1008-00005 · Lumos Analytics Inc · Matter Administration

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PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP 555 California Street, 40th Floor San Francisco, California 94104

November 5, 2023

MEMORANDUM

TO: File — Matter No. 1008-00005

FROM: Wendy Schultz, Lead Associate, intellectual Property

RE: Matter Closing Memorandum — Lumos Analytics Inc. v. NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun, Superior Court of the State of California, County of Santa Clara, Case No. 23-CV-004871

COPIES: Marcus Delgado (Responsible Partner); Catherine Bloom (Billing Partner); Omar Siddiqui (Working Associate)

I. EXECUTIVE SUMMARY

This memorandum is prepared to memorialize the conclusion and final disposition of the above-captioned trade-secret misappropriation matter and to document all key events, outcomes, and financial information for the firm's permanent file. The memorandum is intended to serve as the definitive closing record for Matter No. 1008-00005, and it should be maintained as part of the firm's archived matter files in accordance with Calderwood & Harkness LLP's document retention policies.

The Client. Calderwood & Harkness LLP represented Lumos Analytics Inc. ("Lumos" or "Lumos AI"), a Delaware-incorporated, California-headquartered software-as-a-service ("SaaS") and financial technology company specializing in artificial-intelligence-driven financial analytics for institutional asset managers. Lumos's Chief Executive Officer is Priya Chandrasekaran, and its General Counsel is Thomas Brightwell. The company maintains its principal place of business at 4700 Orchard Parkway, Suite 300, San Jose, California 95134.

The Defendants. The defendants in this action were NovaSpark Technologies Inc. ("NovaSpark"), a competing Delaware-incorporated startup, and three former Lumos employees: Rajiv Anand, Serena Mallick, and Derek Yun (collectively, with NovaSpark, the "Defendants"). Defendants were represented throughout the litigation by Whitfield, Raines & Gerber LLP, with Patricia Whitfield serving as Lead Partner and Samuel Gerber serving as Senior Associate. The offices of defense counsel are located at 235 Montgomery Street, Suite 1800, San Francisco, California 94104.

Matter Timeline. The matter was opened on January 19, 2023, and closed on November 5, 2023, spanning approximately nine and one-half months from filing through final dismissal.

Disposition. The matter was resolved through a negotiated settlement reached at mediation and memorialized in a fully executed Settlement Agreement and Mutual Release dated September 22, 2023. The principal terms of the settlement included a lump-sum monetary payment of $4,350,000 from NovaSpark to Lumos, a stipulated permanent injunction prohibiting the Defendants from possessing, using, disclosing, or exploiting any Lumos trade secrets, and a comprehensive forensic remediation protocol to ensure the verified deletion and destruction of all Lumos proprietary materials in the Defendants' possession. The case was dismissed with prejudice by Hon. David Rutherford on November 5, 2023. All settlement obligations have been fully performed.

II. BACKGROUND AND PARTIES

A. The Client — Lumos Analytics Inc.

Lumos Analytics Inc. was founded in approximately 2017 and is incorporated in the State of Delaware. The company is headquartered in San Jose, California, at 4700 Orchard Parkway, Suite 300, San Jose, California 95134. Lumos's Employer Identification Number ("EIN") is 82-4713956, and its Delaware File Number is 6518274.

Lumos operates in the financial technology sector, providing AI-driven analytical tools and services to institutional asset managers, including mutual funds, pension funds, endowments, and hedge funds. The company's flagship product is LumosEdge, a proprietary platform built on ensemble machine-learning models that generates predictive signals for equity and fixed-income portfolio optimization. LumosEdge is widely regarded within the institutional finance community as a leading analytical tool for alternative-data-driven investment decision-making.

In addition to LumosEdge, Lumos developed and maintains a proprietary extract, transform, and load ("ETL") system known as DataStream. DataStream is responsible for ingesting, normalizing, and processing alternative financial data from forty-three (43) distinct vendor sources. The DataStream system represents a significant and ongoing engineering investment by Lumos and constitutes a critical component of the company's technology infrastructure.

As of the date the complaint was filed, Lumos employed approximately 340 individuals. The company reported annual recurring revenue ("ARR") of approximately $67 million for the fiscal year ending December 31, 2022. Lumos has raised a total of approximately $185 million in venture capital funding through its Series D financing round. Key investors include:

• Ridgeline Ventures — Lead investor in Lumos's Series B round, investing $40 million in 2019. The General Partner on the Ridgeline investment is Helen Trask, who serves as a board observer.

• Northstar Growth Equity — Lead investor in Lumos's Series D round, investing $72 million in June 2022. The Managing Director on the Northstar investment is Jonathan Holt, who holds a seat on Lumos's board of directors.

These details regarding Lumos's business, technology, and financial position are relevant to understanding the significance of the trade secrets at issue, the magnitude of the potential harm from the Defendants' misappropriation, and the valuation framework underlying the damages analysis and settlement.

B. The Defendants

1. NovaSpark Technologies Inc.

NovaSpark Technologies Inc. is a Delaware-incorporated startup company headquartered at 88 Bluxome Street, Floor 4, San Francisco, California 94107. The company was incorporated on October 3, 2022, by defendant Rajiv Anand, just three days after Anand's resignation from Lumos. NovaSpark's EIN is 88-3291047, and its Delaware File Number is 7294183.

NovaSpark purports to offer AI-driven alternative-data analytics for hedge funds and proprietary trading desks. The company's stated market focus and product positioning directly overlap with Lumos's core market and the functionality of the LumosEdge platform. This direct competitive overlap was a central factor in the urgency of the litigation and the decision to seek immediate injunctive relief.

NovaSpark received a $12 million seed financing round from Blackpine Capital Partners LP, a venture capital fund whose Managing Partner is Franklin Osei. The seed round closed on November 15, 2022 — approximately six weeks after NovaSpark's incorporation and while the individual Defendants still possessed Lumos proprietary materials on their personal devices and cloud storage accounts. The timing of this funding, combined with the evidence of misappropriation discussed in Section IV below, suggests that Lumos's proprietary technology may have been used, at least in part, to accelerate NovaSpark's product development efforts and to bolster its pitch to prospective investors.

