Delaware Court of Chancery Opinion on Exceptions

COURT OF CHANCERY OF THE STATE OF DELA WARE B ONNIE W. D AVID V ICE C HANCELLOR C OURT OF C HANCERY C OUR THOUSE 34 T HE C IRCLE G EORGETOWN, DE 19947 Date Submitte d: January 21, 2026 Date Decided: Febr uary 13, 2026 Joseph B. Cicer o, Esq. Dakota B. Eckenr ode, Esq. Chipman Bro wn Cicero & Cole, LLP 1313 N. Market St., Ste. 5400 Wilmington, DE 19801 David Wilks, E sq. Matthew C. Con over, Esq. Wilks Law, L LC 4250 Lancaster P ike, Ste. 20 0 Wilmington, DE 19805 RE: Anthony Fai llace v. Outlander G amma 5.2, LLC, C.A. No. 2025-0582- DG (BWD) Dear Counsel: This letter resolves defenda nt Outlander Gamm a 5.2, LLC’s (“ Outlander ”) exceptions (the “Excepti ons”) to the Magistrate in Chancery’ s October 24, 2025 post-trial report (the “ Report ”) in this books and records action. Magistrate’s Report [hereinafter Report], Dkt. 43. As detailed i n the Report, Outlander is a D elaware limited liability company and a special pu rpose investment vehicle f ormed to facilita te a n inve stment in Cyan Robotics, Inc. Id. at 1. Plaintiff Anthony Faillace (“Plaint iff”) is a member of Outlander an d the manag ing par tner of Dra ke M anagem ent, a “family office ” investment f irm that mana ges money solely on b ehalf of Plai ntiff. Id. at 2.

Anthony Faillace v. Ou tlander Gamma 5. 2, LLC, C.A. No. 2025 -05 82-DG (BWD) February 13, 2026 Page 2 of 10 In N ovember 2 021, Plain tiff invested $3 mil lion i n O utlander in ex change fo r membership units. Id. at 3. Plaintiff contends that in connection with his investment, Outlander represen ted that Plaintiff woul d receive “full ratchet anti -dilution protections. ” Id. According to Outlander, however, the “ S ubscriptio n A greement ” 1 governing Plaintiff’s investment does n ot include those rights. Id. at 6; O B at 4 – 5. Outlander denies that it made any s uch representations and argues that the Subscription Agreemen t ’s anti-reliance provision and the LLC Agreement ’s integration cla use foreclose Plain tiff’s position. OB at 4 – 5. On November 28, 2023, Outlander distrib uted a capitalization table for the company that identified Plaintiff as ownin g 1,865,996 shares under a column labeled “Post - Outlander True Up FD.” Report at 3. Plaintiff argues that th is figure was consistent w ith his alleged anti-dilution rights. Id. But in December, Outlander asserted that the figur es in the first capitaliz ation table were inaccurate and circulated a revised table that iden tified Plaintiff a s owning fewer shar es. Id. at 4; Pl.’ s Answering Br. in Opp’n to Def.’s Exception s to the Magistrate’s Final Report 1 The Subscription Agr eement incorporates t he terms of the Outland er Gamma 5.2 LLC Agreement (the “LLC Agreement”). Opening Br. in Supp. of It s Exceptions to the Magistrate’s Final Re port [hereinafter O B] at 4, Dkt. 62. Together, “ the S ubscription Agreement and LLC Agreement co ntain all the rights, warrant ies, and obligations of [Outlander] ’s investor - members and its m anager, Outlan der Manage ment. ” Id.

Anthony Faillace v. Ou tlander Gamma 5. 2, LLC, C.A. No. 2025 -05 82-DG (BWD) February 13, 2026 Page 3 of 10 [hereinafter AB] at 4, Dkt. 64. “ How the incorrect cap table came to be is... not something tha t [Outlander is] a ble to furthe r explain.” Report at 6. Plaintiff s erved a d emand to i nspect books and records (the “Demand”) on Outlander’s manager on August 27, 2024. Id. at 5. Plaintiff made th e D emand for the stated purposes of valuation, investigat ing potential wrongdoing, and communicati ng with other members about Plaintiff’s valuat ion and investigation of wrongdoing. Id. a t 5 – 6. Outlander responde d to the Demand by producing all of the books and records Plaintiff sought, with one exception. Id. at 7. The Demand sought, among other books and records, “the curre nt list of all members of O utlander Gamma 5.2, LLC and their last k nown business, home or mailing address [es] ” (the “Member List”). Id. Outlander refused to produce the Member List, arguin g that Plaintiff failed to state a proper purpose to i nvestigate wrongdoing; the Member List was not necessary and essential fo r Plaintiff’s valuation purpose; Plaintiff sought the Member List for improper purposes; and Outlander, as a venture capital fund, had a particularly strong interest i n maintain ing strict confid entiality of its Mem ber List. Id. at 7 – 8. On May 23, 2025, Plaintiff initiated this action through the filing of a Verified Complaint, seeking to compel inspecti on of the Member List. Id. at 9. The actio n was assigned to a Magistrate in Chancery, who held a one -day trial on a paper record

