1008-00005 · Lumos Analytics Inc · Pre-Litigation

cease-desist-anand.docx DOCUMENT Litigation

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CALDERWOOD & HARKNESS LLP ATTORNEYS AT LAW

555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 693-2000	Facsimile: (415) 693-2222
125 Broad Street, New York, New York 10004 Telephone: (212) 558-4000	Facsimile: (212) 558-3588

Marcus Delgado Partner, intellectual Property Direct Dial: (415) 693-2145

Email: mdelgado@calderwoodharkness.com

January 9, 2023

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED AND VIA EMAIL

CONFIDENTIAL

Rajiv Anand 1482 Mariposa Avenue Palo Alto, California 94306

Re: Misappropriation of Trade Secrets and Confidential Information of Lumos Analytics Inc.; Breach of Proprietary Information and Inventions Assignment Agreement ("PIIAA")

Dear Mr. Anand:

This firm represents Lumos Analytics Inc. ("Lumos" or the "Company"), a Delaware-incorporated, California-headquartered software-as-a-service company specializing in AI-driven financial analytics, with its principal place of business at 4700 Orchard Parkway, Suite 300, San Jose, California 95134. We write on behalf of Lumos to demand that you immediately cease and desist from all unauthorized use, possession, retention, and disclosure of Lumos's proprietary and trade-secret information, and that you comply fully and without further delay with your contractual obligations under the Proprietary Information and Inventions Assignment Agreement ("PIIAA") that you executed in connection with your employment at Lumos.

The facts and circumstances described in this letter are serious. They reflect a pattern of deliberate, premeditated misappropriation of Lumos's most valuable intellectual property and trade secrets, orchestrated in conjunction with your departure from the Company and the immediate formation of a directly competing enterprise. Lumos expects your prompt attention to this matter and full compliance with the demands set forth below.

Background — Employment and Contractual Obligations

You served as Principal Engineer — ML Infrastructure at Lumos from March 2019 through September 30, 2022 — a period of approximately three and one-half years. In that capacity, you were a key architect of the LumosEdge signal-generation engine, Lumos's flagship product and the core technology underlying the Company's market-leading AI-driven alternative-data analytics platform. By virtue of your role, you were afforded access to Lumos's most sensitive proprietary codebases, training data, machine-learning model architectures, hyperparameter configurations, feature-engineering libraries, data-pipeline infrastructure, and confidential business information, including strategic product roadmaps, revenue data, customer information, and financial projections.

Upon commencing your employment with Lumos in March 2019, you executed Lumos's standard Proprietary Information and Inventions Assignment Agreement. You acknowledged at that time, by your signature, that you understood and agreed to be bound by the terms and conditions of the PIIAA. The PIIAA contains the following operative provisions, among others, each of which remains in full force and effect as applicable:

(a) Assignment of Inventions. All inventions, developments, discoveries, improvements, works of authorship, and other work product created, conceived, reduced to practice, or developed by you during your employment with Lumos, whether or not during working hours and whether or not using Lumos resources, that relate to Lumos's actual or anticipated business, research, or development, are and shall remain the sole and exclusive property of Lumos.

(b) Confidentiality and Non-Disclosure. You agreed not to use or disclose, either during or after your employment with Lumos, any Confidential Information (as defined in the PIIAA) of the Company, except as required in the performance of your duties for Lumos. This non-disclosure obligation survives the termination of your employment for a period of three (3) years following the date of your separation from the Company.

(c) Non-Solicitation of Employees. For a period of twelve (12) months following the termination of your employment with Lumos for any reason, you agreed not to directly or indirectly solicit, recruit, induce, or encourage any employee of Lumos to leave the Company's employ, or to hire or engage any person who was an employee of Lumos at any time during the twelve (12) months preceding your separation.

(d) Covenant Regarding Trade Secrets. You agreed not to use or disclose Lumos's trade secrets at any time, without limitation as to duration, consistent with applicable law.

