitfield, Raines & Gerber LLP to gauge Defendants' interest in a mediation. If the parties are agreeable, we would target a mediation date in late August or early September 2023, which would allow sufficient time for both sides to prepare mediation briefs and for the parties to receive and consider any additional forensic or damages analysis that may be completed in the interim.
We would welcome your input on this recommendation at your earliest convenience and are happy to discuss it further by telephone or in person.
7.3 Investor Communication Considerations
We understand that Lumos's board of directors, including Jonathan Holt of Northstar Growth Equity and Helen Trask of Ridgeline Ventures, has been receiving periodic updates regarding the status of this litigation. To the extent that you would like members of our team to participate in any investor or board update—whether by telephone, video conference, or in person—we are available to do so and would be glad to assist in framing the status of the matter in a manner that is both informative and appropriately protective of privileged information.
In that regard, we strongly recommend that all communications regarding this matter—whether among Lumos's management team, between Lumos and its board, or between Lumos and its investors—remain subject to the protections of the attorney-client privilege. To preserve the privilege, any such communications should be made for the purpose of seeking or conveying legal advice, should include counsel in the communication loop, and should be marked as privileged and confidential. We are happy to provide further guidance on best practices for maintaining privilege in the investor-communication context if that would be helpful.
8. Fees and Costs Update
Calderwood & Harkness LLP's professional fees incurred through June 30, 2023 will be reflected in our forthcoming monthly invoice, which you should expect to receive in the ordinary course. The following team members are currently staffed on this matter:
In addition to professional fees, the following third-party costs have been incurred to date in connection with this matter:
• Brindoval Digital Forensics LLC. Fees for the forensic imaging conducted from March 22 through April 14, 2023, and the preparation and issuance of the Preliminary Forensic Report dated May 1, 2023. Pursuant to the Court's order and the parties' stipulation, Lumos's share of Brindoval's fees is forty percent (40%), with the remaining sixty percent (60%) allocated to Defendants/NovaSpark.
• Meridian Cybersecurity Advisors Inc. Consulting fees for Meridian's assistance in reviewing and interpreting the Brindoval forensic findings and for Meridian's ongoing work on the unjust-enrichment and damages analysis. These fees are borne entirely by Lumos.
A detailed fee and cost summary, including a breakdown of hours by timekeeper and a line-item accounting of third-party costs, can be provided upon request. Please do not hesitate to reach out if you would like us to prepare such a summary or if you have any questions regarding our billing.
9. Conclusion
Overall, the matter is progressing favorably, and Lumos is in a strong litigation posture. The forensic evidence confirmed by the Brindoval Preliminary Forensic Report, the preliminary injunction that remains in full force and effect, and the admissions obtained through the depositions of all three individual Defendants collectively provide robust support for Lumos's claims. Defendants face significant exposure on the trade-secret misappropriation and breach-of-contract claims, and we believe the evidentiary record developed to date provides meaningful leverage for settlement discussions.
We recommend discussing the mediation proposal outlined in Section 7.2 at your earliest convenience. If you are amenable, we can promptly initiate contact with opposing counsel to explore the possibility of a mediation session in late August or early September 2023. We are also happy to schedule a call or meeting to walk through any aspect of this update in greater detail.
The entire Calderwood & Harkness team—including Catherine Bloom, Wendy Schultz, and Omar Siddiqui—remains available to discuss this update or to address any other matter-related questions you may have. Please do not hesitate to contact me directly at any time.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Marcus Delgado Partner Telephone: (415) 555-7200
Email: mdelgado@calderwoodharkness.com
cc: Catherine Bloom, Calderwood & Harkness LLP Wendy Schultz, Calderwood & Harkness LLP
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION
This letter and any attachments hereto constitute a privileged and confidential attorney-client communication and are protected by the attorney-client privilege and the work-product doctrine. This letter is intended solely for the use of the addressees identified above and may contain information that is privileged, confidential, and exempt from disclosure under applicable law. This letter and its contents are not to be disclosed, disseminated, distributed, or copied to any third party without the prior written consent of Calderwood & Harkness LLP. If you have received this communication in error, please notify the sender immediately by telephone and destroy all copies of this letter and any attachments. Any unauthorized disclosure, distribution, or copying of this communication or its contents is strictly prohibited.
Team Member | Role | Hourly Rate
Marcus Delgado | Responsible Partner | $1,150/hr
Catherine Bloom | Billing Partner | $1,050/hr
Wendy Schultz | Lead Associate | $725/hr
Omar Siddiqui | Working Associate | $575/hr

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION / ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP

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