2. Rajiv Anand

Rajiv Anand is thirty-seven (37) years of age and, at the time of the litigation, resided at 1482 Mariposa Avenue, Palo Alto, California 94306. Mr. Anand was employed by Lumos as a Principal Engineer — ML Infrastructure from March 2019 through September 30, 2022. In this role, Mr. Anand served as a key architect of the LumosEdge signal-generation engine and had access to the company's most sensitive proprietary codebases, model architectures, hyperparameter configurations, and training data.

Mr. Anand resigned from Lumos on September 30, 2022, effective immediately. Three days later, on October 3, 2022, Mr. Anand incorporated NovaSpark Technologies Inc. in the State of Delaware and assumed the role of Chief Executive Officer and co-founder. Upon joining Lumos in March 2019, Mr. Anand executed Lumos's standard Proprietary Information and Inventions Assignment Agreement ("PIIAA"), which included confidentiality, non-solicitation, and restrictive covenant provisions, as described in greater detail in Section V below.

3. Serena Mallick

Serena Mallick is thirty-four (34) years of age and, at the time of the litigation, resided at 578 Guerrero Street, Apartment 3B, San Francisco, California 94110. Ms. Mallick was employed by Lumos as a Senior Software Engineer — Data Pipelines from June 2020 through October 14, 2022. In this capacity, Ms. Mallick was responsible for building and maintaining the proprietary DataStream ETL pipelines, and she possessed extensive knowledge of the system's architecture, data-schema definitions, and integration points with Lumos's alternative-data vendor network.

Ms. Mallick resigned from Lumos on October 14, 2022, and joined NovaSpark as Vice President of Engineering on October 17, 2022 — just three days after her departure from Lumos. Upon her hire at Lumos in June 2020, Ms. Mallick executed the same standard PIIAA and restrictive covenant agreement.

4. Derek Yun

Derek Yun is thirty-one (31) years of age and, at the time of the litigation, resided at 2241 Cowper Street, Apartment 12, Palo Alto, California 94301. Mr. Yun was employed by Lumos as a Machine Learning Engineer II from January 2021 through October 21, 2022. In his role, Mr. Yun had direct access to proprietary training datasets, model hyperparameters, and feature-engineering libraries used in the development and refinement of LumosEdge's predictive models.

Mr. Yun resigned from Lumos on October 21, 2022, and joined NovaSpark as a founding engineer on October 24, 2022, three days after his resignation. Like Mr. Anand and Ms. Mallick, Mr. Yun executed Lumos's standard PIIAA and restrictive covenant agreement upon his initial hire.

The pattern of departures — three key technical employees resigning in rapid succession over a period of approximately three weeks between late September and late October 2022, each joining NovaSpark within days of their respective departures — was a significant factor prompting Lumos's internal investigation and the subsequent discovery of evidence of misappropriation.

III. TRADE SECRETS AT ISSUE

The complaint identified five distinct categories of proprietary technology and information that Lumos alleged constituted trade secrets under the California Uniform Trade Secrets Act, California Civil Code sections 3426 through 3426.11 ("CUTSA"). Each category was the subject of substantial protective measures by Lumos, including access controls, encryption, and the PIIAA obligations described in Section V. The five categories are as follows:

1. LumosEdge Ensemble Machine-Learning Model Architecture. This category encompasses the proprietary neural-network topology, ensemble model design, and hyperparameter configurations that form the foundation of the LumosEdge signal-generation engine. The architecture represents years of iterative research and development and embodies Lumos's core competitive advantage in predictive analytics for institutional portfolio management.

2. Proprietary Feature-Engineering Libraries. Lumos developed and maintains a comprehensive library of 2,847 individually engineered features specifically designed for financial signal generation. These features represent a substantial investment of engineering time and domain expertise, and their specific composition and configuration are not publicly known or readily ascertainable.

3. DataStream ETL Pipeline Codebase and Data-Schema Definitions. The DataStream system's codebase, together with its data-schema definitions covering ingestion from forty-three (43) alternative-data vendors, constitutes a critical piece of Lumos's proprietary technology infrastructure. The pipeline codebase reflects not only the software logic for data extraction, transformation, and loading, but also the specific vendor integration protocols, data-normalization methodologies, and error-handling procedures developed by Lumos over several years.

4. Curated and Labeled Training Dataset. Lumos assembled a curated and labeled training dataset of approximately 14.6 terabytes of historical financial and alternative data. This dataset was used to train and validate the LumosEdge machine-learning models. The curation and labeling of this dataset represents a substantial investment of both computational resources and expert human judgment, and the dataset's specific composition and labeling conventions are proprietary to Lumos.

5. Confidential Product Roadmap Documents for 2023–2025. This category includes Lumos's unreleased product roadmap documents, most notably the thirty-seven-page (37-page) PDF detailing the specifications for LumosEdge 3.0, Lumos's next-generation platform. These documents contain confidential strategic planning information, projected feature sets, anticipated release timelines, and planned market positioning that, if disclosed to a competitor, could cause significant competitive harm.

All five categories of trade secrets were addressed in the Stipulated Permanent Injunction entered by the Court on October 4, 2023, as described in Section IX.A below.

IV. EVIDENCE OF MISAPPROPRIATION

On December 12, 2022, Lumos's internal IT security team identified anomalous data-exfiltration activity in connection with the final weeks of the three individual Defendants' employment at Lumos. The IT security review was initiated as part of a routine post-departure audit prompted by the unusual pattern of nearly simultaneous resignations by key technical employees. The investigation revealed specific, documented exfiltration events attributable to each of the three individual Defendants, as described below.