(e) Return of Company Materials. Upon termination of your employment for any reason, you agreed to immediately return to Lumos all Company materials, documents, data, equipment, and property in your possession, custody, or control, and to certify in writing the complete deletion of all Lumos proprietary information from all personal devices, accounts, and storage media.

These provisions reflect the serious and legitimate interests that Lumos has in protecting the trade secrets and confidential information that form the bedrock of its business. You were well aware of these obligations at all times during and after your employment.

Background — Anand's Resignation and Formation of NovaSpark Technologies Inc.

On September 30, 2022, you resigned from Lumos, effective immediately, without providing the customary notice period. Your abrupt departure was, in itself, unusual and concerning.

A mere three days later, on October 3, 2022, you incorporated NovaSpark Technologies Inc. ("NovaSpark") in the State of Delaware, under Delaware File Number 7294183. NovaSpark is headquartered at 88 Bluxome Street, Floor 4, San Francisco, California 94107. According to publicly available materials, NovaSpark purports to offer AI-driven alternative-data analytics for hedge funds and proprietary trading desks — a market that directly and substantially overlaps with Lumos's core business and the very business line to which you devoted the entirety of your tenure at Lumos.

The rapid formation of NovaSpark — clearly planned and prepared well in advance of your resignation, as evidenced by the events described below — strongly indicates that you were planning your departure and the launch of a competing venture while still employed by Lumos and bound by your duty of loyalty to the Company.

In November 2022, NovaSpark reportedly received approximately $12 million in seed funding from Blackpine Capital Partners LP. The speed with which NovaSpark secured significant venture funding further suggests that the venture was pitched to investors using information, technology, and know-how derived from your work at Lumos.

Compounding these concerns, two other former Lumos employees — Serena Mallick, formerly Senior Software Engineer — Data Pipelines, and Derek Yun, formerly ML Engineer II — also resigned from Lumos shortly after your departure and subsequently joined NovaSpark. The timing and coordinated nature of these departures, combined with the immediate formation and rapid capitalization of a directly competing company, raise grave concerns regarding the misappropriation of Lumos's proprietary information and trade secrets, as well as violations of the non-solicitation provisions of your PIIAA.

Specific Acts of Misappropriation and Breach

Lumos's internal IT security investigation, initiated on December 12, 2022, upon identification of anomalous data-exfiltration activity in the Company's systems, has revealed the following unauthorized conduct by you. The investigation is ongoing, and the Company reserves the right to supplement or amend these findings as additional information comes to light.

September 26, 2022 — Unauthorized Transfer of 3.2 GB to Personal Hollowell Health IT

On September 26, 2022 — four days before your resignation — you transferred approximately 3.2 gigabytes of files from Lumos's secure internal systems to a personal Hollowell Health IT account. Lumos's endpoint monitoring and data-loss-prevention systems have identified the files transferred as including, among other materials, model architecture specifications and hyperparameter configuration files for the LumosEdge ensemble machine-learning models. These materials constitute some of Lumos's most valuable and closely guarded intellectual property. They were developed over the course of years at enormous expense and represent the technical foundation upon which the LumosEdge platform is built.

This transfer was entirely unauthorized. At no time did Lumos grant you permission to copy, download, export, or transfer any proprietary files to a personal account or personal device for any purpose. This conduct constitutes a clear and serious breach of the confidentiality and non-disclosure provisions of your PIIAA, as well as a misappropriation of Lumos trade secrets under applicable law.

September 28, 2022 — Forwarding of LumosEdge 3.0 Product Roadmap

On September 28, 2022 — two days before your resignation — you accessed and forwarded the confidential document titled "LumosEdge 3.0 Product Roadmap" to your personal email address at r.anand.personal@vaultmail.com. The LumosEdge 3.0 Product Roadmap is a 37-page PDF document containing Lumos's unreleased product specifications, strategic development plans, competitive positioning analysis, and go-to-market strategy for the period 2023 through 2025. This document is among the most closely guarded confidential materials within Lumos. Access to the document was restricted to a limited number of senior personnel, and each copy was designated "Strictly Confidential — Internal Use Only."

