1008-00005 · Lumos Analytics Inc · Pre-Litigation

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CALDERWOOD & HARKNESS LLP Attorneys at Law

555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 773-6200 Facsimile: (415) 773-6201

125 Broad Street, 32nd Floor New York, New York 10004 Telephone: (212) 506-5100 Facsimile: (212) 506-5101

www.calderwoodharkness.com

January 9, 2023

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED AND EMAIL

Serena Mallick 578 Guerrero Street, Apt 3B San Francisco, CA 94110

Re: Demand to Cease and Desist — Misappropriation of Lumos Analytics Inc. Proprietary Information and Trade Secrets; Breach of Proprietary Information and Inventions Assignment Agreement

Dear Ms. Mallick:

I. Identification of Counsel and Client

This firm represents Lumos Analytics Inc. ("Lumos" or the "Company"), a corporation duly incorporated under the laws of the State of Delaware, with its principal place of business at 4700 Orchard Parkway, Suite 300, San Jose, California 95134. This letter is written on behalf of the firm and Lumos by the undersigned, Marcus Delgado, a partner at Calderwood & Harkness LLP ("C&H"). This matter has been assigned C&H Matter Number 1008-00005.

Lumos is a leading provider of AI-driven financial analytics delivered on a software-as-a-service ("SaaS") basis. Lumos's flagship product, LumosEdge, is a sophisticated analytics platform that harnesses machine learning and alternative-data ingestion to deliver proprietary financial signals to institutional clients including hedge funds, asset managers, and proprietary trading desks. Lumos currently employs approximately 340 individuals across its engineering, data science, product, sales, and operations teams. In its most recently completed fiscal year, Lumos achieved annual recurring revenue ("ARR") of approximately $67 million. The development of LumosEdge and its underlying data infrastructure represents years of sustained investment, comprising tens of millions of dollars in research and development expenditure, and is the foundation of the Company's competitive position in the marketplace.

The purpose of this letter is to demand that you immediately cease and desist from any and all unauthorized use, possession, retention, disclosure, copying, distribution, or exploitation of Lumos's proprietary information and trade secrets. As detailed below, Lumos has substantial and compelling evidence that you misappropriated Lumos trade secrets prior to and in connection with your departure from the Company, and that you are now in a position to use or disclose those trade secrets in your capacity as an officer of a direct competitor. Lumos takes these matters with the utmost seriousness and intends to protect its rights, its intellectual property, and the significant investments it has made in developing its proprietary technology to the fullest extent permitted by law.

II. Background — Your Employment and Contractual Obligations

You were employed by Lumos as a Senior Software Engineer — Data Pipelines from June 2020 through October 14, 2022, at which time you voluntarily resigned. During the course of your employment, you were a member of the Data Pipelines engineering team, where you were responsible for building, maintaining, and enhancing the proprietary extract, transform, and load ("ETL") pipelines — known internally as the "DataStream" system — that ingest alternative financial data into the LumosEdge platform. The DataStream system interfaces with forty-three (43) alternative-data vendors and is a mission-critical component of Lumos's product offering, as it enables the Company to process, normalize, and deliver alternative-data signals at scale to LumosEdge's analytical engine. Your role afforded you deep and extensive access to the DataStream codebase, its data-schema definitions, its integration architecture, and related proprietary methodologies.

As a condition of your employment with Lumos, you executed the Company's standard Proprietary Information and Inventions Assignment Agreement (the "PIIAA") on or about June 8, 2020. The PIIAA constitutes a binding agreement between you and Lumos and contains, among other provisions, the following material obligations:

(a) Assignment of Inventions. You agreed to assign to Lumos all right, title, and interest in and to any inventions, developments, improvements, works of authorship, software, designs, techniques, algorithms, and other work product conceived, developed, or reduced to practice during the course of your employment with the Company, whether or not patentable or copyrightable, and whether created during or outside of working hours, to the extent such work product relates to Lumos's business, actual or demonstrably anticipated research or development, or was created using Lumos equipment, supplies, facilities, or proprietary information.

(b) Confidentiality and Non-Disclosure. You agreed to hold in strictest confidence and not to use or disclose, without the prior written authorization of Lumos, any Proprietary Information (as defined in the PIIAA) of the Company, either during or after the term of your employment, for a period of three (3) years following the termination of your employment for any reason, or for so long as such information remains a trade secret, whichever is longer. "Proprietary Information" is defined broadly in the PIIAA and encompasses, among other categories, software code, algorithms, data schemas, machine-learning models, training data, feature libraries, vendor relationships, product roadmaps, customer information, financial data, and business strategies.

(c) Non-Solicitation of Employees. You agreed that for a period of twelve (12) months following the termination of your employment with Lumos, you would not, directly or indirectly, solicit, induce, recruit, or encourage any employee or contractor of Lumos to leave the Company or to join any other entity.

(d) Covenant Not to Use or Disclose Trade Secrets. You agreed, without limitation as to time, not to use or disclose any trade secrets of Lumos, as that term is defined under applicable law, at any time during or after your employment.

(e) Return of Company Materials. You agreed that upon the termination of your employment for any reason, you would promptly deliver to Lumos all documents, materials, data, equipment, devices, and other property belonging to the Company or containing Proprietary Information, in whatever form or medium, and that you would not retain any copies, extracts, or derivatives thereof. You further agreed to certify in writing that you had complied with this obligation.

Each of the foregoing provisions constitutes a binding restrictive covenant obligation that survives the termination of your employment with Lumos. The PIIAA is governed by the laws of the State of California and contains provisions for injunctive relief and recovery of attorneys' fees in the event of a breach. Lumos has a fully executed original of the PIIAA in its records, and we are prepared to produce it in any legal proceeding should that become necessary.