Rajiv Anand. On September 26, 2022 — four days before his resignation — Mr. Anand transferred approximately 3.2 gigabytes (GB) of files from Lumos's internal systems to a personal Hollowell Health IT account. The transferred files included model architecture specifications, hyperparameter configuration files, and related technical documentation for the LumosEdge signal-generation engine. Two days later, on September 28, 2022, Mr. Anand forwarded the confidential LumosEdge 3.0 Product Roadmap PDF — a thirty-seven-page document containing Lumos's strategic product plans for 2023 through 2025 — to his personal email account at r.anand.personal@vaultmail.com. These exfiltration activities were documented through Lumos's internal access logs, email gateway records, and cloud-storage audit trails.

Serena Mallick. On October 10, 2022 — four days before her resignation — Ms. Mallick cloned the entire DataStream ETL pipeline repository, comprising approximately 780 megabytes (MB) of source code, configuration files, and data-schema definitions, to a personal external USB drive. The USB drive was identified by its serial number as WD-4837291. The cloning activity was recorded in Lumos's source-code repository access logs and endpoint-monitoring systems.

Derek Yun. On October 18, 2022 — three days before his resignation — Mr. Yun downloaded forty-seven (47) proprietary Jupyter notebooks to a personal Larkspur Technologies account. The notebooks contained feature-engineering code, model-training scripts, and associated documentation related to the LumosEdge machine-learning models. The download activity was captured by Lumos's data-loss-prevention ("DLP") monitoring tools and confirmed through Larkspur Technologies audit logs obtained during discovery.

Significantly, none of the three individual Defendants returned company materials or confirmed the deletion of Lumos proprietary information upon their respective departures, in direct violation of their obligations under the PIIAA. Each Defendant's PIIAA contained an explicit requirement to return all company materials upon termination of employment, and Lumos's standard offboarding process included a reminder of this obligation. The Defendants' failure to comply with these obligations heightened the urgency of the matter and supported the decision to seek immediate injunctive relief.

The exfiltration events identified by Lumos's IT security team were subsequently confirmed and corroborated by the neutral forensic examination conducted by Brindoval Digital Forensics LLC, as discussed in Section VII.B below.

V. RESTRICTIVE COVENANT AND CONTRACTUAL PROVISIONS

Each of the three individual Defendants — Rajiv Anand, Serena Mallick, and Derek Yun — executed Lumos's standard Proprietary Information and Inventions Assignment Agreement ("PIIAA") upon the commencement of their respective employment with the company. The PIIAA is Lumos's principal contractual mechanism for protecting its intellectual property and confidential information, and it is a condition of employment for all employees with access to proprietary technology and trade secrets. The PIIAA contains the following key provisions relevant to this matter:

Assignment of Inventions. The PIIAA includes an assignment-of-all-inventions clause, pursuant to which each employee assigns to Lumos all right, title, and interest in any inventions, developments, improvements, or works of authorship conceived, created, or reduced to practice during the course of employment, whether or not made during working hours or using Lumos resources, to the extent such inventions relate to Lumos's business or are created using Lumos's proprietary information.

Confidentiality and Non-Disclosure. The PIIAA contains a confidentiality and non-disclosure provision that survives the termination of employment for a period of three (3) years. This provision prohibits the departing employee from using or disclosing any confidential or proprietary information of Lumos, including but not limited to trade secrets, technical data, business plans, customer lists, financial information, and product roadmaps.

Non-Solicitation of Employees. The PIIAA includes a non-solicitation-of-employees clause that prohibits the departing employee from directly or indirectly soliciting, recruiting, or inducing any Lumos employee to leave Lumos's employ for a period of twelve (12) months following the employee's separation from the company.

Covenant Not to Use or Disclose Trade Secrets. In addition to the time-limited confidentiality provision, the PIIAA contains a separate restrictive covenant prohibiting the employee from using or disclosing Lumos trade secrets at any time, without temporal limitation. This covenant is consistent with the indefinite protection afforded to trade secrets under the CUTSA.

Return of Company Materials. The PIIAA requires that, upon termination of employment for any reason, the employee must immediately return all company materials, including documents, files, data, devices, and storage media, and must certify in writing that all such materials have been returned and that no copies have been retained.

The existence and enforceability of the PIIAA provisions formed the basis for the breach-of-contract cause of action (Second Cause of Action) in the complaint and were central to the Court's decision to grant the temporary restraining order and preliminary injunction, as discussed in Section VII.A below.

VI. ENGAGEMENT AND PRE-LITIGATION PHASE

December 15, 2022 — Retention of Calderwood & Harkness LLP. Lumos retained Calderwood & Harkness LLP to represent it in connection with the suspected trade-secret misappropriation. The engagement letter was executed on December 15, 2022, and was addressed to Thomas Brightwell, General Counsel of Lumos. The firm's internal staffing assignments were as follows: Marcus Delgado was designated as Responsible Partner; Catherine Bloom was designated as Billing Partner; Wendy Schultz was designated as Lead Associate; and Omar Siddiqui was designated as Working Associate. The matter was assigned Calderwood & Harkness Matter Number 1008-00005.

January 5, 2023 — Internal Case Assessment. An internal case assessment and litigation strategy memorandum was prepared, analyzing the strength of Lumos's claims, the available evidence of misappropriation, the enforceability of the PIIAA provisions, the prospects for obtaining emergency injunctive relief, and the anticipated discovery and forensic examination needs. The memorandum also identified the key risks associated with the litigation, including potential challenges to the enforceability of the restrictive covenant under California law, the risk of evidence destruction by the Defendants, and the need to establish the trade-secret status of each category of proprietary information with specificity.

January 9, 2023 — Cease-and-Desist Letters. Marcus Delgado, on behalf of Lumos, sent formal cease-and-desist letters to each of the individual Defendants — Rajiv Anand (at 1482 Mariposa Avenue, Palo Alto, CA 94306), Serena Mallick (at 578 Guerrero Street, Apt 3B, San Francisco, CA 94110), and Derek Yun (at 2241 Cowper Street, Apt 12, Palo Alto, CA 94301) — as well as to NovaSpark Technologies Inc. (at 88 Bluxome Street, Floor 4, San Francisco, CA 94107). Each letter demanded the immediate return of all Lumos proprietary materials, the cessation of all use of Lumos trade secrets and confidential information, and the preservation of all evidence related to the suspected misappropriation. The letters also stated Lumos's intention to pursue all available legal remedies in the event of non-compliance.