The deliberate forwarding of this document to a personal email account on the eve of your departure to found a directly competing company is not accidental or inadvertent. It constitutes a willful and premeditated act of misappropriation, undertaken for the purpose of exploiting Lumos's proprietary strategic plans for the benefit of NovaSpark.

Failure to Return Company Materials

Upon your separation from Lumos on September 30, 2022, you failed to return all Company materials in your possession, custody, or control, as required by Section 5 of the PIIAA. Specifically, you did not return the files and documents described above, nor did you return any other Lumos materials that may remain in your possession. Furthermore, you did not provide the written certification of deletion of Lumos proprietary information from your personal devices and accounts, as expressly required by the PIIAA.

Based on the information currently available to Lumos, you continue to possess Lumos proprietary materials in your personal cloud storage accounts (including but not limited to the personal Hollowell Health IT account referenced above), your personal email account (r.anand.personal@vaultmail.com), and potentially on personal devices and external storage media. This continued, unauthorized possession of Lumos trade secrets and confidential information constitutes an ongoing violation of your contractual obligations and an ongoing misappropriation of Lumos's intellectual property.

Nature of the Trade Secrets at Issue

The proprietary information taken by you constitutes trade secrets under the California Uniform Trade Secrets Act ("CUTSA"), California Civil Code Sections 3426 through 3426.11. Lumos's trade secrets include, without limitation, the following:

(a) The LumosEdge ensemble machine-learning model architecture, including Lumos's proprietary neural-network topology designs, layer configurations, attention mechanisms, and hyperparameter configurations, all of which were developed through years of intensive research and experimentation;

(b) Lumos's proprietary feature-engineering libraries, containing 2,847 individual engineered features specifically designed and optimized for financial signal generation from alternative data sources — a library that represents one of the Company's most significant competitive advantages;

(c) The DataStream ETL (extract, transform, load) pipeline codebase and associated data-schema definitions, covering automated ingestion, normalization, and enrichment of data from 43 alternative-data vendors, the development of which required substantial engineering investment and the negotiation of complex data-licensing arrangements;

(d) Curated and labeled training datasets comprising approximately 14.6 terabytes of historical financial and alternative data, assembled, cleaned, labeled, and validated over the course of Lumos's operations at significant cost;

(e) Confidential product roadmap documents for 2023 through 2025, including the unreleased LumosEdge 3.0 specifications, strategic plans, competitive analyses, and go-to-market strategies.

Lumos has invested substantial resources — financial, technical, and human — in developing these technologies and materials. The LumosEdge platform and associated intellectual property form the foundation of a business that generates approximately $67 million in annual recurring revenue and has attracted approximately $185 million in venture funding through the Company's Series D financing round. These materials derive independent economic value, both actual and potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from their disclosure or use. Lumos has taken, and continues to take, reasonable measures to maintain the secrecy of this information, including the use of access controls, encryption, confidentiality agreements (including the PIIAA executed by you), employee training, restricted document access, and other security protocols.

Demands

In light of the foregoing, Lumos, through Calderwood & Harkness LLP, hereby demands that you take the following actions immediately and without qualification:

1. Cease and Desist All Use and Disclosure

You must immediately cease and desist from all use, disclosure, distribution, copying, reproduction, exploitation, or dissemination of any and all Lumos proprietary information, trade secrets, and confidential materials. This demand encompasses all such information in your personal possession, custody, or control, as well as any such information that you have provided, transferred, disclosed, or otherwise made available to NovaSpark Technologies Inc., its employees, agents, contractors, investors, or any other third party. This obligation is absolute and continuing.