Anthony Faillace v. Ou tlander Gamma 5. 2, LLC, C.A. No. 2025 -05 82-DG (BWD) February 13, 2026 Page 4 of 10 on S eptember 16. Id. at 10. The Mag istrate Judge issue d her Re port on October 24. In the Report, the Magis trate in Chancery co ncluded that the Demand stated two independent proper purp oses supporting inspecti on — commu nicating with other members and investigating possible wrongdoing. 2 See id. at 14 – 15; id. at 16 – 18. The Report further concluded that the Member List is necessary and essential to Plaintiff’s proper purpose s and rejected Outlander’s arguments against producing the Member List —including that Plaintiff’s stated p urposes are pretextual and that Title 6, Section 18-305(c) permi ts Outlander’s manager to withhold the Mem ber list. Id. at 18 – 35. Finally, the Report found that Outlander’s conduct in opposing the Demand suppor ted fee-shifting. Id. a t 36 – 40. Outlander filed Exceptions to the Report on December 9, 2025. Dkt. 56. Briefing on the Exceptions c oncluded on January 21, 2026. 3 Oral argume nt i s unnecessary. I have reviewed the trial record and t he Magistrate in Chancery’s 2 Outlander did not chal lenge Pl aintiff’s valu ation purpose. See Repo rt at 1 4 n.61 (noting that Outlander produc ed financial books an d records to satisfy Plaintiff’s valuation purpose). 3 On January 9, Outlan der filed its openin g brief in support of the Exceptions. OB, D kt. 62. On January 16, Plaintiff filed his answerin g brief in opposition to the Exceptions. AB, Dkt. 64. On January 21, Outlander file d its repl y brief in further support of the Exceptions. Def.’s Repl y Br. in Supp. of Its E xceptions to the Magi strate’s Final Report [h ereinafter RB], Dkt. 66.

Anthony Faillace v. Ou tlander Gamma 5. 2, LLC, C.A. No. 2025 -05 82-DG (BWD) February 13, 2026 Page 5 of 10 determination s de novo. DiGiacobbe v. Sestak, 743 A.2d 180, 184 (Del. 1 999). Good cause d oes not exist t o expand t he record. See Ct. Ch. R. 144(e). Outlander raises three arguments on Excep tions. First, Outlander takes exception to the Magistrate Judge’s conclusion that the Demand stated a credible basis to suspect wrongd oing. OB at 1 4 – 23. As Plaintiff points out, however, Plaintiff established another, independen t purpose to inspect the Member List — communicati ng with members about valuation — to which Outlander does not take exception. AB at 2. Outlander ’s reply appears to withdraw this aspe ct of the Exceptions, and I do not address it further. S ee generally RB (failing to respond to arguments concer ning Plaint iff’s investiga tory purpose). 4 Second, Outlander takes exce ption to the Report ’s determin ation that the Member List is not a trade secret under Section 18 -305(c), which permits the manager of a limited liability com pany “to keep confi dential fr om the memb ers, for such period of time as the manager deems reasonable, any information which the manager reasonably believes to be in the n ature of trade secrets. ” 6 Del. C. § 18 - 4 RB at 1 (pivoting f rom this argument and as serting instead that “ w hile [Outlander] alleges that ‘[t]he Company’s f ailure to lodge an exception to each purpose that the Report deemed proper ends the inquiry[,] ’ this wholly neglects [Outlander] ’s second exception, which argues t hat even if Plai ntiff’s purposes are deemed proper, t he [Member] List qual ifies as a trade secret protected from discl osure under 6 Del. C. § 18-305(c) ”).