No substantive response was received from any of the Defendants or from NovaSpark.

January 11, 2023 — Evidence Preservation Notice. An evidence preservation and internal hold notice memorandum was sent by the firm to Thomas Brightwell, General Counsel of Lumos, and to Rachel Fong, Vice President of Engineering, directing the preservation of all documents, communications, system logs, and other materials potentially relevant to the anticipated litigation. The memorandum outlined the scope of the litigation hold, identified categories of custodians and data sources subject to preservation, and provided guidance on compliance with the hold obligations.

VII. LITIGATION CHRONOLOGY

A. Filing of Complaint and TRO/Preliminary Injunction Phase

January 19, 2023 — Verified Complaint Filed. On January 19, 2023, Calderwood & Harkness LLP filed a Verified Complaint on behalf of Lumos in the Superior Court of the State of California, County of Santa Clara, initiating Case No. 23-CV-004871. The case was assigned to Hon. David Rutherford. The Verified Complaint asserted five causes of action against NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun:

1. First Cause of Action — Misappropriation of Trade Secrets under the California Uniform Trade Secrets Act, California Civil Code sections 3426 through 3426.11, against all Defendants.

2. Second Cause of Action — Breach of Contract (PIIAA) against Rajiv Anand, Serena Mallick, and Derek Yun.

3. Third Cause of Action — Breach of Duty of Loyalty against Rajiv Anand, Serena Mallick, and Derek Yun.

4. Fourth Cause of Action — Unfair Business Practices under California Business and Professions Code section 17200, against all Defendants.

5. Fifth Cause of Action — Conversion against all Defendants.

January 19, 2023 — Ex Parte Application for TRO. Simultaneously with the filing of the Verified Complaint, Calderwood & Harkness LLP filed an ex parte application for a Temporary Restraining Order ("TRO") and an Order to Show Cause regarding a Preliminary Injunction. The application was supported by a detailed memorandum of points and authorities, as well as declarations from Priya Chandrasekaran, Chief Executive Officer of Lumos, and Rachel Fong, Vice President of Engineering. Ms. Chandrasekaran's declaration addressed the business significance of Lumos's trade secrets and the competitive harm that would result from their unauthorized use. Ms. Fong's declaration provided detailed technical testimony regarding the nature of the proprietary technology at issue, the Defendants' access to that technology during their employment, and the evidence of data exfiltration identified by the IT security team.

January 23, 2023 — TRO Granted. Hon. David Rutherford granted the TRO on January 23, 2023, entering an order that required the Defendants to: (a) immediately cease all use, disclosure, and exploitation of Lumos proprietary information and trade secrets; (b) preserve all electronic devices, storage media, and cloud storage accounts containing or potentially containing Lumos materials; and (c) refrain from destroying, deleting, altering, or concealing any documents, files, data, or other materials relating to the subject matter of the litigation. The TRO was critical in establishing an immediate protective framework to prevent further dissemination or use of Lumos's proprietary technology while the motion for a preliminary injunction was briefed and argued.

February 2, 2023 — Opposition to Preliminary Injunction. Defendants, through their counsel at Whitfield, Raines & Gerber LLP (Patricia Whitfield and Samuel Gerber), filed their opposition to Lumos's motion for a preliminary injunction. The Defendants' principal arguments included that the information at issue did not qualify as trade secrets because certain elements were publicly available or well-known in the machine-learning research community, that Lumos had not taken adequate measures to protect its claimed trade secrets, and that the individual Defendants' knowledge and skill were not protectable under California law. The Defendants also contested the scope of the requested injunction as overbroad.

February 7, 2023 — Reply Memorandum. Calderwood & Harkness LLP filed a reply memorandum in support of the preliminary injunction motion, addressing each of the Defendants' objections and supplementing the factual record with additional evidence of the proprietary nature and competitive significance of the trade secrets at issue. The reply emphasized that the information taken by the Defendants went far beyond general industry knowledge or publicly available machine-learning techniques, and included highly specific and proprietary model configurations, curated datasets, and strategic business documents.

February 10, 2023 — Preliminary Injunction Hearing. The Court conducted a hearing on Lumos's motion for a preliminary injunction on February 10, 2023. After considering the parties' briefs, declarations, and oral arguments, Judge Rutherford granted Lumos's motion on all five categories of trade secrets. The Court found that Lumos had demonstrated a likelihood of success on the merits of its trade-secret misappropriation claim, that the balance of hardships tipped in Lumos's favor, and that irreparable harm would result absent injunctive relief.

February 17, 2023 — Preliminary Injunction Order Issued. The formal Preliminary Injunction Order was issued by Hon. David Rutherford on February 17, 2023. The order incorporated the protections of the TRO and expanded them to provide broader and more detailed injunctive relief covering all five categories of trade secrets, pending the final resolution of the case.

B. Discovery Phase

March 8, 2023 — Appointment of Neutral Forensic Examiner. The parties entered into a stipulation, which was approved by the Court, appointing Brindoval Digital Forensics LLC as the neutral forensic examiner in the case. The forensic examination was to be led by Dr. Irene Chow, Managing Director and Lead Forensic Examiner, with assistance from Kevin Barr, Senior Forensic Analyst. Brindoval's offices are located at 1901 Harrison Street, Suite 600, Oakland, California 94612. Pursuant to the stipulation and Court order, the costs of the forensic examination were allocated sixty percent (60%) to the Defendants/NovaSpark and forty percent (40%) to Lumos. The early appointment of a neutral forensic examiner was a strategic priority for the Calderwood & Harkness team, as it ensured that evidence would be preserved and analyzed by an independent, credible third party whose findings would carry significant weight in any subsequent settlement negotiations or trial proceedings.