2. Return of All Company Materials

Within five (5) business days of your receipt of this letter, you must return to Lumos all Company materials in your possession, custody, or control. This includes, without limitation:

(a) All files transferred from Lumos's systems to your personal Hollowell Health IT account on or about September 26, 2022, including all model architecture specifications, hyperparameter configuration files, and any other proprietary materials included in the approximately 3.2 GB transfer;

(b) The LumosEdge 3.0 Product Roadmap forwarded to your personal email address (r.anand.personal@vaultmail.com) on or about September 28, 2022;

(c) Any and all copies — whether in original or derivative form — of Lumos source code, model architectures, training data, feature-engineering libraries, data-schema definitions, product roadmaps, customer information, financial information, business plans, strategic analyses, and any and all other proprietary materials of Lumos, in any format whatsoever (whether digital or physical), including on any hard drives, USB drives, external storage devices, laptops, desktops, mobile phones, tablets, cloud storage accounts, email accounts, or any other medium.

All returned materials should be delivered to Calderwood & Harkness LLP, 555 California Street, 40th Floor, San Francisco, California 94104, Attention: Marcus Delgado.

3. Permanent Deletion and Certification

Concurrent with the return of materials described above, you must permanently and irrevocably delete all Lumos proprietary information from all personal devices, cloud storage accounts (including, without limitation, the personal Hollowell Health IT account and the personal email account at r.anand.personal@vaultmail.com referenced above), external storage media, backup systems, and any NovaSpark systems, servers, repositories, or accounts to which Lumos proprietary information may have been uploaded, transferred, or copied.

Within the same five (5) business day period, you must provide a written certification, executed under penalty of perjury, confirming the complete return and/or permanent deletion of all Lumos materials and proprietary information from all locations and media described above, and certifying that no copies, excerpts, summaries, or derivatives of any Lumos proprietary information remain in your possession, custody, or control, or in the possession, custody, or control of NovaSpark Technologies Inc. or any other third party to whom you have provided such materials.

4. Preservation of Evidence

Notwithstanding the foregoing demand for the deletion of Lumos proprietary materials, you must immediately institute a litigation hold and preserve all electronic devices, storage media, cloud accounts, email accounts (including both personal and professional accounts), and communications that may contain evidence relevant to Lumos's claims against you. Specifically, and without limitation, you must not delete, destroy, alter, overwrite, conceal, or otherwise dispose of any of the following:

(a) Any and all emails, text messages, instant messages (including messages on platforms such as Meridian Solutions, Signal, Meridian Services Inc., Kestrel Data Systems, or any other messaging application), voicemails, and other written or electronic communications relating in any way to your employment at Lumos, your departure from Lumos, the formation and operations of NovaSpark Technologies Inc., or any communications with Serena Mallick, Derek Yun, or any other NovaSpark employee, contractor, advisor, or investor regarding Lumos's technology, trade secrets, confidential information, customers, employees, or business;

(b) Any and all documents, files, spreadsheets, presentations, databases, source code, scripts, notebooks, configuration files, metadata, system logs, access logs, and other electronically stored information, in any format, relating to the matters described above;

(c) Any and all hardware devices, including laptops, desktops, mobile phones, tablets, USB drives, external hard drives, and any other storage media that may contain any of the foregoing.

This preservation obligation extends to all of your personal and professional accounts and devices, without exception. You are hereby on notice that the destruction, alteration, or concealment of evidence relevant to Lumos's claims may constitute spoliation and may result in severe adverse consequences, including adverse-inference instructions and sanctions, in any subsequent litigation.

To be clear: The obligation to preserve evidence is separate from, and does not conflict with, the obligation to return and delete Lumos proprietary materials. You are required to preserve all evidence of your activities, communications, and conduct, while at the same time returning and deleting the proprietary materials themselves. If you have any questions about how to comply with both obligations simultaneously, you should consult with your legal counsel immediately.

5. Compliance with PIIAA Obligations

You must comply fully and immediately with all of your obligations under the PIIAA, including without limitation the confidentiality and non-disclosure provisions, the invention assignment provisions, the non-solicitation provisions, and the obligation to return all Company materials. Any continued failure to comply with these obligations will constitute a continuing breach of contract and will be treated accordingly.

