LQR House faces lawsuit seeking asset freeze and board injunction

LQR House Inc. (NASDAQ:YHC) disclosed Tuesday that it and its entire board of directors have been named as defendants in a lawsuit filed by Kingbird Ventures, LLC. The complaint, submitted July 11 before the Eighth Judicial District Court in Clark County, Nevada, alleges breach of fiduciary duties, violations of multiple Nevada statutes, alter ego liability, and civil conspiracy, among other claims. The micro-cap company, currently valued at $4.19 million, has seen its stock surge over 100% in the past week despite the legal challenges.

According to the company’s statement, the lawsuit seeks a declaratory judgment, a temporary restraining order, and a preliminary injunction to freeze the assets of LQR House, its Chief Executive Officer Sean Dollinger, and other defendants reportedly controlled by Dollinger. The complaint also requests injunctive relief to prevent the company from making further material corporate decisions, including changes to its governance or capital structure, and asks the court to appoint a receiver over the company. Undisclosed monetary damages are also being sought.

LQR House stated it has not yet been served with the complaint or any related legal documents. The company said it has no record of Kingbird Ventures, LLC, in its books and records and is unaware of its identity or whether it is a shareholder.

The company indicated its intention to defend itself in the litigation, stating that it believes there are numerous factual inaccuracies in the complaint. LQR House also noted that no assurances can be made regarding the outcome of the case.

This information is based on a press release statement included in a recent SEC filing. LQR House’s common stock is listed on the Nasdaq Stock Market under the ticker symbol YHC.

In other recent news, LQR House Inc. has announced a 35-for-1 reverse stock split of its common stock, effective April 21, 2025. This measure is intended to meet Nasdaq’s listing requirements and improve the company’s capital structure. The reverse stock split will decrease the number of issued and outstanding shares from approximately 37.3 million to about 1.07 million. Additionally, the number of authorized shares will be adjusted from 350 million to 10 million. In another development, the company has received its third purchase order from Ontario-based Of The Earth Distribution Corp. for 176 cases of SWOL Tequila. This order introduces a new 9-bottle case format and enhanced bottle design to increase market visibility in Canada. Furthermore, LQR House has set its 2025 Annual Meeting of Stockholders for May 30, 2025, and has opened nominations for directors. Stockholders must submit proposals by April 30, 2025, to be included in the proxy statement.

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