III. Lumos's Trade Secrets and Proprietary Information

Lumos's competitive advantage in the financial analytics marketplace is derived from its significant and sustained investment in developing proprietary technology, data assets, and analytical methodologies. The following five categories of Lumos trade secrets and proprietary information are of particular relevance to the matters described in this letter:

(1) LumosEdge Ensemble Machine-Learning Model Architecture. The LumosEdge platform employs a proprietary ensemble machine-learning model architecture that incorporates a novel neural-network topology and carefully tuned hyperparameter configurations. This architecture is the product of years of iterative research and development conducted by Lumos's data science and engineering teams and reflects proprietary design choices and experimental findings that are not publicly known or readily ascertainable.

(2) Proprietary Feature-Engineering Libraries. Lumos has developed proprietary feature-engineering libraries containing two thousand eight hundred forty-seven (2,847) individually engineered features designed for financial signal generation. These features represent a curated body of domain-specific knowledge that transforms raw and alternative data into predictive signals used by the LumosEdge platform. The design, selection, and calibration of these features embody substantial intellectual effort and are closely guarded by the Company.

(3) DataStream ETL Pipeline Codebase and Data-Schema Definitions. The DataStream system comprises a proprietary codebase and associated data-schema definitions governing the ingestion, transformation, normalization, and delivery of alternative data from forty-three (43) separate alternative-data vendors into the LumosEdge platform. The DataStream codebase includes proprietary connector logic, error-handling routines, data-validation rules, vendor-specific parsing algorithms, and schema-mapping definitions that together enable Lumos to ingest and process alternative data at scale with high reliability. The system's architecture and implementation details are confidential and not publicly available.

(4) Curated and Labeled Training Dataset. Lumos has assembled, curated, and labeled a proprietary training dataset of approximately 14.6 terabytes of historical financial and alternative data. This dataset is used to train and validate the machine-learning models that power LumosEdge. The creation of this dataset required years of data collection, cleaning, labeling, and quality assurance, and the dataset itself represents a substantial proprietary asset with significant independent economic value.

(5) Confidential Product Roadmap Documents (2023–2025). Lumos maintains confidential product roadmap documents outlining the Company's strategic product development plans for the period 2023 through 2025, including detailed specifications for the unreleased LumosEdge 3.0 platform. These documents contain forward-looking strategic, technical, and competitive information that is highly sensitive and tightly restricted within the Company.

Given your role on the Data Pipelines team, you had direct, sustained, and intimate access to and knowledge of categories (2), (3), and (4) in particular. You worked extensively within the DataStream codebase, contributed to its development, interacted with the feature-engineering libraries in the course of pipeline development, and had access to portions of the curated training dataset that were processed through the DataStream system. You were also exposed, by virtue of your seniority and role in engineering planning sessions, to certain elements of the product roadmap.

Each of the foregoing categories of information derives independent economic value, both actual and potential, from not being generally known to the public or to other persons who could obtain economic value from its disclosure or use, and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. These measures include, without limitation, access controls and role-based permissions, encryption of data at rest and in transit, employee confidentiality agreements (including the PIIAA), restricted distribution of sensitive documents on a need-to-know basis, physical security measures at Lumos's offices, and periodic security audits. Accordingly, each of these categories qualifies as a "trade secret" within the meaning of the California Uniform Trade Secrets Act ("CUTSA"), California Civil Code Sections 3426 through 3426.11, and may also be entitled to protection under the federal Defend Trade Secrets Act, 18 U.S.C. § 1836 et seq.

IV. Evidence of Misappropriation

Lumos has conducted a thorough internal investigation into the circumstances surrounding your departure from the Company, including a detailed review of IT security logs, endpoint monitoring records, network access records, badge-access logs, and other relevant data sources. That investigation has revealed the following facts, which Lumos believes constitute compelling evidence of trade-secret misappropriation.

On or about October 10, 2022 — four (4) days prior to your resignation from the Company — you connected a personal external USB storage drive to your Lumos-issued workstation. The USB device, bearing the serial number WD-4837291, was not a Company-issued device and had not been authorized for use with Lumos systems. While connected to your workstation, you executed a cloning operation in which you copied the entire DataStream ETL pipeline repository to the personal USB drive. The cloned repository comprises approximately 780 megabytes of proprietary source code, data-schema definitions, configuration files, documentation, and related materials. The repository contains the full commit history and all branches of the DataStream codebase, representing the cumulative product of more than two years of engineering effort by the Data Pipelines team.

This transfer was unauthorized. No legitimate business justification existed for copying the complete DataStream repository — in its entirety — to a personal external storage device. Lumos's information security policies, which were communicated to you during onboarding and thereafter, expressly prohibit the transfer of proprietary source code and data to personal or unauthorized devices. The timing of this transfer, occurring just days before your resignation, further underscores the impropriety of your actions.

Upon your resignation on October 14, 2022, you did not return Company materials as required by Section 5(e) of the PIIAA. You did not return the USB drive bearing serial number WD-4837291 or any of its contents. You did not certify, in writing or otherwise, that you had returned or destroyed all Lumos proprietary information in your possession, custody, or control. You did not confirm the deletion of Lumos proprietary information from your personal devices, personal cloud storage accounts, personal email accounts, or any other personal repositories. In short, you failed to comply with the material return-of-materials obligation that you undertook upon execution of the PIIAA.

Three (3) days after your resignation from Lumos, on October 17, 2022, you commenced employment at NovaSpark Technologies Inc. ("NovaSpark"), a Delaware-incorporated startup headquartered at 88 Bluxome Street, Floor 4, San Francisco, California 94107. You assumed the title of Vice President of Engineering at NovaSpark. NovaSpark was incorporated in the State of Delaware on October 3, 2022 — just eleven days before your resignation from Lumos — by Rajiv Anand, a former Lumos Principal Engineer who himself resigned from Lumos on September 30, 2022. NovaSpark purports to offer AI-driven alternative-data analytics for hedge funds and proprietary trading desks. This is a market that directly and substantially overlaps with Lumos's core LumosEdge product offering, and it is precisely the type of competitive enterprise that would benefit from the misappropriation and use of Lumos's proprietary DataStream technology, feature-engineering libraries, and training data assets.