Anthony Faillace v. Ou tlander Gamma 5. 2, LLC, C.A. No. 2025 -05 82-DG (BWD) February 13, 2026 Page 6 of 10 305(c); OB at 24 – 27. The Report, relying on p ast precedent, rejected Outlander’s position “that t he [M]ember [L]ist is an ‘ Investor List, ’ which is ‘ like a customer list ’ and ‘ qualifies as a trade s ecret. ’” Report at 32 (citing Marilyn Abram s Living Tr. v. Pope Invs. LLC, 2017 WL 1064647, at *6 (Del. Ch. Mar. 21, 2017), and Garlington v. Two Rivers Farm, LLC, 2025 WL 1077316, at *5 (Del. Ch. Apr. 7, 2025), a ff’d, 2025 WL 3551943 (Del. 2025) (TABL E)). Outlander asserts that the Report “ overstates the applicability ” of th is authority and “ discounts the unique emphasis on in vestor privac y in the ve nture cap ital context. ” OB at 24. “Believ ing the [Mag istrate Judge] to have dealt with the issues... i n a proper manner, and having articulated the reasons for her decision well, there is n o n eed for me to repea t her analysis.” Blackburn v. Hooks, 2018 WL 4643812, at *2 (Del. Ch. Sep. 26, 2018) (quoting In re Erdman, 2011 WL 2191680, at *1 (Del. Ch. May 26, 2011)). I add only that, to the extent Outlander contends there is a “heighte ne d need for secrecy in venture capital” compared to priva te equity, OB at 27, Outlander’s arguments hold l ittle persuasive value here, where Plaintiff invests capital for only one person, does n ot compete for investors, and has agreed to a confidential ity order. 5 See AB at 29. 5 See OB at 26 (“[A] venture capital f und’s investor list i s a curate d, high - value set of capital providers, and disclosure can provide competitors with a free and targeted roadmap

Anthony Faillace v. Ou tlander Gamma 5. 2, LLC, C.A. No. 2025 -05 82-DG (BWD) February 13, 2026 Page 7 of 10 Finally, Outlander takes exception to the M agistrate Judge’s r eco mmendation on fee-sh ifting. OB at 27 – 30. “Delaware courts follow the American Rule that ‘each party is generally expected to pay its own attorneys’ fees regardless of the outcome of the litigation.’” Pettry v. Gilead S cis., Inc., 2020 WL 6 870461, at *29 (Del. Ch. Nov. 24, 2020) (quoting Shawe v. Elting, 157 A.3d 142, 149 (Del. 2 017)). An exception exists in equity, however, when a party litigates in bad faith. Rice v. Herrigan-Ferro, 2004 WL 1587563, at *1 (Del. Ch. July 12, 20 04). This Court has recognized that in “extraordinary circumstances,” “ overly aggressive l itigatio n strategies ” empl oyed to impro perly resist a books and records de mand may warr ant fee -shifting. P ettry, 2020 WL 6870461, at *29 – 30 (ci tation o mitted). A party seeking to s hift fees must satisfy “ the stringent evidentiar y burden o f produci ng ‘ clear evidence ’ of bad faith. ” Dearing v. Mixmax, Inc., 2023 WL 2632476, at *5 (Del. Ch. Mar. 23, 2023) (ORDER) (quoting Beck v. Atl. Coast PLC, 868 A. 2d 840, 851 (Del. Ch. 2005)). To warrant fees, a litigant’s conduct must be “glaring[ly] egregious.” Seidma n v. Blue Foundry Bancorp, 2023 WL 450 3948, at *6 (De l. Ch. July 7, 2023). of whom to solicit for their own fund s’ growth. ”); RB at 16 (ar guing that disclosu re of the Member List “ would p ose a substantial risk of competit ive har m to the Company beca use it would allow a co mpetitor to targ et, interfere with, or replicate th ose relationshi ps ”).