March 15, 2023 — Protective Order Entered. A stipulated protective order was entered by the Court, establishing two tiers of confidentiality designations for materials produced and exchanged during discovery: "Confidential" and "Attorneys' Eyes Only." The protective order governed the handling, use, and disclosure of all confidential materials produced by either party and was essential to safeguarding Lumos's trade secrets throughout the discovery process while permitting the Defendants' counsel to conduct an adequate defense.

March 20, 2023 — Written discovery Served. Lumos served its first set of discovery requests, including Plaintiff's First Set of Requests for Production of Documents on all Defendants, and Plaintiff's First Set of Special Interrogatories on Rajiv Anand and NovaSpark Technologies Inc. The discovery requests were targeted at obtaining documents and information relating to the formation and operations of NovaSpark, the individual Defendants' activities during and after their employment at Lumos, the use of Lumos proprietary materials at NovaSpark, and communications between the Defendants regarding the planned departure from Lumos and the establishment of NovaSpark.

March 22, 2023 – April 14, 2023 — Forensic Imaging. Over this period, Brindoval Digital Forensics LLC conducted forensic imaging of NovaSpark's servers, the personal devices of the three individual Defendants (totaling three laptops, two mobile phones, and two external drives), and their respective cloud storage accounts, including the Hollowell Health IT, Larkspur Technologies, and email accounts implicated in the data-exfiltration events. The forensic imaging process was conducted in accordance with industry-standard protocols for digital forensic examination and chain-of-custody procedures.

May 1, 2023 — Preliminary Forensic Report. Brindoval issued its Preliminary Forensic Report on May 1, 2023. The report confirmed the presence of Lumos proprietary materials on NovaSpark systems and on the personal devices of all three individual Defendants. Specifically, the report identified Lumos-origin files matching the categories of trade secrets described in the complaint — including model architecture files, feature-engineering code, DataStream ETL pipeline source code, training data fragments, and the LumosEdge 3.0 Product Roadmap PDF — on multiple devices and storage platforms. The Brindoval findings provided independent, objective corroboration of the evidence of misappropriation initially identified by Lumos's internal IT security team and significantly strengthened Lumos's position in the litigation.

May 5, 2023 — Internal Analysis of Forensic Findings. Working Associate Omar Siddiqui prepared an internal memorandum analyzing the Brindoval Preliminary Forensic Report findings. The analysis was conducted in consultation with Naveen Kapoor of Meridian Cybersecurity Advisors Inc., an external cybersecurity consulting firm located at 2100 Geng Road, Suite 210, Palo Alto, California 94303. The memorandum assessed the forensic evidence in the context of the legal elements of the CUTSA claim, identified additional discovery follow-up items, and provided an updated assessment of the strength of Lumos's case.

May 15, 2023 — Deposition of Rajiv Anand. The deposition of Rajiv Anand was conducted at Calderwood & Harkness LLP's San Francisco office. The deposition covered Mr. Anand's employment at Lumos, his access to proprietary technology, the circumstances of his resignation, the incorporation of NovaSpark, his knowledge of the data-exfiltration events, and the use of Lumos materials in NovaSpark's product development efforts.

June 7, 2023 — Deposition of Serena Mallick. The deposition of Serena Mallick was conducted, covering similar subject matter with particular focus on her role in developing and maintaining the DataStream ETL pipeline, the cloning of the ETL pipeline repository to a personal USB drive, and her activities after joining NovaSpark as Vice President of Engineering.

June 22, 2023 — Deposition of Derek Yun. The deposition of Derek Yun was conducted, focusing on his access to proprietary training datasets and feature-engineering libraries, the downloading of the Jupyter notebooks to his personal Larkspur Technologies account, and his work at NovaSpark as a founding engineer.

June 30, 2023 — Quarterly Client Update. A quarterly client status update letter was sent to Priya Chandrasekaran (CEO) and Thomas Brightwell (General Counsel), summarizing the progress of the litigation, the key findings from the Brindoval forensic examination and depositions, the anticipated next steps, and the current budget status.

August 15, 2023 — Damages Analysis and Settlement Valuation. An internal damages analysis and settlement valuation memorandum was prepared by the Calderwood & Harkness team, incorporating analysis from Naveen Kapoor of Meridian Cybersecurity Advisors Inc. The memorandum assessed the potential damages available to Lumos under the CUTSA and related claims and evaluated the merits and risks of the case to establish a recommended settlement range.

C. Damages Analysis

The damages analysis considered multiple theories of recovery available under the CUTSA, including actual loss suffered by Lumos, unjust enrichment realized by NovaSpark, and the possibility of exemplary damages for willful and malicious misappropriation. The primary damages metric utilized was unjust enrichment, measured by the value of the accelerated development time that NovaSpark obtained through access to Lumos's trade secrets rather than investing the time and resources to develop equivalent technology independently.

Based on the analysis conducted by the Calderwood & Harkness team in consultation with Meridian Cybersecurity Advisors Inc., the estimated unjust enrichment to NovaSpark was in the range of $8.7 million (low estimate) to $12.4 million (high estimate). These figures were based on an assessment that NovaSpark saved approximately fourteen (14) to eighteen (18) months of development time through its access to Lumos's proprietary technology, valued at the cost of equivalent engineering resources and the competitive advantage gained during the acceleration period.

Taking into account the strength of the evidence, the risks of continued litigation (including trial uncertainty, the possibility of appeal, and the potential for reduced damages findings), and the client's primary objective of securing comprehensive injunctive and remedial relief to protect its proprietary technology going forward, the firm recommended a settlement target range of $4 million to $6 million in monetary relief, coupled with robust injunctive relief and a comprehensive forensic remediation protocol.

