Ecoark and Zest Labs File Complaint Against Deloitte to Recover Several Hundred Million Dollars

Rhea-AI Summary

On September 21, 2021, Zest Labs, a subsidiary of Ecoark Holdings (NASDAQ: ZEST), filed a lawsuit against Deloitte Consulting in Nevada for violating the Nevada Uniform Trade Secret Act. The complaint seeks hundreds of millions in damages and claims Deloitte misused proprietary information shared during a previous collaboration. Zest Labs' technology aims to reduce food waste and improve freshness, addressing an $85 billion issue in the fresh food supply chain. CEO Randy May emphasized the company's commitment to protecting its intellectual property for the benefit of shareholders and customers.

Positive

• Zest Fresh aims to significantly reduce fresh food waste, addressing a market problem worth $85 billion.
• The lawsuit highlights Zest Labs' commitment to protecting intellectual property, reinforcing its market position.

Negative

• The legal action against Deloitte may distract from Zest Labs' core business objectives and operations.
• The outcome of the lawsuit could lead to significant financial implications based on the claim of hundreds of millions in damages.

SAN ANTONIO, Sept. 21, 2021 (GLOBE NEWSWIRE) -- Zest Labs™, an AgTech company modernizing the post-harvest fresh food supply chain, today announced that it and Ecoark Holdings, Inc. (NASDAQ: ZEST) (“Ecoark”), its parent company, have filed a complaint against Deloitte Consulting, LLP (“Deloitte”) in the Eighth Judicial District Court in Clark County, Nevada. The complaint is for violation of the Nevada Uniform Trade Secret Act and will also be seeking a preliminary and permanent injunction, attorney’s fees, and punitive damages. The damages at issue are in the hundreds of millions of dollars. “Intellectual property is key to America’s modern economy. We are continuously monitoring to ensure that the sanctity of our intellectual property remains intact. We have a fiduciary obligation to our shareholders, customers, and employees to ensure that we address any and all infractions,” stated Randy May, Chief Executive Officer of Ecoark.

Zest Labs developed Zest Fresh, which is proven to significantly reduce field to shelf food waste while improving delivered freshness to consumers. The data and insights provided by Zest Fresh are designed to also help growers, food distributors and retailers reduce the $85 billion problem of fresh food waste, which is estimated at nearly 33% of all fresh food.

In 2016, a retail customer committed to a pilot program and deployment of Zest Fresh. During this time, Zest Labs began work with Deloitte, at a confidential, but material expense to Zest Labs. Over the course of several months throughout 2016, Zest Labs engaged in significant discussions, presentations, demonstrations, and information downloads with Deloitte. Zest Labs worked extensively with Deloitte demonstrating how the Zest Fresh solution would improve the consistency of delivered shelf life and help reduce Fresh Food Shrink. During this time, Zest Labs’ proprietary information was shared with Deloitte. Deloitte specifically acknowledged the information was proprietary and confidential.

“We were concerned to see Deloitte introduce their first Fresh solution, led by personnel that directly worked with Zest Labs, following our work together,” said Peter Mehring, CEO of Zest Labs. “Deloitte’s ‘proprietary Fresh Analytics tool set’ description highlights financial and operational benefits just as those provided by Zest Fresh and includes implementation details previously only found in Zest Fresh. The lack of related industry experience prior to working with Zest, the strong similarities in their solution description and details, and the timing of their Fresh consulting launch leads to only one reasonable conclusion.”

About Ecoark Holdings, Inc.

Founded in 2011, Ecoark is a diversified holding company. The company has three wholly owned subsidiaries: Zest Labs, Inc. (“Zest Labs”), Banner Midstream Corp (“Banner Midstream”) and Agora Digital Holdings Inc. (“Agora”), the parent of Trend Holdings, LLC (“Trend”). Zest Labs, offers the Zest Fresh™ solution, a breakthrough approach to quality management of fresh food, is specifically designed to help substantially reduce the $161 billion amount of food loss the U.S. experiences each year. Banner Midstream is engaged in oil and gas exploration, production, and drilling operations on over 30,000 cumulative acres of active mineral leases in Texas, Louisiana, and Mississippi. Banner Midstream also provides transportation and logistics services and procures and finances equipment to oilfield transportation services contractors. Agora was formed to acquire Trend and its new cryptocurrency mining subsidiary, Bitstream Mining LLC. In addition to leading this new business opportunity, Trend invests in a select number of early-stage startups each year as part of the fund’s venture capital strategy; it is an open-minded investor with a founder-first mentality. A Trend subsidiary, Trend Discovery LP, has an audited track record of uncorrelated outperformance of the S&P 500 since inception.

ZEST FRESH™ and Zest Labs™ are trademarks of Zest Labs, Inc.

Forward-looking Statements

This release contains forward-looking statements, including, without limitation, statements concerning the ability of Zest Labs’ technology to improve delivered quality consistency, significantly reduce perishable food waste, drive sustainability, and increase efficiency in the industry. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons including: access to growth capital on favorable terms; the impact of COVID-19 on our business and on the economy, adverse economic changes affecting markets we serve; competition in our markets and industry segments; our timing and the profitability of entering new markets; greater than expected costs, customer acceptance of our products or difficulties related to our integration of the businesses we may acquire; and other risks and uncertainties as may be detailed from time to time in our public announcements and SEC filings including the Form 10-K for the year ended March 31, 2021 and our prospectus supplement dated August 4, 2021. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and our future results, levels of activity, performance or achievements may not meet these expectations. We do not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our expectations, except as required by law.

Contact:

Investor Relations:
Marc Silverberg, ICR
Brian McBride, Ecoark
1-800-762-7293
investorrelations@ecoarkusa.com

FAQ

What is the lawsuit that Ecoark Holdings (ZEST) filed against Deloitte?

Ecoark Holdings filed a lawsuit against Deloitte for violating trade secret laws, seeking hundreds of millions in damages.

How does Zest Labs' technology aim to impact food waste?

Zest Labs developed Zest Fresh to significantly reduce food waste and improve freshness in the supply chain.

What are the potential financial implications of the lawsuit for Ecoark (ZEST)?

The lawsuit could have significant financial implications, including potential damages in the hundreds of millions.

When was the complaint against Deloitte filed by Ecoark (ZEST)?

The complaint was filed on September 21, 2021.