Legal Basis and Consequences of Non-Compliance

The conduct described in this letter gives rise to claims against you including, but not limited to, the following:

(a) Misappropriation of Trade Secrets in violation of the California Uniform Trade Secrets Act, California Civil Code Sections 3426 through 3426.11;

(b) Breach of the Proprietary Information and Inventions Assignment Agreement, including the confidentiality, non-disclosure, invention assignment, non-solicitation, and return-of-materials provisions thereof;

(c) Breach of the Duty of Loyalty owed to Lumos during the period of your employment, including your conduct in planning and preparing to launch a competing venture and exfiltrating proprietary materials while still employed by the Company;

(d) Unfair Business Practices in violation of California Business and Professions Code Section 17200 et seq.;

(e) Conversion of Lumos's proprietary information and trade secrets.

The remedies available to Lumos under these claims are substantial. Under the CUTSA, Lumos is entitled to seek injunctive relief to prevent any actual or threatened misappropriation of its trade secrets, as well as compensatory damages for actual loss caused by the misappropriation and unjust enrichment caused by the misappropriation that is not taken into account in computing damages for actual loss. California Civil Code Section 3426.3. Moreover, if the misappropriation is found to have been willful and malicious — as the evidence strongly suggests in this case — Lumos may be awarded exemplary damages in an amount not exceeding two times the compensatory damages award. California Civil Code Section 3426.3(c). In addition, the CUTSA provides for an award of reasonable attorney's fees to the prevailing party in cases involving willful and malicious misappropriation or bad-faith claims of misappropriation. California Civil Code Section 3426.4.

If you fail to comply with the demands set forth in this letter, Lumos is prepared to pursue all available legal remedies without further notice to you. This includes, without limitation, seeking emergency injunctive relief in the form of a temporary restraining order and preliminary injunction to prevent the continued use, disclosure, or exploitation of Lumos's trade secrets; filing a civil action for damages, including compensatory damages, unjust enrichment, exemplary damages, and attorney's fees; and pursuing all other remedies available at law or in equity, including claims against NovaSpark Technologies Inc. and any other parties who may have participated in or benefited from the misappropriation of Lumos's intellectual property.

Lumos expressly reserves all rights and remedies available to it under applicable law, contract, and equity. Nothing in this letter constitutes a waiver of any right, remedy, or claim. All such rights, remedies, and claims are expressly reserved.

Reservation of Rights

This letter is not intended to be, and shall not be construed as, a complete or exhaustive statement of the facts known to Lumos or of Lumos's legal rights, remedies, or claims. The facts set forth herein are based on the information currently available to Lumos, and Lumos's investigation into the full scope of your misconduct and the misappropriation of its trade secrets is ongoing. Lumos reserves the right to supplement, amend, or modify the factual record and its legal theories as its investigation progresses and as additional evidence is obtained.

Nothing in this letter constitutes a waiver of any of Lumos's rights, remedies, or claims, whether arising under contract, statute, common law, or equity, all of which are expressly reserved. Lumos's decision to send this letter, and any delay in taking further legal action, shall not be construed as acquiescence, waiver, or estoppel with respect to any of Lumos's rights or claims.

Direction to Forward to Counsel

If you have retained legal counsel with respect to the matters described in this letter, Lumos requests that you immediately direct your counsel to contact the undersigned at the address and telephone number listed above. All further communications regarding this matter should be directed through counsel.

Lumos expects your prompt and complete compliance with each of the demands outlined above. The five (5) business day deadline set forth herein is firm, and Lumos will not hesitate to take immediate legal action in the event of non-compliance. All responses should be directed to the undersigned at Calderwood & Harkness LLP, 555 California Street, 40th Floor, San Francisco, California 94104, telephone (415) 693-2145, email mdelgado@calderwoodharkness.com.

Please govern yourself accordingly.

Very truly yours,