VIII. MEDIATION AND SETTLEMENT

A. Mediation

September 6, 2023 — Full-Day Mediation. A full-day mediation session was conducted on September 6, 2023, before Hon. Eleanor Voss (Ret.) at the offices of Tidewater Mediation Group, located at 160 West Santa Clara Street, Suite 1050, San Jose, California 95113. Judge Voss was selected by agreement of the parties based on her extensive experience mediating complex commercial disputes, including technology and intellectual property matters, during her judicial career and in her subsequent mediation practice.

In advance of the mediation, Calderwood & Harkness LLP submitted a confidential mediation brief on behalf of Lumos on August 30, 2023. The brief presented a comprehensive summary of the facts, the legal claims, the evidence of misappropriation (including the Brindoval forensic findings), the damages analysis, and Lumos's settlement objectives. The mediation brief was tailored to provide Judge Voss with a clear and persuasive presentation of Lumos's position while also identifying the areas of potential compromise that could facilitate a negotiated resolution.

The mediation session was attended by Marcus Delgado and Wendy Schultz for Calderwood & Harkness LLP; Thomas Brightwell and Priya Chandrasekaran for Lumos; Patricia Whitfield and Samuel Gerber for Whitfield, Raines & Gerber LLP; and representatives of NovaSpark and the individual Defendants. Through extended joint and separate sessions facilitated by Judge Voss, the parties reached a settlement in principle by the conclusion of the mediation on September 6, 2023.

B. Settlement Terms

September 8, 2023 — Proposed Settlement Term Sheet. Following the mediation, Marcus Delgado transmitted a proposed settlement term sheet to Patricia Whitfield on September 8, 2023, memorializing the terms agreed to in principle at mediation and including additional proposed provisions to implement the settlement framework.

September 22, 2023 — Execution of Settlement Agreement. The Settlement Agreement and Mutual Release was fully executed on September 22, 2023, by all parties to the litigation: Lumos Analytics Inc., NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun. The executed agreement reflects the final, negotiated terms of the settlement. The key terms are as follows:

1. Monetary Relief. NovaSpark Technologies Inc. agreed to pay Lumos Analytics Inc. a lump-sum settlement payment of Four Million Three Hundred Fifty Thousand Dollars ($4,350,000) within thirty (30) days of execution of the Settlement Agreement, establishing a payment deadline of October 22, 2023. The settlement payment was received by Lumos on October 18, 2023, four (4) days prior to the contractual deadline. Payment was made by wire transfer to Lumos's designated account, as confirmed by Thomas Brightwell.

2. Stipulated Permanent Injunction. The parties agreed to the entry of a Stipulated Permanent Injunction permanently enjoining all Defendants — NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun — from possessing, using, disclosing, or exploiting any Lumos trade secrets, as defined in the five categories identified in the complaint and set forth in the injunction.

3. Forensic Remediation. The Settlement Agreement required the complete forensic remediation of all Lumos proprietary materials, including the verified deletion and destruction of all Lumos files, code, data, and documents from all NovaSpark systems (servers, workstations, and repositories), all personal devices of the three individual Defendants (laptops, phones, and external drives), and all cloud storage accounts (including Hollowell Health IT, Larkspur Technologies, and personal email accounts). The forensic remediation was to be conducted under the supervision of Brindoval Digital Forensics LLC, with oversight from Meridian Cybersecurity Advisors Inc.

4. Personal Covenants. Each of the three individual Defendants — Rajiv Anand, Serena Mallick, and Derek Yun — personally covenanted not to use, disclose, or exploit Lumos trade secrets in any future employment, consulting engagement, or business venture for a period of five (5) years from the effective date of the Settlement Agreement, September 22, 2023. This five-year personal covenant extends well beyond the three-year confidentiality survival period in the original PIIAA, reflecting the enhanced protections negotiated in the settlement.

5. Audit Rights. Brindoval Digital Forensics LLC retains audit rights over NovaSpark Technologies Inc. for a period of eighteen (18) months from the effective date of the Settlement Agreement. These audit rights permit Brindoval to conduct periodic inspections and forensic examinations of NovaSpark's systems to verify ongoing compliance with the terms of the settlement and the Stipulated Permanent Injunction.

6. NovaSpark Continued Operations. The Settlement Agreement permits NovaSpark Technologies Inc. to continue its operations, subject to the condition that any competing products or services must be developed using only independently created technology or publicly available technology and data. NovaSpark's compliance with this requirement is subject to the audit rights described above. This provision reflects a balanced approach that achieves Lumos's primary objective of protecting its proprietary technology without imposing a complete shutdown of NovaSpark's business.

7. Mutual Non-Disparagement. The Settlement Agreement includes a mutual non-disparagement clause, pursuant to which all parties agree to refrain from making disparaging or derogatory statements about any other party in connection with the litigation, the underlying facts, or the terms of the settlement.

8. Confidentiality of Settlement Terms. The terms of the Settlement Agreement are confidential and may not be disclosed by any party, except as required by law, regulation, or court order. The sole exception is the Stipulated Permanent Injunction, which was filed with the Court and is a matter of public record.

9. Forensic Examiner Costs. The total fees charged by Brindoval Digital Forensics LLC for the forensic examination and remediation were $218,600. These costs were allocated in accordance with the Court's original cost-allocation order and as reaffirmed in the Settlement Agreement: sixty percent (60%) to the Defendants/NovaSpark ($131,160) and forty percent (40%) to Lumos ($87,440).

Settlement as Percentage of Estimated Unjust Enrichment. The monetary component of the settlement ($4,350,000) represents approximately 50.0% of the low estimate of unjust enrichment ($4.35 million ÷ $8.7 million) and approximately 35.1% of the high estimate ($4.35 million ÷ $12.4 million). While the monetary recovery falls below the full estimated range of unjust enrichment, the settlement must be evaluated in its totality, including the significant non-monetary relief obtained — the stipulated permanent injunction, the forensic remediation, the five-year personal covenants, and the eighteen-month audit rights — which collectively achieve the client's primary objective of comprehensively protecting its proprietary technology.

