{"url_path":"/sec/sntl/10-k/2026/item-3","section_key":"item-3","section_title":"Item 3 Legal Proceedings**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-05","source_url":"https://www.sec.gov/Archives/edgar/data/889353/0001096906-26-000918-index.html","accession_number":"0001096906-26-000918","cik":"0000889353","ticker":"SNTL","issuer_name":"Sentinel Holdings Ltd.","edgar_url":"https://www.sec.gov/Archives/edgar/data/889353/0001096906-26-000918-index.html","primary_entity_key":"0000889353","primary_entity_name":"Sentinel Holdings Ltd."},"word_count":979,"has_tables":true,"body_markdown":"**Item 3. Legal Proceedings**\n\n \n\nThe Company is subject to litigation claims arising in the ordinary course of business. The Company records litigation accruals for legal matters which are both probable and estimable and for related legal costs as incurred. The Company does not reduce these liabilities for potential insurance or third-party recoveries.\n\n \n\nAs of December 31, 2025, the Company was engaged in litigation with several parties as described below.\n\n \n\n1)\n\nStrategic Funding Source, Inc. d/b/a Kapitus, a New York corporation as Plaintiff against Gladiator Solutions, Inc. an Arizona corporation, Sentinel Holdings Ltd, a Nevada corporation, and Matthew C. Materazo an individual (Case No. 24cv438754), with an unlimited Civil Cross Complaint Gladiator Solutions, Inc. an Arizona corporation, Sentinel Holdings Ltd, a Nevada corporation, Cross-Complainants vs. Matthew C. Materazo.\n\n \n\n \n\nThis matter involves a dispute over financing that was procured without approval or knowledge of the Company by Matthew C. Materazo to the detriment of Gladiator Solutions, Inc. and its shareholders. This complaint was initially filed by Strategic Funding Source against Gladiator Solutions for breach of a loan agreement and against Matthew Materazo to enforce a personal guaranty on the subject loan. The plaintiff alleges Gladiator owes $100,098. The Plaintiff also added Sentinel Holdings Ltd as an “alter ego” defendant of Gladiator. The Company filed an Answer to the Complaint, asserting that Gladiator’s former President Matt Materazo obtained the loan without authority or consent from Gladiator or Sentinel Holdings Ltd, and the Company filed a Cross-Complaint against Matt Materazo for indemnity for this unauthorized loan.\n\n \n\n \n\n2)\n\nJames Martime Holdings, Inc. v. Matthew Materazo (Case No. C24-01956).\n\n \n\n \n\nJames Maritime Holdings, Inc. (now known as Sentinel Holdings Ltd.) filed this action against defendant Matthew Materazo. The Complaint asserts that Matthew Materazo breached his fiduciary duties owed to Gladiator Solutions, Inc. and violated related duties by procuring merchant cash advance loans from various third party lenders under the name of Gladiator Solutions, without the knowledge or consent of Gladiator Solutions or Sentinel Holdings. The Complaint also seeks a judicial declaration that Sentinel Holdings is entitled to rescind or “claw back” 500,000 shares of Sentinel Holdings that was issued to Matthew Materazo and certain other previous shareholders of Gladiator Solutions pursuant to a Share Exchange Agreement between the parties.\n\n \n\n \n\nMatthew Materazo has filed a request with the Court seeking permission to file Cross-Complaints against Sentinel Holdings and certain other third parties asserting claims that he was allegedly induced to enter into the Share Exchange Agreement by certain representations that are not included in the fully integrated Share Exchange Agreement regarding potential future financings for the benefit of Gladiator Solutions. Sentinel Holdings and Gladiator Solutions opposed Matthew Materazo’s request to file the proposed Cross-Complaints. As of December 31, 2025, the Court had not ruled on Matthew Materazo’s request to file Cross-Complaints.\n\n \n\n \n\n14\n\n*Table of Contents*\n\n \n\n3)\n\nRedwood Fire & Casualty Ins. Co. v. United Security Specialists, Inc.\n\n \n\n \n\nThis matter is a case against USS and Sentinel Holdings Ltd for unpaid workers comp insurance premiums. The unpaid balance was $36,947. The Company negotiated a settlement for this claim in the amount of $4,000 per month for nine months. The payments have not been completed.\n\n \n\n \n\n4)\n\nSlavisa Rasic v. United Security Specialists, Inc. and Sentinel Holdings Ltd. (Case No. 5:25-cv-07125-BLF).\n\n \n\n \n\nPlaintiff Slavisa Rasic filed this action against United Security Specialists, Inc. asserting claims for alleged labor code violations and for the alleged wrongful termination of his employment. Plaintiff also added Sentinel Holdings Ltd. as the alleged alter ego of United Security Specialists, Inc. Sentinel Holdings Ltd filed a motion to dismiss the Complaint on the grounds that it was not the alter ego of United Security Specialists and that the court did not have jurisdiction over Sentinel Holdings. On February 26, 2026, the Court dismissed Plaintiff’s Complaint in its entirety on the grounds that the Court did not have jurisdiction over the case.\n\n \n\n \n\n5)\n\nVertol LLC v. Gladiator Solutions, Inc.\n\n \n\n \n\nThis case involves an arbitration claim by Vertol LLC against Gladiator Solutions filed by the Claimant with the American Arbitration Association. The Claimant alleges that Gladiator Solutions failed to deliver certain products as required by a contract between Claimant and Gladiator Solutions. Matthew Materazo (the former President of Gladiator Solutions) appeared at the arbitration hearing as the unauthorized representative of Gladiator Solutions without notifying Gladiator Solutions or Sentinel Holdings of the claim asserted by Vertol or the arbitration proceeding itself. On or about February 23, 2026, Gladiator Solutions and Sentinel Holdings was notified, for the first time, by the Claimant that an arbitration award had been rendered against Gladiator Solutions on June 17, 2025 in the total amount of $332,081. Gladiator Solutions and Sentinel Holdings are evaluating the arbitration award and assessing a potential challenge to the award.\n\n \n\n \n\n6)\n\nMercy Falls LLC v. United Security Specialists, Inc. (Case No. 25CV468267).\n\n \n\n \n\nMercy Falls LLC filed this action alleging that United Security Specialists, Inc. (USS) breached a consulting agreement by failing to remit payments purportedly due under the agreement for consulting services. Plaintiff alleges that USS owes approximately $140,000 under the consulting agreement. USS filed its Answer to the Complaint, denying Plaintiff’s claims and filed a Cross-Complaint against Mercy Falls LLC asserting claims for fraudulent concealment and intentional misrepresentation, and breach of contract.\n\n \n\n \n\n7)\n\nEardley v. Sentinel Holdings Ltd\n\n \n\n \n\nThis matter is a case against Sentinel by its former CEO seeking a declaratory judgment claiming that shares issued to him while CEO were not authorized by the Company. The Company has counterclaimed for breach of Contract, for fraud, for breach of duty, for self-dealing and for violation of Section 10(b) and Rule 10(b)5 under the Securities and Exchange Act of 1934, and has also commenced a third-party claim against Michelle Turpin, as strawman, claiming that the two colluded to wrongfully have shares issued for the benefit of Eardley. The Company is vigorously pursuing its claims and defending the claims by Eardley."}