In November 2022, NovaSpark reportedly closed a seed funding round of $12 million from Blackpine Capital Partners LP, suggesting that NovaSpark has moved aggressively to build a competing product — a timeline that, given the complexity of the systems involved, is difficult to explain absent reliance on pre-existing proprietary technology and assets such as those you took from Lumos.

The totality of the evidence — copying the entire DataStream repository to a personal USB drive shortly before your resignation, failing to return Company materials or certify the destruction of proprietary information, and immediately joining a direct competitor founded by a former Lumos colleague who resigned only two weeks before you — gives rise to a compelling inference of trade-secret misappropriation. These actions constitute a clear violation of your obligations under the PIIAA and under applicable law.

V. Legal Claims and Bases

Based on the foregoing facts and circumstances, Lumos has determined that your actions give rise to claims against you including, but not limited to, the following:

(a) Misappropriation of Trade Secrets under the California Uniform Trade Secrets Act. Your unauthorized acquisition, retention, and potential use or disclosure of the DataStream repository and other Lumos trade secrets constitutes misappropriation within the meaning of California Civil Code Sections 3426 through 3426.11. CUTSA provides for injunctive relief to prevent actual or threatened misappropriation, damages for the actual loss caused by the misappropriation as well as unjust enrichment not captured by actual loss, and — in cases of willful and malicious misappropriation — exemplary damages in an amount not exceeding twice the amount of any award of actual damages, together with reasonable attorneys' fees. See Cal. Civ. Code §§ 3426.2, 3426.3, 3426.4.

(b) Breach of Contract (PIIAA). Your actions constitute a material breach of the PIIAA, including but not limited to breaches of the confidentiality and non-disclosure provisions, the covenant not to use or disclose trade secrets, and the obligation to return all Company materials upon termination of employment. Lumos is entitled to recover all damages arising from such breach, including compensatory damages, consequential damages, and specific performance or injunctive relief as warranted.

(c) Breach of the Duty of Loyalty. During the period of your employment with Lumos, you owed the Company a fiduciary duty of loyalty. By copying the DataStream repository to a personal device in anticipation of joining a direct competitor, you breached that duty. California law recognizes that an employee who, while still employed, takes active steps to appropriate the employer's trade secrets or proprietary information for the benefit of a competitor breaches the duty of loyalty owed to the employer.

(d) Unfair Business Practices. Your conduct, and the conduct of NovaSpark to the extent it has benefited from or facilitated your misappropriation, constitutes an unlawful, unfair, and/or fraudulent business practice within the meaning of California Business and Professions Code Section 17200 et seq. Lumos is entitled to injunctive relief and restitution under this statute.

(e) Conversion. Your unauthorized taking, retention, and use of Lumos's proprietary information and trade-secret materials — including the physical copy of the DataStream repository on USB drive serial number WD-4837291 — constitutes conversion of Lumos's property. Lumos is entitled to recover the value of the property converted and any additional damages resulting from the conversion.

The foregoing is not intended to be an exhaustive list of all claims or causes of action available to Lumos. Lumos expressly reserves the right to assert additional claims, including but not limited to claims under the federal Defend Trade Secrets Act, 18 U.S.C. § 1836 et seq., claims for tortious interference with business relationships, claims for civil conspiracy, and any other claims that the facts and the law may support.

VI. Demands

In light of the foregoing, Lumos hereby demands that you immediately and without exception take each of the following actions:

1. Cease and Desist. You must immediately cease and desist from any and all use, disclosure, copying, distribution, transmission, publication, reverse engineering, or exploitation of Lumos's proprietary information and trade secrets, in whole or in part, in any form or medium. This demand encompasses, but is not limited to, any and all materials derived from, relating to, or incorporating the DataStream ETL pipeline codebase and data-schema definitions, the proprietary feature-engineering libraries, the LumosEdge ensemble machine-learning model architecture and hyperparameter configurations, the curated and labeled training dataset, and the confidential product roadmap documents for 2023–2025 including unreleased LumosEdge 3.0 specifications. You must not use, reference, or draw upon any Lumos proprietary information in any work you perform for NovaSpark Technologies Inc. or any other entity.

2. Return All Lumos Materials. You must promptly return to Lumos all Company materials in your possession, custody, or control, in any form whatsoever, whether electronic or physical. This includes, without limitation, the contents of the external USB drive bearing serial number WD-4837291 and the drive itself, any copies, backups, derivatives, or extracts of the DataStream repository or any other Lumos proprietary materials, and any other Lumos documents, files, code, data, notes, specifications, diagrams, or communications, whether stored on personal devices (including laptops, desktops, mobile phones, and tablets), external storage media (including USB drives, external hard drives, SD cards, and CDs), cloud storage accounts (including but not limited to Hollowell Health IT, Larkspur Technologies, Meridian Systems, Cobalt Ridge Systems, Meridian Technologies S3, Aldermere Data Systems, Aldermere Software, and Strathmore Solutions), personal email accounts, messaging platforms (including Meridian Solutions, Signal, Meridian Services Inc., Kestrel Data Systems, and similar services), or any other repository of any kind. All materials must be returned to Lumos in their original and unaltered form, and no copies or derivatives may be retained.

3. Preserve All Evidence. You must immediately take all steps necessary to preserve and refrain from deleting, destroying, altering, overwriting, concealing, encrypting, or otherwise making unavailable any documents, electronic files, communications (including emails, text messages, chat logs, and voicemails), devices, storage media, or other materials that relate in any way to: (i) Lumos's proprietary information or trade secrets; (ii) your departure from Lumos; (iii) your employment at NovaSpark Technologies Inc.; (iv) any communications with Rajiv Anand, Derek Yun, or any other current or former Lumos employee or contractor concerning Lumos technology, Lumos proprietary information, NovaSpark, or any actual or contemplated competing product or business venture; or (v) any other matter described in this letter. This preservation obligation is ongoing and must be maintained until this matter is fully and finally resolved.