IX. POST-SETTLEMENT IMPLEMENTATION

A. Stipulated Permanent Injunction

October 4, 2023 — Entry of Stipulated Permanent Injunction. On October 4, 2023, the Stipulated Permanent Injunction (Injunction-by-Consent) was filed with the Superior Court of the State of California, County of Santa Clara, and entered by Hon. David Rutherford. The injunction permanently enjoins NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun from possessing, using, disclosing, or exploiting any of the five categories of Lumos trade secrets identified in the complaint, including:

(a) the LumosEdge ensemble machine-learning model architecture, including proprietary neural-network topology and hyperparameter configurations;

(b) the proprietary feature-engineering libraries containing 2,847 individually engineered features for financial signal generation;

(c) the DataStream ETL pipeline codebase and data-schema definitions covering ingestion from forty-three (43) alternative-data vendors;

(d) the curated and labeled training dataset of approximately 14.6 terabytes of historical financial and alternative data; and

(e) the confidential product roadmap documents for 2023–2025, including the unreleased LumosEdge 3.0 specifications.

The Stipulated Permanent Injunction is enforceable by the Court through contempt proceedings and constitutes a permanent, binding legal prohibition on the Defendants' use of Lumos trade secrets.

B. Forensic Remediation

October 3, 2023 — Remediation Protocol Letter. On October 3, 2023, Lead Associate Wendy Schultz transmitted a letter to Dr. Irene Chow at Brindoval Digital Forensics LLC outlining the forensic remediation protocol and scope in accordance with the terms of the Settlement Agreement. The letter specified the categories of materials to be remediated, the systems and devices subject to remediation, the verification procedures to be employed, and the reporting requirements upon completion.

October 4–30, 2023 — Forensic Remediation Conducted. Over the period from October 4 through October 30, 2023, Brindoval Digital Forensics LLC conducted the forensic remediation under the direction of Dr. Irene Chow and Kevin Barr, with oversight provided by Meridian Cybersecurity Advisors Inc. (Naveen Kapoor). The remediation encompassed the comprehensive identification, verified deletion, and destruction of all Lumos proprietary materials from the following systems and devices:

• NovaSpark Technologies Inc. corporate servers, workstations, and source-code repositories;

• Rajiv Anand's personal laptop, Hollowell Health IT account, and personal email account (r.anand.personal@vaultmail.com);

• Serena Mallick's personal laptop, external USB drive (serial number WD-4837291), and any associated cloud storage accounts;

• Derek Yun's personal laptop, Larkspur Technologies account, and any associated cloud storage accounts; and

• All mobile devices and secondary storage media in the possession of the individual Defendants.

The remediation process included forensic verification of complete deletion, sector-level overwriting of deleted files to prevent recovery, and confirmation that no copies of Lumos materials remained on any of the remediated systems or devices.

October 31, 2023 — Final Forensic Remediation Certification. On October 31, 2023, Brindoval Digital Forensics LLC issued its Final Forensic Remediation Certification. The certification confirmed that all Lumos proprietary materials have been verified as deleted and destroyed from all NovaSpark systems and from all personal devices and cloud storage accounts of the three individual Defendants, Rajiv Anand, Serena Mallick, and Derek Yun. The certification was signed by Dr. Irene Chow and Kevin Barr.

November 1, 2023 — Internal Verification Memorandum. Working Associate Omar Siddiqui prepared an internal memorandum confirming the completeness and sufficiency of the Brindoval Final Forensic Remediation Certification. The memorandum incorporated Meridian Cybersecurity Advisors Inc.'s independent verification of the remediation, confirming that Meridian had reviewed and validated Brindoval's procedures and findings. Based on this review, the memorandum recommended that the firm proceed with the filing of the stipulation of dismissal with prejudice.

C. Dismissal

November 1, 2023 — Stipulation and Proposed Order of Dismissal Filed. On November 1, 2023, a Stipulation and Proposed Order of Dismissal with Prejudice was filed with the Court. The stipulation was signed by Marcus Delgado on behalf of Lumos Analytics Inc. and by Patricia Whitfield on behalf of the Defendants. The stipulation provided that the action would be dismissed with prejudice as to all parties and all causes of action, with each side to bear its own costs and attorneys' fees except as otherwise provided in the Settlement Agreement.

November 5, 2023 — Dismissal Entered. On November 5, 2023, Hon. David Rutherford entered the Order of Dismissal with Prejudice, dismissing Case No. 23-CV-004871 in its entirety. The dismissal marks the formal conclusion of the litigation.

X. FEES AND COSTS SUMMARY

A. Calderwood & Harkness LLP Fees

Total professional fees billed by Calderwood & Harkness LLP for this matter were $1,287,450. The billing rates for the attorneys staffed on the matter were as follows:

The total fees reflect time expended across all phases of the engagement, including pre-litigation investigation and strategy, the TRO and preliminary injunction proceedings, written discovery and forensic examination coordination, depositions, damages analysis, mediation preparation and attendance, settlement negotiation and documentation, and post-settlement implementation.

B. Third-Party Costs

The following third-party vendors were engaged in connection with this matter. Their total fees and cost allocations are summarized below:

C. Total Cost to Lumos

The total expenditure incurred by Lumos in connection with this matter, inclusive of Calderwood & Harkness professional fees and the Lumos-allocated shares of third-party costs, is summarized below:

Net Recovery to Lumos After Costs. The net recovery to Lumos, after deducting total litigation costs from the settlement payment received, is as follows:

Settlement payment received: $4,350,000

Less: Total Lumos expenditure: ($1,478,440)

Net recovery to Lumos: $2,871,560

XI. KEY DOCUMENTS INDEX

The following is an index of key documents generated or received during the course of this matter. All documents are maintained in the firm's document management system under Matter No. 1008-00005 and should be preserved in accordance with the firm's document retention policies.