Anthony Faillace v. Ou tlander Gamma 5. 2, LLC, C.A. No. 2025 -05 82-DG (BWD) February 13, 2026 Page 8 of 10 On de novo review, I do not believe Plaintiff has met the high bar to demonstrate clear evidence of bad faith warranting fee-shifting. When faced with the Demand, Outlander voluntarily produced all the books and records Plaintiff sought e xcept for the Member List. See Report at 7. In the litiga tion, Ou tlander did not require Plaintiff t o sit for a d eposition or engage in an y material document production, thereby avoidin g motion practice in discovery, agreed to a trial on a paper record, and ma de at least one prop osal to resolve the dis pute before t rial. O B at 29; Report at 10 n.45. To my m ind, those fac ts undercut a f inding of b ad faith. 6 6 By contrast, the Court has shift ed fees in bo oks and records pr oceedings in whic h the defendants engaged in a pattern of abusing the litigation process. See, e.g., PVH Polymath Venture Hldgs. Ltd. v. TAG Fintech, Inc., 2024 WL 371084, at *9 (Del. Ch. Jan. 31, 2024) (shifting fees where the defendant “ [s]o ught to needlessly compl icate and delay the proceedings, includi ng by (1) producing an expert opinion a ttempting to inject new issues under Cyprus law aft er the discovery dead line; (2) purport ing to unilaterally cance l Plaintiff ’ s shares on the eve of the pre -trial conference and seeki ng to postpone trial on that basis; (3) insisting on the presentatio n of live testimony at tri al when, under the circumstances, the disputed issues could easily have been resolv ed on the papers; (4) refusing to st ipulate to the a uthenticity of most documents at tri al; and (5) requiri ng Plaintiff to inspect the Company ’s books and records in person in Abu Dhabi” (footnotes omitted)); Myers v. Ac ad. Sec., Inc., 2023 WL 6380449, at *2 (Del. Ch. Oct. 2, 202 3) (ORDER) (granting par tial fee award where the defendant “forced the parties to litigate [a] baseless standin g def ense thro ugh trial” and “raised other baseless factual assertions and legal red herrings”), R. & R. adopte d, 202 3 WL 6846984 (Del. Ch. Oct. 16, 2023); Seidman, 2023 WL 4503948, at *6 – 8 (shiftin g fees whe re the defendant “took a serie s of litigation positions that, when viewed collecti vely, were glari ngly e gregious,” including taking “aggressive positions in discovery” and making “demonstrably false statements” in briefing); Pettry, 2020 WL 6870461, at *30 (shifting fee s where the defendant “ block[ed ] legitimate discovery, misrepresent [ed] the r ecord, and t[o ok] posi tions for no appare nt purpose other than obst ructing the exercise of Plaintiffs’ statutory rights ”).

Anthony Faillace v. Ou tlander Gamma 5. 2, LLC, C.A. No. 2025 -05 82-DG (BWD) February 13, 2026 Page 9 of 10 Plaintiff also has not s hown that Outlander acted in bad faith by improperly withholding records to which Plaintiff had “a clearly defined and established right[.]” Pettry v. Gilead Scis., Inc., 2021 WL 3087027, at *1 (D el. Ch. July 22, 2021) (qu oting McGowan v. Empress Ent., Inc., 791 A.2d 1, 4 (Del. Ch. 2000)). Outlander’s argume nts were unsuccessful, but in my view, they were not frivolous. 7 “ [W]inning on the merits does not automaticall y entitle a Section 220 p laintiff to fees; again, fee s hifting is appropriate in the rare event that a party h as litigated vexatiously or otherw ise acted in subjective bad faith.” Hashemi v. All.Heal th, I nc., 2024 WL 1500659, at *3 (Del. Ch. Apr. 8, 2024); see also Gen. Video Corp. v. Kertesz, 2009 WL 1 06509, at *1 (Del. Ch. Jan. 13, 2009) (noting “the simple fact that” a party’s positions “were disproven at t rial is not itself clear evidence of b ad faith”). Because Plaint iff’s litigation positions do not reflect an “ abuse of process that is manifestly incompati ble with justice ” o r “ an attempt t o game the system ” in bad faith, 8 this aspect of the Except ions is susta ined. 7 The Magistrate Judge concluded that some of Outlan der’s arg uments — inc luding its citation to a case that was overruled and it s attempt to distinguis h its credible basis arguments from the kind of merits -based, “actionability” argumen ts precluded under AmerisourceBergen Corp. v. Lebanon Cty. Emp l s.’ Ret. Fund, 243 A.3d 417 (Del. 2020) — were “baseless” and co nstituted glaringly egregious conduct. Report at 3 6 – 39. 8 Donnelly v. Keryx Bio pharmaceuticals, Inc., 2019 WL 5446015, at *6 (Del. Ch. Oct. 24, 2019).

Anthony Faillace v. Ou tlander Gamma 5. 2, LLC, C.A. No. 2025 -05 82-DG (BWD) February 13, 2026 Page 10 of 10 For the reasons explained above, the Exceptions are largely overruled, and the Report is adop ted with mo difications o n fee-shifting only. Sincerely, /s/ Bonnie W. Dav id Bonnie W. Da vid Vice Chancellor cc: All counsel of record (by F ile & ServeXpress)