4. Provide Written Confirmation of Compliance. Within five (5) business days of your receipt of this letter, you must provide written confirmation to the undersigned that you have fully complied with each of the foregoing demands. Such written confirmation must include: (a) a detailed accounting and inventory of all Lumos materials that were or are in your possession, custody, or control, in any form; (b) a description of the steps you have taken and are taking to return such materials to Lumos; (c) confirmation that you have not disclosed, transmitted, or provided Lumos proprietary information to NovaSpark Technologies Inc., Rajiv Anand, or any other person or entity; and (d) confirmation that you have ceased all use of Lumos proprietary information in connection with your work at NovaSpark or elsewhere.

5. Cease Any Use of Lumos Trade Secrets at NovaSpark or Any Other Entity. You must immediately cease any and all use of Lumos trade secrets and proprietary information in connection with your employment, consulting, advisory, or any other engagement with NovaSpark Technologies Inc. or any other entity, whether as an employee, officer, director, consultant, advisor, contractor, or in any other capacity. This demand extends to any work product, designs, code, algorithms, data schemas, architectures, or other output that was created, conceived, or developed using, incorporating, or drawing upon Lumos proprietary information in any respect.

VII. Reservation of Rights and Warning of Litigation

This letter is without waiver of, and with full reservation of, any and all rights, remedies, claims, and defenses available to Lumos at law or in equity, whether arising under statute, common law, contract, or otherwise. Nothing in this letter shall be construed as a waiver, release, or limitation of any right or claim of Lumos, nor as an admission or concession of any kind.

Lumos is fully prepared to pursue all available legal remedies if you fail to comply promptly and completely with the demands set forth herein. Such remedies include, without limitation, the immediate filing of a lawsuit and the pursuit of emergency injunctive relief, including a temporary restraining order and preliminary injunction, in the Superior Court of the State of California or such other court of competent jurisdiction as Lumos may elect, to prevent the continued misappropriation, use, or disclosure of Lumos's trade secrets and proprietary information. Lumos will not hesitate to invoke the full power of the courts to protect its rights and its intellectual property.

The failure to raise any particular claim, cause of action, or theory of liability in this letter, or the failure to identify any particular document, act, communication, or instance of misappropriation, shall not be deemed a waiver of Lumos's right to assert such claim or raise such matter in any future proceeding, whether judicial, arbitral, or otherwise. Lumos's investigation into these matters is ongoing, and Lumos reserves the right to supplement its claims and allegations as additional facts come to light.

Lumos expressly reserves the right to seek all available damages in any proceeding, including but not limited to actual damages, consequential damages, unjust enrichment, exemplary damages under California Civil Code Section 3426.3, restitution, disgorgement, and reasonable attorneys' fees and costs. Given the evidence of willful and deliberate misappropriation, Lumos will pursue enhanced damages and fee-shifting to the fullest extent permitted by law.

You should also be aware that Lumos is simultaneously sending similar demand letters to Rajiv Anand, Derek Yun, and NovaSpark Technologies Inc. regarding their respective roles in the misappropriation and misuse of Lumos's proprietary information and trade secrets. Lumos will take all necessary steps to hold accountable each individual and entity that has participated in or benefited from the wrongful acquisition, use, or disclosure of Lumos's confidential and proprietary assets.

VIII. Instruction to Preserve Evidence and Retain Counsel

In addition to the preservation demands set forth above, you are hereby placed on formal notice of your obligation to preserve all potentially relevant documents, data, communications, and evidence relating to the matters described in this letter. This obligation is independent of, and in addition to, any obligations you may have under applicable law, court rules, or professional standards.

Your preservation obligation extends to, without limitation, all of the following: personal and work-issued laptops, desktop computers, mobile phones, and tablets; external storage media, including without limitation USB drive serial number WD-4837291 and any other USB drives, external hard drives, SD cards, or other removable media; cloud storage accounts, including Hollowell Health IT, Larkspur Technologies, Meridian Systems, Cobalt Ridge Systems, Meridian Technologies S3, Aldermere Data Systems, Aldermere Software, Strathmore Solutions, and any similar services; personal and work email accounts, including Northgate Software, Cascade Health IT, Outlook, and any other providers; messaging platforms, including Meridian Solutions, Northgate Data Systems, Signal, Meridian Services Inc., Kestrel Data Systems, Westmark Software, and any similar applications; backup systems and backup media; browser history, download logs, and cached files; and any other repositories or locations containing Lumos proprietary information or communications related to the matters described herein. You must take immediate steps to disable any automated deletion processes, auto-purge settings, or retention policies that might result in the destruction of relevant evidence.

Any destruction, alteration, concealment, or spoliation of evidence — whether intentional or through negligence — may give rise to additional claims against you, including claims for spoliation of evidence, and may result in the imposition of adverse evidentiary inferences, sanctions, and other penalties in any subsequent judicial proceeding. Courts take evidence destruction extremely seriously, and you should conduct yourself accordingly.

Lumos strongly encourages you to retain legal counsel to advise you in connection with this matter and to respond to this letter on your behalf. Any response or communication regarding this matter should be directed to the undersigned at the address provided below.

IX. Request for Response

Lumos requests a written response to this letter within five (5) business days of your receipt hereof. Your response should address each of the demands set forth in Section VI above and should be sent to:

Marcus Delgado, Esq. Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 773-6200

Email: mdelgado@calderwoodharkness.com

If we do not receive a satisfactory response within the stated time period, Lumos will proceed to exercise all available legal remedies without further notice.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Marcus Delgado Partner Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, California 94104 Direct: (415) 773-6247 Facsimile: (415) 773-6201

Email: mdelgado@calderwoodharkness.com

cc: Thomas Brightwell, General Counsel, Lumos Analytics Inc.

cc: Priya Chandrasekaran, Chief Executive Officer, Lumos Analytics Inc.

cc: Wendy Schultz, Calderwood & Harkness LLP

cc: Omar Siddiqui, Calderwood & Harkness LLP

This letter and its contents are confidential and may be protected by the attorney-client privilege and/or the work product doctrine. This letter is intended solely for the addressee. Any unauthorized review, use, disclosure, or distribution is prohibited. If you have received this letter in error, please notify the sender immediately and destroy all copies.

CALDERWOOD & HARKNESS LLP Attorneys at Law
555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 773-6200 Facsimile: (415) 773-6201
125 Broad Street, 32nd Floor New York, New York 10004 Telephone: (212) 506-5100 Facsimile: (212) 506-5101
www.calderwoodharkness.com
January 9, 2023
VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED AND EMAIL
Serena Mallick 578 Guerrero Street, Apt 3B San Francisco, CA 94110
Re: Demand to Cease and Desist — Misappropriation of Lumos Analytics Inc. Proprietary Information and Trade Secrets; Breach of Proprietary Information and Inventions Assignment Agreement
Dear Ms. Mallick:
I. Identification of Counsel and Client
This firm represents Lumos Analytics Inc. ("Lumos" or the "Company"), a corporation duly incorporated under the laws of the State of Delaware, with its principal place of business at 4700 Orchard Parkway, Suite 300, San Jose, California 95134. This letter is written on behalf of the firm and Lumos by the undersigned, Marcus Delgado, a partner at Calderwood & Harkness LLP ("C&H"). This matter has been assigned C&H Matter Number 1008-00005.
Lumos is a leading provider of AI-driven financial analytics delivered on a software-as-a-service ("SaaS") basis. Lumos's flagship product, LumosEdge, is a sophisticated analytics platform that harnesses machine learning and alternative-data ingestion to deliver proprietary financial signals to institutional clients including hedge funds, asset managers, and proprietary trading desks. Lumos currently employs approximately 340 individuals across its engineering, data science, product, sales, and operations teams. In its most recently completed fiscal year, Lumos achieved annual recurring revenue ("ARR") of approximately $67 million. The development of LumosEdge and its underlying data infrastructure represents years of sustained investment, comprising tens of millions of dollars in research and development expenditure, and is the foundation of the Company's competitive position in the marketplace.
The purpose of this letter is to demand that you immediately cease and desist from any and all unauthorized use, possession, retention, disclosure, copying, distribution, or exploitation of Lumos's proprietary information and trade secrets. As detailed below, Lumos has substantial and compelling evidence that you misappropriated Lumos trade secrets prior to and in connection with your departure from the Company, and that you are now in a position to use or disclose those trade secrets in your capacity as an officer of a direct competitor. Lumos takes these matters with the utmost seriousness and intends to protect its rights, its intellectual property, and the significant investments it has made in developing its proprietary technology to the fullest extent permitted by law.
II. Background — Your Employment and Contractual Obligations
You were employed by Lumos as a Senior Software Engineer — Data Pipelines from June 2020 through October 14, 2022, at which time you voluntarily resigned. During the course of your employment, you were a member of the Data Pipelines engineering team, where you were responsible for building, maintaining, and enhancing the proprietary extract, transform, and load ("ETL") pipelines — known internally as the "DataStream" system — that ingest alternative financial data into the LumosEdge platform. The DataStream system interfaces with forty-three (43) alternative-data vendors and is a mission-critical component of Lumos's product offering, as it enables the Company to process, normalize, and deliver alternative-data signals at scale to LumosEdge's analytical engine. Your role afforded you deep and extensive access to the DataStream codebase, its data-schema definitions, its integration architecture, and related proprietary methodologies.
As a condition of your employment with Lumos, you executed the Company's standard Proprietary Information and Inventions Assignment Agreement (the "PIIAA") on or about June 8, 2020. The PIIAA constitutes a binding agreement between you and Lumos and contains, among other provisions, the following material obligations:
(a) Assignment of Inventions. You agreed to assign to Lumos all right, title, and interest in and to any inventions, developments, improvements, works of authorship, software, designs, techniques, algorithms, and other work product conceived, developed, or reduced to practice during the course of your employment with the Company, whether or not patentable or copyrightable, and whether created during or outside of working hours, to the extent such work product relates to Lumos's business, actual or demonstrably anticipated research or development, or was created using Lumos equipment, supplies, facilities, or proprietary information.
(b) Confidentiality and Non-Disclosure. You agreed to hold in strictest confidence and not to use or disclose, without the prior written authorization of Lumos, any Proprietary Information (as defined in the PIIAA) of the Company, either during or after the term of your employment, for a period of three (3) years following the termination of your employment for any reason, or for so long as such information remains a trade secret, whichever is longer. "Proprietary Information" is defined broadly in the PIIAA and encompasses, among other categories, software code, algorithms, data schemas, machine-learning models, training data, feature libraries, vendor relationships, product roadmaps, customer information, financial data, and business strategies.
(c) Non-Solicitation of Employees. You agreed that for a period of twelve (12) months following the termination of your employment with Lumos, you would not, directly or indirectly, solicit, induce, recruit, or encourage any employee or contractor of Lumos to leave the Company or to join any other entity.
(d) Covenant Not to Use or Disclose Trade Secrets. You agreed, without limitation as to time, not to use or disclose any trade secrets of Lumos, as that term is defined under applicable law, at any time during or after your employment.
(e) Return of Company Materials. You agreed that upon the termination of your employment for any reason, you would promptly deliver to Lumos all documents, materials, data, equipment, devices, and other property belonging to the Company or containing Proprietary Information, in whatever form or medium, and that you would not retain any copies, extracts, or derivatives thereof. You further agreed to certify in writing that you had complied with this obligation.
Each of the foregoing provisions constitutes a binding restrictive covenant obligation that survives the termination of your employment with Lumos. The PIIAA is governed by the laws of the State of California and contains provisions for injunctive relief and recovery of attorneys' fees in the event of a breach. Lumos has a fully executed original of the PIIAA in its records, and we are prepared to produce it in any legal proceeding should that become necessary.
III. Lumos's Trade Secrets and Proprietary Information
Lumos's competitive advantage in the financial analytics marketplace is derived from its significant and sustained investment in developing proprietary technology, data assets, and analytical methodologies. The following five categories of Lumos trade secrets and proprietary information are of particular relevance to the matters described in this letter:
(1) LumosEdge Ensemble Machine-Learning Model Architecture. The LumosEdge platform employs a proprietary ensemble machine-learning model architecture that incorporates a novel neural-network topology and carefully tuned hyperparameter configurations. This architecture is the product of years of iterative research and development conducted by Lumos's data science and engineering teams and reflects proprietary design choices and experimental findings that are not publicly known or readily ascertainable.
(2) Proprietary Feature-Engineering Libraries. Lumos has developed proprietary feature-engineering libraries containing two thousand eight hundred forty-seven (2,847) individually engineered features designed for financial signal generation. These features represent a curated body of domain-specific knowledge that transforms raw and alternative data into predictive signals used by the LumosEdge platform. The design, selection, and calibration of these features embody substantial intellectual effort and are closely guarded by the Company.
(3) DataStream ETL Pipeline Codebase and Data-Schema Definitions. The DataStream system comprises a proprietary codebase and associated data-schema definitions governing the ingestion, transformation, normalization, and delivery of alternative data from forty-three (43) separate alternative-data vendors into the LumosEdge platform. The DataStream codebase includes proprietary connector logic, error-handling routines, data-validation rules, vendor-specific parsing algorithms, and schema-mapping definitions that together enable Lumos to ingest and process alternative data at scale with high reliability. The system's architecture and implementation details are confidential and not publicly available.
(4) Curated and Labeled Training Dataset. Lumos has assembled, curated, and labeled a proprietary training dataset of approximately 14.6 terabytes of historical financial and alternative data. This dataset is used to train and validate the machine-learning models that power LumosEdge. The creation of this dataset required years of data collection, cleaning, labeling, and quality assurance, and the dataset itself represents a substantial proprietary asset with significant independent economic value.
(5) Confidential Product Roadmap Documents (2023–2025). Lumos maintains confidential product roadmap documents outlining the Company's strategic product development plans for the period 2023 through 2025, including detailed specifications for the unreleased LumosEdge 3.0 platform. These documents contain forward-looking strategic, technical, and competitive information that is highly sensitive and tightly restricted within the Company.
Given your role on the Data Pipelines team, you had direct, sustained, and intimate access to and knowledge of categories (2), (3), and (4) in particular. You worked extensively within the DataStream codebase, contributed to its development, interacted with the feature-engineering libraries in the course of pipeline development, and had access to portions of the curated training dataset that were processed through the DataStream system. You were also exposed, by virtue of your seniority and role in engineering planning sessions, to certain elements of the product roadmap.
Each of the foregoing categories of information derives independent economic value, both actual and potential, from not being generally known to the public or to other persons who could obtain economic value from its disclosure or use, and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. These measures include, without limitation, access controls and role-based permissions, encryption of data at rest and in transit, employee confidentiality agreements (including the PIIAA), restricted distribution of sensitive documents on a need-to-know basis, physical security measures at Lumos's offices, and periodic security audits. Accordingly, each of these categories qualifies as a "trade secret" within the meaning of the California Uniform Trade Secrets Act ("CUTSA"), California Civil Code Sections 3426 through 3426.11, and may also be entitled to protection under the federal Defend Trade Secrets Act, 18 U.S.C. § 1836 et seq.
IV. Evidence of Misappropriation
Lumos has conducted a thorough internal investigation into the circumstances surrounding your departure from the Company, including a detailed review of IT security logs, endpoint monitoring records, network access records, badge-access logs, and other relevant data sources. That investigation has revealed the following facts, which Lumos believes constitute compelling evidence of trade-secret misappropriation.
On or about October 10, 2022 — four (4) days prior to your resignation from the Company — you connected a personal external USB storage drive to your Lumos-issued workstation. The USB device, bearing the serial number WD-4837291, was not a Company-issued device and had not been authorized for use with Lumos systems. While connected to your workstation, you executed a cloning operation in which you copied the entire DataStream ETL pipeline repository to the personal USB drive. The cloned repository comprises approximately 780 megabytes of proprietary source code, data-schema definitions, configuration files, documentation, and related materials. The repository contains the full commit history and all branches of the DataStream codebase, representing the cumulative product of more than two years of engineering effort by the Data Pipelines team.
This transfer was unauthorized. No legitimate business justification existed for copying the complete DataStream repository — in its entirety — to a personal external storage device. Lumos's information security policies, which were communicated to you during onboarding and thereafter, expressly prohibit the transfer of proprietary source code and data to personal or unauthorized devices. The timing of this transfer, occurring just days before your resignation, further underscores the impropriety of your actions.
Upon your resignation on October 14, 2022, you did not return Company materials as required by Section 5(e) of the PIIAA. You did not return the USB drive bearing serial number WD-4837291 or any of its contents. You did not certify, in writing or otherwise, that you had returned or destroyed all Lumos proprietary information in your possession, custody, or control. You did not confirm the deletion of Lumos proprietary information from your personal devices, personal cloud storage accounts, personal email accounts, or any other personal repositories. In short, you failed to comply with the material return-of-materials obligation that you undertook upon execution of the PIIAA.
Three (3) days after your resignation from Lumos, on October 17, 2022, you commenced employment at NovaSpark Technologies Inc. ("NovaSpark"), a Delaware-incorporated startup headquartered at 88 Bluxome Street, Floor 4, San Francisco, California 94107. You assumed the title of Vice President of Engineering at NovaSpark. NovaSpark was incorporated in the State of Delaware on October 3, 2022 — just eleven days before your resignation from Lumos — by Rajiv Anand, a former Lumos Principal Engineer who himself resigned from Lumos on September 30, 2022. NovaSpark purports to offer AI-driven alternative-data analytics for hedge funds and proprietary trading desks. This is a market that directly and substantially overlaps with Lumos's core LumosEdge product offering, and it is precisely the type of competitive enterprise that would benefit from the misappropriation and use of Lumos's proprietary DataStream technology, feature-engineering libraries, and training data assets.
In November 2022, NovaSpark reportedly closed a seed funding round of $12 million from Blackpine Capital Partners LP, suggesting that NovaSpark has moved aggressively to build a competing product — a timeline that, given the complexity of the systems involved, is difficult to explain absent reliance on pre-existing proprietary technology and assets such as those you took from Lumos.
The totality of the evidence — copying the entire DataStream repository to a personal USB drive shortly before your resignation, failing to return Company materials or certify the destruction of proprietary information, and immediately joining a direct competitor founded by a former Lumos colleague who resigned only two weeks before you — gives rise to a compelling inference of trade-secret misappropriation. These actions constitute a clear violation of your obligations under the PIIAA and under applicable law.
V. Legal Claims and Bases
Based on the foregoing facts and circumstances, Lumos has determined that your actions give rise to claims against you including, but not limited to, the following:
(a) Misappropriation of Trade Secrets under the California Uniform Trade Secrets Act. Your unauthorized acquisition, retention, and potential use or disclosure of the DataStream repository and other Lumos trade secrets constitutes misappropriation within the meaning of California Civil Code Sections 3426 through 3426.11. CUTSA provides for injunctive relief to prevent actual or threatened misappropriation, damages for the actual loss caused by the misappropriation as well as unjust enrichment not captured by actual loss, and — in cases of willful and malicious misappropriation — exemplary damages in an amount not exceeding twice the amount of any award of actual damages, together with reasonable attorneys' fees. See Cal. Civ. Code §§ 3426.2, 3426.3, 3426.4.
(b) Breach of Contract (PIIAA). Your actions constitute a material breach of the PIIAA, including but not limited to breaches of the confidentiality and non-disclosure provisions, the covenant not to use or disclose trade secrets, and the obligation to return all Company materials upon termination of employment. Lumos is entitled to recover all damages arising from such breach, including compensatory damages, consequential damages, and specific performance or injunctive relief as warranted.
(c) Breach of the Duty of Loyalty. During the period of your employment with Lumos, you owed the Company a fiduciary duty of loyalty. By copying the DataStream repository to a personal device in anticipation of joining a direct competitor, you breached that duty. California law recognizes that an employee who, while still employed, takes active steps to appropriate the employer's trade secrets or proprietary information for the benefit of a competitor breaches the duty of loyalty owed to the employer.
(d) Unfair Business Practices. Your conduct, and the conduct of NovaSpark to the extent it has benefited from or facilitated your misappropriation, constitutes an unlawful, unfair, and/or fraudulent business practice within the meaning of California Business and Professions Code Section 17200 et seq. Lumos is entitled to injunctive relief and restitution under this statute.
(e) Conversion. Your unauthorized taking, retention, and use of Lumos's proprietary information and trade-secret materials — including the physical copy of the DataStream repository on USB drive serial number WD-4837291 — constitutes conversion of Lumos's property. Lumos is entitled to recover the value of the property converted and any additional damages resulting from the conversion.
The foregoing is not intended to be an exhaustive list of all claims or causes of action available to Lumos. Lumos expressly reserves the right to assert additional claims, including but not limited to claims under the federal Defend Trade Secrets Act, 18 U.S.C. § 1836 et seq., claims for tortious interference with business relationships, claims for civil conspiracy, and any other claims that the facts and the law may support.
VI. Demands
In light of the foregoing, Lumos hereby demands that you immediately and without exception take each of the following actions:
1. Cease and Desist. You must immediately cease and desist from any and all use, disclosure, copying, distribution, transmission, publication, reverse engineering, or exploitation of Lumos's proprietary information and trade secrets, in whole or in part, in any form or medium. This demand encompasses, but is not limited to, any and all materials derived from, relating to, or incorporating the DataStream ETL pipeline codebase and data-schema definitions, the proprietary feature-engineering libraries, the LumosEdge ensemble machine-learning model architecture and hyperparameter configurations, the curated and labeled training dataset, and the confidential product roadmap documents for 2023–2025 including unreleased LumosEdge 3.0 specifications. You must not use, reference, or draw upon any Lumos proprietary information in any work you perform for NovaSpark Technologies Inc. or any other entity.
2. Return All Lumos Materials. You must promptly return to Lumos all Company materials in your possession, custody, or control, in any form whatsoever, whether electronic or physical. This includes, without limitation, the contents of the external USB drive bearing serial number WD-4837291 and the drive itself, any copies, backups, derivatives, or extracts of the DataStream repository or any other Lumos proprietary materials, and any other Lumos documents, files, code, data, notes, specifications, diagrams, or communications, whether stored on personal devices (including laptops, desktops, mobile phones, and tablets), external storage media (including USB drives, external hard drives, SD cards, and CDs), cloud storage accounts (including but not limited to Hollowell Health IT, Larkspur Technologies, Meridian Systems, Cobalt Ridge Systems, Meridian Technologies S3, Aldermere Data Systems, Aldermere Software, and Strathmore Solutions), personal email accounts, messaging platforms (including Meridian Solutions, Signal, Meridian Services Inc., Kestrel Data Systems, and similar services), or any other repository of any kind. All materials must be returned to Lumos in their original and unaltered form, and no copies or derivatives may be retained.
3. Preserve All Evidence. You must immediately take all steps necessary to preserve and refrain from deleting, destroying, altering, overwriting, concealing, encrypting, or otherwise making unavailable any documents, electronic files, communications (including emails, text messages, chat logs, and voicemails), devices, storage media, or other materials that relate in any way to: (i) Lumos's proprietary information or trade secrets; (ii) your departure from Lumos; (iii) your employment at NovaSpark Technologies Inc.; (iv) any communications with Rajiv Anand, Derek Yun, or any other current or former Lumos employee or contractor concerning Lumos technology, Lumos proprietary information, NovaSpark, or any actual or contemplated competing product or business venture; or (v) any other matter described in this letter. This preservation obligation is ongoing and must be maintained until this matter is fully and finally resolved.
4. Provide Written Confirmation of Compliance. Within five (5) business days of your receipt of this letter, you must provide written confirmation to the undersigned that you have fully complied with each of the foregoing demands. Such written confirmation must include: (a) a detailed accounting and inventory of all Lumos materials that were or are in your possession, custody, or control, in any form; (b) a description of the steps you have taken and are taking to return such materials to Lumos; (c) confirmation that you have not disclosed, transmitted, or provided Lumos proprietary information to NovaSpark Technologies Inc., Rajiv Anand, or any other person or entity; and (d) confirmation that you have ceased all use of Lumos proprietary information in connection with your work at NovaSpark or elsewhere.
5. Cease Any Use of Lumos Trade Secrets at NovaSpark or Any Other Entity. You must immediately cease any and all use of Lumos trade secrets and proprietary information in connection with your employment, consulting, advisory, or any other engagement with NovaSpark Technologies Inc. or any other entity, whether as an employee, officer, director, consultant, advisor, contractor, or in any other capacity. This demand extends to any work product, designs, code, algorithms, data schemas, architectures, or other output that was created, conceived, or developed using, incorporating, or drawing upon Lumos proprietary information in any respect.
VII. Reservation of Rights and Warning of Litigation
This letter is without waiver of, and with full reservation of, any and all rights, remedies, claims, and defenses available to Lumos at law or in equity, whether arising under statute, common law, contract, or otherwise. Nothing in this letter shall be construed as a waiver, release, or limitation of any right or claim of Lumos, nor as an admission or concession of any kind.
Lumos is fully prepared to pursue all available legal remedies if you fail to comply promptly and completely with the demands set forth herein. Such remedies include, without limitation, the immediate filing of a lawsuit and the pursuit of emergency injunctive relief, including a temporary restraining order and preliminary injunction, in the Superior Court of the State of California or such other court of competent jurisdiction as Lumos may elect, to prevent the continued misappropriation, use, or disclosure of Lumos's trade secrets and proprietary information. Lumos will not hesitate to invoke the full power of the courts to protect its rights and its intellectual property.
The failure to raise any particular claim, cause of action, or theory of liability in this letter, or the failure to identify any particular document, act, communication, or instance of misappropriation, shall not be deemed a waiver of Lumos's right to assert such claim or raise such matter in any future proceeding, whether judicial, arbitral, or otherwise. Lumos's investigation into these matters is ongoing, and Lumos reserves the right to supplement its claims and allegations as additional facts come to light.
Lumos expressly reserves the right to seek all available damages in any proceeding, including but not limited to actual damages, consequential damages, unjust enrichment, exemplary damages under California Civil Code Section 3426.3, restitution, disgorgement, and reasonable attorneys' fees and costs. Given the evidence of willful and deliberate misappropriation, Lumos will pursue enhanced damages and fee-shifting to the fullest extent permitted by law.
You should also be aware that Lumos is simultaneously sending similar demand letters to Rajiv Anand, Derek Yun, and NovaSpark Technologies Inc. regarding their respective roles in the misappropriation and misuse of Lumos's proprietary information and trade secrets. Lumos will take all necessary steps to hold accountable each individual and entity that has participated in or benefited from the wrongful acquisition, use, or disclosure of Lumos's confidential and proprietary assets.
VIII. Instruction to Preserve Evidence and Retain Counsel
In addition to the preservation demands set forth above, you are hereby placed on formal notice of your obligation to preserve all potentially relevant documents, data, communications, and evidence relating to the matters described in this letter. This obligation is independent of, and in addition to, any obligations you may have under applicable law, court rules, or professional standards.
Your preservation obligation extends to, without limitation, all of the following: personal and work-issued laptops, desktop computers, mobile phones, and tablets; external storage media, including without limitation USB drive serial number WD-4837291 and any other USB drives, external hard drives, SD cards, or other removable media; cloud storage accounts, including Hollowell Health IT, Larkspur Technologies, Meridian Systems, Cobalt Ridge Systems, Meridian Technologies S3, Aldermere Data Systems, Aldermere Software, Strathmore Solutions, and any similar services; personal and work email accounts, including Northgate Software, Cascade Health IT, Outlook, and any other providers; messaging platforms, including Meridian Solutions, Northgate Data Systems, Signal, Meridian Services Inc., Kestrel Data Systems, Westmark Software, and any similar applications; backup systems and backup media; browser history, download logs, and cached files; and any other repositories or locations containing Lumos proprietary information or communications related to the matters described herein. You must take immediate steps to disable any automated deletion processes, auto-purge settings, or retention policies that might result in the destruction of relevant evidence.
Any destruction, alteration, concealment, or spoliation of evidence — whether intentional or through negligence — may give rise to additional claims against you, including claims for spoliation of evidence, and may result in the imposition of adverse evidentiary inferences, sanctions, and other penalties in any subsequent judicial proceeding. Courts take evidence destruction extremely seriously, and you should conduct yourself accordingly.
Lumos strongly encourages you to retain legal counsel to advise you in connection with this matter and to respond to this letter on your behalf. Any response or communication regarding this matter should be directed to the undersigned at the address provided below.
IX. Request for Response
Lumos requests a written response to this letter within five (5) business days of your receipt hereof. Your response should address each of the demands set forth in Section VI above and should be sent to:
Marcus Delgado, Esq. Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 773-6200
Email: mdelgado@calderwoodharkness.com
If we do not receive a satisfactory response within the stated time period, Lumos will proceed to exercise all available legal remedies without further notice.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Marcus Delgado Partner Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, California 94104 Direct: (415) 773-6247 Facsimile: (415) 773-6201
Email: mdelgado@calderwoodharkness.com
cc: Thomas Brightwell, General Counsel, Lumos Analytics Inc.
cc: Priya Chandrasekaran, Chief Executive Officer, Lumos Analytics Inc.
cc: Wendy Schultz, Calderwood & Harkness LLP
cc: Omar Siddiqui, Calderwood & Harkness LLP
This letter and its contents are confidential and may be protected by the attorney-client privilege and/or the work product doctrine. This letter is intended solely for the addressee. Any unauthorized review, use, disclosure, or distribution is prohibited. If you have received this letter in error, please notify the sender immediately and destroy all copies.

CALDERWOOD & HARKNESS LLP Attorneys at Law

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CALDERWOOD & HARKNESS LLP

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