1. Engagement Letter (December 15, 2022)

2. Case Assessment and Litigation Strategy Memorandum (January 5, 2023)

3. Cease-and-Desist Letters to Rajiv Anand, Serena Mallick, Derek Yun, and NovaSpark Technologies Inc. (January 9, 2023)

4. Evidence Preservation and Internal Hold Notice Memorandum (January 11, 2023)

5. Verified Complaint (January 19, 2023)

6. Ex Parte Application for Temporary Restraining Order and Supporting Declarations of Priya Chandrasekaran and Rachel Fong (January 19, 2023)

7. Order Granting Temporary Restraining Order (January 23, 2023)

8. Preliminary Injunction Order (February 17, 2023)

9. Stipulation and Order Appointing Brindoval Digital Forensics LLC as Neutral Forensic Examiner (March 8, 2023)

10. Stipulated Protective Order (March 15, 2023)

11. Plaintiff's First Set of Requests for Production of Documents and Special Interrogatories (March 20, 2023)

12. Brindoval Digital Forensics LLC — Preliminary Forensic Report (May 1, 2023)

13. Deposition Transcript — Rajiv Anand (May 15, 2023)

14. Deposition Transcript — Serena Mallick (June 7, 2023)

15. Deposition Transcript — Derek Yun (June 22, 2023)

16. Internal Damages Analysis and Settlement Valuation Memorandum (August 15, 2023)

17. Confidential Mediation Brief (August 30, 2023)

18. Settlement Agreement and Mutual Release (September 22, 2023)

19. Stipulated Permanent Injunction (October 4, 2023)

20. Brindoval Digital Forensics LLC — Final Forensic Remediation Certification (October 31, 2023)

21. Stipulation and Order of Dismissal with Prejudice (November 5, 2023)

XII. LESSONS LEARNED AND OBSERVATIONS

The following observations are offered for the benefit of the firm and future matter teams in comparable trade-secret misappropriation cases:

Rapid Injunctive Relief Strategy. The decision to pursue an ex parte TRO application simultaneously with the filing of the Verified Complaint proved to be critical to the successful outcome of this matter. The TRO, granted within four days of filing, immediately halted further use of Lumos's trade secrets by the Defendants and, equally important, compelled the preservation of evidence on the Defendants' devices and systems. Without the preservation order, there was a significant risk that the Defendants would have deleted or destroyed the very materials that subsequently formed the evidentiary foundation for Lumos's case. The preliminary injunction, granted on all five categories of trade secrets, further reinforced Lumos's position and signaled the Court's view of the strength of the claims, which in turn influenced the trajectory of settlement negotiations.

Early Appointment of Neutral Forensic Examiner. The stipulated appointment of Brindoval Digital Forensics LLC as a neutral forensic examiner early in the case was a strategic decision that yielded substantial dividends. Brindoval's independent findings, confirming the presence of Lumos proprietary materials on NovaSpark's systems and the individual Defendants' personal devices, provided credible, objective corroboration of Lumos's misappropriation allegations. The neutral character of the forensic examiner's findings — as opposed to findings generated by a party-retained expert — carried particular weight in settlement discussions and contributed significantly to the Defendants' willingness to negotiate a meaningful resolution.

Mediation. The full-day mediation before Hon. Eleanor Voss (Ret.) at Tidewater Mediation Group was productive and well-timed. By the time of the mediation, the key facts had been established through forensic examination and depositions, and both sides had a clear understanding of the strengths and weaknesses of their respective positions. Judge Voss's experience and mediation skills were instrumental in facilitating a constructive dialogue and bridging the remaining gaps between the parties' positions. The decision to conduct mediation before incurring the additional costs of expert retention, motions practice, and trial preparation was consistent with the client's interest in achieving an efficient resolution.

Settlement Evaluation. The settlement of $4,350,000, while below the full estimated unjust-enrichment range of $8.7 million to $12.4 million, must be evaluated in the context of the comprehensive non-monetary relief obtained. The stipulated permanent injunction, the forensic remediation with independent verification, the five-year personal covenants, and the eighteen-month audit rights collectively achieve the client's primary objective of protecting its proprietary technology and ensuring that the Defendants cannot benefit from their misappropriation going forward. The monetary settlement, combined with these non-monetary protections, represents a favorable outcome that avoids the risks, costs, and delays associated with continued litigation through trial and potential appeal.

Forensic Remediation Protocol. The forensic remediation protocol, with Brindoval conducting the remediation under the oversight of Meridian Cybersecurity Advisors Inc., provided strong assurance that Lumos's proprietary materials have been comprehensively purged from the Defendants' possession. The dual-layer verification — Brindoval's remediation and certification, independently verified by Meridian — established a robust evidentiary record confirming compliance and provides a foundation for enforcement action in the event of any future violation.

Ongoing Compliance Mechanism. The eighteen-month audit rights retained by Brindoval over NovaSpark provide an ongoing compliance monitoring mechanism that extends well beyond the date of dismissal. These audit rights serve as a meaningful deterrent against any future misuse of Lumos trade secrets and give Lumos a practical tool for verifying NovaSpark's compliance with the settlement terms and the Stipulated Permanent Injunction.

XIII. MATTER CLOSURE

The following information summarizes the final status and closure of this matter:

All settlement obligations have been fully performed. The monetary settlement payment of $4,350,000 was received on October 18, 2023. The Stipulated Permanent Injunction was entered by the Court on October 4, 2023. The forensic remediation was completed and certified by Brindoval Digital Forensics LLC on October 31, 2023, with independent verification by Meridian Cybersecurity Advisors Inc. The case was dismissed with prejudice on November 5, 2023.

This file may be archived in accordance with Calderwood & Harkness LLP's document retention policies. The eighteen-month audit rights under the Settlement Agreement remain in effect through March 22, 2025, and any future inquiries related to the exercise of those audit rights should be directed to Marcus Delgado, Responsible Partner.

XIV. SIGNATURE BLOCK

Prepared by:

________________________________________

Wendy Schultz Lead Associate, intellectual Property Calderwood & Harkness LLP

Date: November 5, 2023

Reviewed and Approved by: