Jiggy Puzzles v. Steelhead Acquisition - Summary Judgment Order

IN THE SUPE RIOR COURT O F THE STATE O F DEL AWARE JIGGY PUZZL ES, LLC,)) Plaintiff/Countercla im) Defendant,) v.) C.A. No. N24C-10- 21 2 PRW) CCLD STEELHEAD A CQUISITIO N EE,) INC. AND AESTUARY, I NC,)) Defendants/Counterclaim) Plaintiffs) Submitted: Januar y 14, 2026 Decided: Februar y 18, 2026 Upon Defenda nt /Countercl aim Plaintiff Aestuary. I nc.’s Motion for Su mmary Ju dgment, DENIED. Upon Defenda nt/Counterc laim Plaint iff Steelhe ad Acquisiti on EE, Inc.’s Motion for Part ial Summary J udgment, GRANTED, in p art, and DENIE D, in part. Upon Plainti ff Jiggy Puzzle s, LLC’s Motion for Part ial Summary J udgment GRANTED, in p art, and DEN IED, in part. MEMORANDUM OPINIO N AND O RDER Blake A. Bennett, Esquire, C OOCH & T AYLOR P. A., Wilmington, Delaware; Kyle W. Roche, Es quire (argued), Ve lvel Freed man, Esquire, Rile y Clafton, Esquire, and Mendel Konikov, Esquire, F REEDMAN N ORMAND F RIEDLAND LLP, New York, New York, Attorneys for Plaintiff/Countercla im Defendant Jiggy Puzzles, LLC.

Alexandra M. Cumings, Esquire, and Jialu Zou, Esquire, M ORRIS, N ICHO LS, A RSHT & T UNNELL LLP, Wilmin gton, Delaware; Blaine I. Gree n, Esquire (argued), and Jeremy F. Ruef, Esquire, P ILLSBU RY W INTHROP S HA W P ITT MAN LLP, San Francisc o, California, Attor neys fo r Defe ndants/Counterclaim Plaintiffs Steel head Acq uisition EE, I nc and Aestua ry, Inc. WALLACE, J.

Plaintiff Jiggy Puzzles, LLC (“Jiggy”) entered into an Asset Purcha se Agreement (“ AP A”) w ith Defendant Steelhead Acquisition EE (“ Steelhead ”), which is owned by Aestuary, Inc. (“Aestua ry” and collectivel y, “Defendants”). 1 After Closing, Jiggy su ed Steelhead for breach of contrac t and breach of the implied duty of good faith and fair dealing, and sued Aestuary fo r fraudule nt inducement. 2 Aestuary responded with a counterclaim of fraud against Jiggy. 3 And Steelhead countered with countercla ims of breach of contract, fraud, and breach of the i mplied covenan t of good fa ith and fair dea ling against Jiggy. 4 Now, the parties seek summary judgment. Specificall y, Steel head move s for summar y judgment on Jiggy’s breach - of - contract claim re l ating to the APA’s earnout provision and Jiggy’s implied-covenant claim, Aestuary moves for summary judgmen t on Jiggy’s fraud cla i m, and Jiggy move s for summary judgment on Aestuary’s fraud counterc laim, Steelhead’ s breach- of -contract counterclaim, Steelhead’s implied -covenant countercla i m, and several of the Defendants’ aff i rmati v e defense s. 1 See ge nerally Amend. Compl. (D.I. 58). 2 See id., 33 – 35. 3 See generally Def. Aest uary, Inc.’s Answer, A ffirmative Defenses, and Countercls. in Resp. to Amend. Compl. hereinafter “Aestuary’s Answer” or “ Aestua ry’s Countercl.”. 4 See generally Def. Steel head A cquisition EE Inc.’s Answer, Affirmative Defenses, and Countercls. in Resp. to Amend. Compl. hereinafter “Steelhead’s Answer” or “Steelhead’s Countercl.”.

For the foregoing reasons, Steelhead’s Motion for Partial Summar y Judgment is GR ANTED, in part, and DENIED, i n part, A estu ary’s Motion for Partial Summary Judgme nt is DENIED, and Jiggy’s Motion for Partial Summary Judgment is GR ANTED, in p a rt, and D ENIED, in part. I. BACKGRO UND Unless other w ise n o ted, the Co urt dra ws the following background from undisputed facts in the pleadings and d ocumentar y exhibits submitted by the parties. A. T HE P ARTIES Plaintiff Jiggy i s a Delaware li mited l iabilit y compan y. 5 Defendants Steelhead and Aestuary are both Delaware corp orations with their principal places of business in San Fran cisco, California; Steelhead is a wholly owne d subsidiary of A estuary. 6 B. T HE AP A Kaylin Marcotte founded Jiggy in N ovember 2019 as a niche puzzle brand that capitalized on the s urge of s tay- at -home hobbies duri ng the COVID-19 pandemic. 7 After rapid growth during its first two years, the J iggy business 5 Aestuary Countercl., at ¶ 2; Steelhead Countercl., at ¶ 2; Jiggy Puzzles, LLC’s Answer to Aestuary Inc.’s Countercl s. and Jiggy Puzzles, LLC’s Answer to Def. Ste elhead Acquisition EE Inc.’s Countercl s., at ¶ 2 (D.I. 96, 97). 6 Amend. Compl., at ¶¶ 8-9; Aestuary Answer, at ¶¶ 8-9; Steelhea d Ans wer, at ¶¶ 8-9. 7 Countercl. Pls. ’ Answering B r. in Opp ’n to Jiggy’s Mot. for Partial S umm. J. [hereinafter

leveled off and declined in 2022. 8 Because of this, Ms. Marcotte engaged DBD Partners (“DBD”) to find a buyer and facilitate sale of the business. 9 DBD’s outreach included contact with a b out 118 p otentia l buyers. 10 Through this ef fort, Jiggy obtained a letter of inte n t (“L OI”) fr o m Aestuary. 11 A fter signing the LOI, Aestuary forme d Stee l head to a cquire and hold Jiggy’s a ssets. 12 In April 2023, Aes tuary o perations associate Da vid Herrera sent Ms. Marcotte an email expressing interest in a potential acquisition. 13 The parties conducted due diligence leading up to the acquisition. 14 Then, Ms. Marcotte presented Jiggy to Aestuary co-founders and executives Adam Brzeczek and Juan Castellanos. 15 “Defs.’ Opp’n.”], at 5 (D.I. 106) (citing Amend. Compl., at ¶ 14); Aff. of Blaine I. Green in Supp. of Steelhead’s Op. Br. in Supp. of its Mot. for Summ. J. [hereinafter “Green Aff.”], Ex. A [hereinafter “ Marcotte 10/14 Tr. ”], at 13 (D.I. 90). 8 Marcotte 10/14 Tr., at 15 0; Green A ff., Ex. C. [h ereinafter “Marcotte 10/21 Tr.”], at 231 (D.I. 90). 9 Marcotte 10/14 Tr., at 196 – 197. 10 Transmittal Aff. of Alexandra M. Cumings in Supp. of Countercl. Pls.’ Answering Br. in Opp’n to Jiggy’s Mot. for Partial Summ. J. [hereinafter “Cumings Opp’n Aff.”], Ex. 5 (D.I. 106). 11 Green Aff., Ex. B [hereinafter “ Marcotte 10/16 Tr. ”], at 14 (D.I. 90); Cumings Opp’n Aff., Ex. 6 (D.I. 106). 12 Defs.’ Opp’n, 8; Pl. Jiggy Puzzles, LLC’s Op. Br. in Supp. of its Partial M ot. for Summ. J. [hereinafter “Jiggy Op. Br.”], at 1 (D.I. 93). 13 Amend. Compl., at ¶ 24; Aestuary Answer, at ¶ 24; Steelhead Answer, at ¶ 24. 14 Amend. Compl., at ¶ 28; Aestuary Answer, at ¶ 28; S teelhead Answ er, at ¶ 28. 15 Marcotte 10/14 Tr., at 228.

During negot i ations, Aestuary represented t o Jig gy that: (1) Aestuary had sig nificant cash re s erve s on hand; (2) Aestuary’s equity invest ors had committed sufficient capital to gro w its portf o lio com panies, includin g Jiggy; (3) Aestuary had the financial and human resources to expand Jiggy’ s opera tions; and (4) Aestuary intended to d eploy its marketing, s upply chain, and operations expertise to virtually guarantee it would grow Jiggy’s re venue by at least ten percent. 16 In the lead-up to signing the A PA, J iggy presented profit-and- loss statements and financial information from DBD and an outsource d accountant, Empire Tax. 17 After Aestuary identified inconsistencies in Jiggy’s reported financials, th e parties agreed t o red uce the purchase price. 18 C. APA M ATERIAL P ROVISIONS Jiggy and Steelhead ex ecuted the A PA on August 17, 2 0 23. 19 The A PA is a valid and enforceab l e contract supported by adequate consideration. 20 16 Aestuary’s Op. Br. in Supp. of its Mot. for Summ. J. [hereinafter “Aestuary Op. Br.”], at 1 (D.I. 89) (citing Amend. Compl., at ¶¶ 2, 31, 128); Decl. of Kaylin Marcotte in S upp. of Jiggy Puzzles LLC’s Opp’ns to Defs.’ Motions for Summ. J. [hereinafter “ Marcotte 12/8 Decl. ”], at ¶¶ 5 – 6 (D.I. 105); Marcotte Tr. 10/14, at 56 – 57. 17 Decl. of Kaylin Marcotte in Supp. of Jiggy Puzzles LLC’s Motion for Summ. J. [hereinafter “ Marcotte 11/7 Decl. ”], at ¶¶ 5 – 8 (D.I. 93). 18 Cumings Opp’n Aff., Ex. 13. 19 Defs.’ Opp’n, at 9 (citing Amend. Compl., at ¶ 1); See Transmittal Aff. of Blake A. Bennett [hereinafter “Bennett Op. Aff.”], Ex. 32 hereinafter “APA”; Marcotte 10/14 Tr., at 14. 20 Amend. Compl., at ¶ 113; Aestuary Answer, at ¶ 113; Steelhead Answer, at ¶ 113.

Steelhead pai d Jiggy a purchase price of $825,000 a t closing for s u bstantial ly all of Jiggy’s a ssets. 21 Several APA provisions an d warr anties form the b asis of the claims: • Section 2.1(d) required Jiggy to transfer to Steelhead all technology and rela ted materials as outlined in that section. 22 • Section 2.3 provides t hat Steel h ead doesn’t assume any of Jiggy’s pre -closing liabilities except for the l ist o f “Excluded Categories,” which includes “expenses... arising under Contract” and, under subdivision (j), “[a]ny Liabilities associated with debt, loans or credit facilities of Seller and/or the B usiness owing to f i nancia l institutions.” 23 • Section 4.19 warrants that Jiggy’s financial statements fairly present its financial position in accordance with generally accep t ed ac counting princi ples (“GAAP ”). 24 • Section 4.20 warrants that Jiggy “has been conducted in the ordinary course cons istent with past practices” and that no event or developm ent had occurred that could reasonably be expecte d to have a material adverse effect. 25 • Section 4.21 warrants t hat Jiggy has no liabilities, except those reflected in the b alance sheet or incurred in the ordinary course since th e ba lance-sheet dat e. 26 21 Defs.’ Opp’n, 9 (citing Amend. Compl., at ¶ 4); See generally APA. 22 APA § 2.1(d). 23 Id. § 2.3. 24 Id. § 4.19. 25 Id. § 4.20. 26 Id. § 4.21.

• Section 7.2 mandates that Jiggy k eep the APA and its terms confiden tial and prohi bits public disc l osure without consen t. 27 • Finally, the APA has an earnout provision. 28 U nde r Section 2.9(a) of t he A PA, Jiggy was eligible to receive up to three Stability Pay ments in the fi rst year post - closing if revenue met specified thresholds: (1) $100,000 if revenue exceeded $978,091.96 for the firs t four months post-closing; (2) $100,000 if re venue exceeded $575,000.41 over the next four months postclosing; and (3) $100,000 if revenue exceeded $1,870,780.59 over the 12 months post-clo s ing. 29 The APA requires the Purchaser to determine revenue attributable to the Business in good faith. 30 D. P OST -C LOSIN G I SSUES Within a month after closing, Megan Petit, Jiggy’s Head of Operations, resigned. 31 Ms. Marcotte recommended s everal marketing and product initiatives for Jiggy t hat would result in negative margins or would necessitate degrading product qua lity. 32 Also, after closing, the Defendants made several decisions that reduced 27 Id. § 7.2. 28 See id. § 2.9. 29 Id. 30 See id. §§ 2.9(a)(i) – (iii), 2.9(b)(i) – (iv). 31 Aff. of Adam Brzeczek in S upp. of Steelhead’s Mot. for Partial Summ. J. [hereinafter “ Brzeczek Aff. ”], at ¶¶ 22 – 23 (D.I. 90); See Steelhead’s Op. Br. in Supp. of Mot. for Partial Summ. J. [hereinafter “Steelhead’s Op. Br.”], at 6 (D.I. 90). 32 Brzeczek Aff., at ¶¶ 28 – 32.

Jiggy’s revenue regarding the earnout payme nt calculation. 33 Steelhead cut nearly all Jiggy marketing spend, despite it being the peak holiday shopping season and one of Jiggy’s most profita b le periods. 34 St eelhead also depriorit ized Jiggy’s Amazon channel and destroyed thousands of Jiggy units across multiple SKUs without informing Ms. Marcotte. 35 Lastly, Steelhead rejected large b rand - building o pportunitie s that J iggy had alrea d y sec ured, refused to sell certain new products, and missed l arge purchase order deadlines. 36 In t he first two years post - acquisition, Jiggy did not meet the t hresholds required for Stability and E arno ut Payments. 37 In August 2024, i n connection with revenue reviews and calculations due for the first-year earnout after the first post -clos ing y ear, the Defendants discovered dou ble- counted re v enue in J iggy’s f inancials. 38 33 Marcotte 12/8 Decl., a t ¶¶ 14 – 17; See Pl. ’s Opp ’n to Steelhead’s Mot. for P artial S umm. J. [hereinafter “Jiggy Opp’n to Steelhead”], at 18 – 30 (D.I. 105). 34 Marcotte 10/16 Tr., at 12 0; Transmittal Aff. Of Blake A. Bennett in Supp. of Pl.’s Opp’n to Aestuary’s Mot. for Summ. J. [hereainafter “Bennett Opp’n Af f.”], Ex. 10 [hereinafter “Aestuary Earnout Messages”], at SAEE01311781 (D.I. 104); Marcotte 12/8 Decl., at ¶ 15. 35 Bennett Opp’n Aff., Ex. 15 [hereinafter “Marcotte Amazon Email ” ], at SAEE01091903 (D.I. 104); Bennett Opp’n Aff., Ex. 14 [hereinafter “Inventory Email”], at SAEE_01090372 – 73 (D.I. 104); Green Aff., Ex. D [hereinafter “Brzec z ek Tr.”], at 260 (D.I. 90). 36 Marcotte 12/8 Decl., at ¶ 16. 37 See Brzeczek Aff., Exs. 2 – 5 (emails and calculations demonstrating that Jiggy did not meet the earnout threshold) (D.I. 90); see also Brzeczek Aff., at ¶¶ 3 – 6. 38 Brzeczek T r., at 163 – 164, 175; s ee Green Aff., Ex. H [hereinafter “ Steelhead Resp. ”] No. 3 (D.I. 90).

II. PARTIES’ CO N TENT I ONS Steelhead moves for summary judgment on Jiggy’s claim that Steelhead breached the earnout p rovision and Jiggy’s implied -covenant claim that Steelhead acted in bad faith to lower Jiggy’s revenues and avoid an earnout. 39 Steelhead conten d s that: (1) t here is no contract breach since there is no efforts clause; (2) t he imp l ied-covenant claim i s improperly duplicat i ve; (3) the implied covenant is inapplicable; and (4) there is no evidence of b ad faith. 40 Jiggy replies that: (1) Steelhead breached the good-faith calculation clause; (2) the implied- covenant claim isn’t duplicative; (3) the implied covenant applies when a party is given discre t ion in a contract; and (4) there i s ample e vidence of bad faith. 41 Aestuary moves for summary judgment on Jiggy’s claim that A estuar y fraudulently induced it to sign t h e APA. 42 Aestuary cla i ms that: (1) there wa s n o misrepresentati on; (2) there was no reliance; and (3) the fraud cl aim’ s damage s are identic al to the contract damages. 43 Jiggy counter s that: (1) there were misrepresentati ons; (2) Jiggy justifiably relied on these representation s; and (3) the fraud is separate and distinct from the contract claim and seeks different 39 See generally Steelhead’s Op. Br. 40 See generally id. at 8 – 35. 41 See generally Jiggy Opp’n to S teelhead, at 5 – 30. 42 See generally Aestuary Op. Br. 43 See generally id. at 9 – 24.

damages. 44 Finally, Jiggy moves for summary judgment on the Defenda nts ’ fraud counterclaim, Steelhead’s breach - of - contract countercl ai m, S teelhead’s im p lied - covenant counterclaim, and several of the Defendants’ Affirmative Defenses. 45 Jiggy’s main contentions are that: (1) no evidenc e supports the elements of fraud; (2) there are n o breache s or damages to support Stee l head’s contract counterclaim; (3) a s eparate contract governs Steelhead’s implied -covenant claim and is impermissibly based on pre-contract conduct; and (4) the affirmative defenses aren’t actual affirmative defenses. 46 The Defendants respond that: (1) there is evidence of fraud in t he f o rm o f overstated revenue in financia l statements and the claim is other wise g enuinely disputed; (2) Steelhead experienced specific damages from the breaches; (3) the separate co ntract doe sn’t bar Steelhead’s impli ed -covenant claim which is based on post -closing cond u ct; and (4) the chal l enged aff i rmative d efense s are vali d. 47 III. STANDAR D OF REVIEW This Court can grant a moving party’s motion for summary judgment under Delaware Superior Court Rule 56 only when no genuine issue of materia l 44 See generally Jiggy Opp’n to Aestuary, at 15 – 16. 45 See generally Jiggy Op. Br. 46 See generally id. at 5 – 26. 47 See generally Defs.’ Opp’n, 15 – 35.

fact exists, and the party is entitled to judgment as a matter of law. 48 Su mmary judgment “will not be granted if there is a material fact in dispute” 49 o r if “it seems d esirable to inquire thoroughly i nto [the fac ts] to clarify the application o f the l aw to the circumstances.” 50 The moving party h as the burden of demonstrating “its claim is supported by undisputed facts.” 51 If the moving p ar ty meets its burden, the b urden shifts to the non -moving party to show t here is a “genuine issue for trial.” 52 In determining whether such a genuine i ssue exists, “the Court must view the facts in the light most favorable to t hat non -moving party.” 53 “Lastly, the Court accepts as true th e par ties’ factual s t ipulatio ns.” 54 “While the Court may not be able to grant summary judgment ‘if the factual record has not been develope d thoroughly enough to allow the Court to 48 Del. Super. C t. Civ. R. 56; Options Clearing Corp. v. U.S. Specialty Ins. Co., 2021 WL 5577251, a t *7 (D el. Super. Ct. Nov. 30, 2021); Motors Liquid. Co. DI P Lenders Tr. v. Allianz Ins. Co., 2017 WL 2495417, at *5 (Del. Super. Ct. June 19, 2017). 49 Radulski v. Liberty Mut. Fire Ins. Co., 2020 WL 8676027, at *3 (Del. Super. Ct. Oct. 28, 2020); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (“Only disputes over facts th at might aff ect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.”). 50 Ebersole v. Lowengrub, 180 A.2d 467, 468 – 69 (Del. 1962). 51 Radulski, 2020 WL 8676027, at *3 (citing Moore v. Sizemore, 405 A.2d 679, 680 (Del. 1979)). 52 Del. Super. Ct. Civ. R. 56(e); CNH Indus. Am. LLC v. Am. Casualty Co. of Reading, 2015 WL 3863225, at *1 (Del. Super. C t. June 8, 2015) (“If the motion is properly supported, then the burden shifts to the non-moving party to demonstrate that there are material iss ues of fact for resolution by the ultimate fac t- finder.”). 53 Radulski, 2020 WL 8676027, at *3 (citing Judah v. Del. Tr. Co., 378 A.2d 624, 632 (Del. 1977)). 54 Id.

apply the law t o the factual record,’” 55 “a matter should be disposed of b y summary judgment whenever an issue of law is involved and a trial is unnecessary.” 56 “[W]hen an ultimate fact to b e determine d is one of motive, intention or other subjective matter, summary judgment i s ordinaril y inappropria te.” 57 Without doubt, summary judgment is encouraged, but there i s no “right” to s ummary j u dgmen t. 58 IV. DISCUSSION Th e Court fi rst addresses whether Jigg y’s claims sur vive summary judgment, and concludes that: (1) Jiggy’s earnout provision breach- of -contrac t claim fails since there is n o reasonable efforts clause in the APA’s earnout provision; (2) Jiggy’ s breach - of -the-implied-covenant cl aim survives since t here is evidence o f potential bad faith; and (3) Jiggy’s fraudulent inducement claim partially withstands summary judgment because s ome of the alleged misrepresentati ons a re s upported by eviden ce of pre-Closing fraudulent co nduct. Next, the Court considers the Defendants’ fraud counterclaims and holds 55 Id. at *4 (quoting CNH Indus. Am., 2015 WL 3863225, at *1). 56 Jeffries v. Kent C ty. Vocational Tech. Sch. Dist. Bd. of Educ., 743 A.2d 675, 677 (Del. Super. Ct. 1999); Brooke v. Elihu-Evans, 1996 WL 659491, at *2 (Del. Aug. 23, 1996). 57 Humanigen, Inc. v. Sav ant Neglected Diseases, L LC, 2021 WL 4344172, at *21 (Del. Super. Ct. Sept. 23, 2021) (quoting LVI Gp. Invs., LLC v. NCM Gp. Hldgs., LLC, 2019 WL 7369198, at *22 (Del. Ch. Dec. 31, 2019)). 58 US Dominion, Inc. v. Fox News Network, LLC, 293 A.3d 1002, 1034 (Del. S uper. Ct. 2023) (quoting T elxon Corp. v. Meyerson, 802 A.2d 257, 262 (Del. 2002) (internal quotation marks and citation omitted)).

that only Aestuary’s fraud counterclaim makes it past summ ary judgm ent as Steelhead’s frau d countercla i m is impermissibly b ootstra pped to its breach - of - contract coun terclaim. Then, the C ourt turns to St eel head’s breach - of -contract and b rea ch- of - the - implied-covena nt counterclaims and de termines t hat: (1) S t eelhea d ’s breac h - of - contract countercla i m is supported b y record evidence; but (2) certain aspects of Steelhead’s breach - of -the-implied covena nt counterclaim fail because they are largely based o n pos t-Closing conduct ex pressly covered by the APA. Finally, t he Court addresses Jiggy’s challenges to the Defenda n ts’ Affirmative Defenses, one of which i t ha s jurisdiction over, others of which aren’t “affirmative defenses” t o be labeled as such before the jury, and the remain der of which are prope r affirmat ive defenses that may b e presse d at trial. A. J IGGY ’ S C ONTINGEN T -P AYMENT B REACH - OF -C ONTRAC T C LAIM AGAINST S TEE LHEAD FAILS. 59 To p reva il on a breach- of -contract claim, one must show: (1) a contract ual obligation; (2) a breach of that obligation; and (3) resulting damages. 60 A cour t 59 Jiggy highlights that there are other alleged br eaches against Steelhead i n it s opposing brief. Jiggy Opp’n to Steelhead, 5 – 7. S teelhead only moves for summary judgment on the earnout provision breac h and not the othe r alle ged breaches. See R eply Br. in S upp. of Steelhead’s Mot. for Partial Summ. J. [hereinafter “Steelhead’s Reply Br.”], at 7 (D.I. 120) (“Steelhead Did Not Breach The Provisions Of The APA Relating To Contingent Payments.”). So only the brea ch claim relating to the Earnou t P rovision is dismissed, not the breach-of- contract claim against Steelhead in its entirety. 60 See VLIW Tech., LLC v. Hewlett-Packard, Co., 8 40 A.2d 606, 612 (Del. 2003).

generally gives pr iority to the parties’ in t entions co n tained in th e fou r corners of the contra ct. 61 “In upholding the intentions of the parties, a court must construe the ag reeme nt as a whole, giving effect to all provisions therein.” 62 “The meanin g inferred from a particular provision cannot control the meaning of the entire agreement if such an inference confl icts with t he agreement’s overall scheme or plan.” 63 “Specific language in a contract contr ols over g eneral language, and where s pecific and general provisions conflict, the specific provision ordinarily qualifies the meaning of the general one.” 64 “When construing a contract, and unless a contrary intent appears, [courts] will give words their ordinary meaning.” 65 Where t he contract’ s language is p lain and unambiguous, it must be enforced as wri tten. 66 “If a writing is plain and clear on its face, i.e., its lan g uage conveys an unmistaka ble meaning, the writing itself is t he sole source for gaining an understandi ng of inten t.” 67 61 Paul v. Deloitte & Touche, LLP, 974 A.2d 140, 145 (Del. 2009). 62 E.I. du Pont de Nemours and Co., Inc. v. Shell Oil Co., 498 A.2d 1108, 1113 (Del. 1985). 63 Riverbend Community, L LC v. Green Stone Engr., LLC, 55 A.3d 330, 334 (Del. 2012) (citation omitted). 64 Brinckerhoff v. Enbridge Energy Co., Inc., 159 A.3 d 242, 256 (Del. 2017), as revised (Mar. 28, 2017) (quoting DCV Holdings, Inc. v. ConAgra, Inc., 889 A.2d 954, 961 (Del. 2005)). 65 Cit adel Hldg. Corp. v. Roven, 603 A.2d 818, 824 (Del. 1992). 66 Loril lard Tobacco Co. v. Am. Legacy Found., 903 A.2d 728, 740 (Del. 2006). 67 Cit y Inve sting Co. Liquidating Tr. v. Cont’l Cas. Co., 624 A.2d 1191, 1198 (Del. 1993).

1. There is no efforts c lause for Ste elhead to bre a ch. Steelhead insists that Jiggy ca n not succeed on its breac h - of -c o ntract claim as the APA’s Revenue Thresholds weren’t met, and the APA doesn’t dictate how Steelhead had to operate Jiggy. 68 Jiggy responds that the APA’s Good Faith Calculation prov ision supports its claim. 69 The APA doesn’t contain a provision dictating that Steelhead engage any particular efforts in operating Jiggy — indeed, it appears th e parties left that to the new owners’ discretion. Now, APA Sect ion 2.9(a)(i) says th at Revenue attributable to Ji ggy is to be “determined by Purc haser in good f aith.” 70 But this says nothing as to how Jiggy had to be run. And that language doesn’t, in any way, govern Steelhead’s business decisions t hat might lower Jiggy’s post-sale revenue. Rather, it applies only to the actual calculation o f Rev enue to be attributed to Jiggy and what had t o be included in that calculation. Ji ggy ’s theory of breach is entirely based on decisions b efore the reven u e calculation that lowered re v enue attributable t o J iggy, no t the actual revenue calculation to see if Jiggy’s revenue met the threshol d. 71 Indeed, Section 2.10 provides the route the 68 Steelhead’s Op. Br., at 8 – 18. 69 Jiggy Opp’n to Steelhead, at 7 – 10. 70 APA § 2.9(a)(i). 71 See Jiggy Opp’n to Steelhead, at 7 – 10.

parties are t o t ake if they dispute a revenue calculation. 72 As a result, Steelhead’s motion for summary judgment is GRANTED on Jiggy’s breach - of -co ntract claim relati ng to t h e reve nue calculat i on since Jiggy doesn’t cha ll enge t he ac tual calculation, any calculation dispute h ad to be sent to the Independent Accountant via APA 2.10, 73 and there is no reasonable efforts clause in the APA for Steelhea d to breach. B. J IGGY ’ S I MPL IED -C OVENANT C LAIM AGAI NST S TEELHEAD SURVIVES. Every contract contains an implied covenant of good faith and fair dealing. The implied covenant requires “‘a party in a contractual relationship to refrain from arbitrary or unreasonable cond uct which has the effect of preventing t he other p arty to the con t ract from receiving the fruits’ of the b argain.” 74 “Beyon d its gap filling function, the implied covenant applies ‘when a party to the contract is g iven discretion to act as to a certa in subject and it is argued that t h e discretion has been used in a way that is i mplie dly proscribed by the contract ’ s express terms.’” 75 “Although contracts often grant wide— if not unfettered — d iscretion to 72 See APA § 2.10. 73 See id. § 2.10(b). 74 Dunlap v. State Farm Fire & C as. Co., 878 A.2d 434, 442 (Del. 2005) (quoting Wilgus v. Salt Pond Inv. Co., 498 A.2d 151, 159 (Del. Ch. 1985)). 75 SerVaas v. Ford Smart Mobility LLC, 2021 WL 3779559, at *10 (Del. Ch. Aug. 25, 2021) (quoting Oxbow Carbon & Mins. Hldgs., Inc. v. Crestview -Oxbow Acq., LLC, 202 A.3d 482, 504 n.93 (Del. 2019)).

one par t y, ‘the law presumes that parties never accept the risk that their counterparties will ex ercise their contractual dis cretion in ba d faith.’” 76 Courts will not infer th at an obliga t ion exists, that “contradicts a clear exercise of a n expre ss co ntractual right.” 77 Express contractual language is m ore persuasive t han a par ty’s acti ons implemen ting a contrac t. 78 Courts will i nfer a n obligation “when the express terms of the contract indicate that t he parties would have agreed to the obligation had they negotiate d the i ssue, [so] the plaintiff must advance provisions of the agreement that support t his finding in or der to allege sufficiently a specific implied contract u al obligat ion.” 79 Our Supreme Court has w arn ed that the implied covenant of good faith and fair dealing: Involves a cautious enterprise, inferring contractual t erms to handle developments or contractual gaps that the asserting party pleads neither party anticipated. One generally cannot base a claim for breach of the implied covenant on co nduct authorized by the agreeme nt. We will only imply contract terms when the party asserting the implied c ovenant proves that the other party has acted arbitrarily or unreasonably, thereby frustrating the fruits of the b arga in that the asser t ing party reasonab ly expected. 80 76 Id. 77 Nemec v. Shrader, 991 A.2d 1120, 1127 (Del. 2010). 78 Id. at 1126. 79 Cantor Fitzgerald, L.P. v. Cantor, et al., 1998 W L 842316, at *1 (Del. Ch. Nov. 10, 1998) (footnote omitted). 80 Nemec, 991 A.2d at 1125 – 26 (internal citations and quotations omitted).

The covenant will not allow mere “ post contractual rebalancing of the economic benefits flowing to the contracting parties.” 81 Rather, the covenant applies “only in that narrow band of cases where the contract as a whole speaks sufficiently t o suggest an obligation and point to a result, but does not speak directly enough to provide an explicit answer. In the Venn diagram of cont ract cases, the area of overlap is quite sma l l. ” 82 1. There is evidence allowing a r easonable juror to find tha t Steelhead acted in b ad faith when operatin g Jiggy. Steelhead maintains that the implied covenant is inapplicable as there is no contractual gap in the AP A to fill. 83 But as j u st me ntioned, the implied cov enant applies even when a party to a contract is granted unfettered discretion. Here, there is no reasona ble effo rts clause applying to how Steelhea d was to operate Jiggy after closing. So Steelhead had no limitation s and sole discretion to operate Jiggy as it saw fit. That said, Steelhead still might have breache d the implied covenant if it acted in bad faith to ensure that Jiggy wouldn’t qualify for an earnout payme n t. 84 81 Id. at 1127 – 28. 82 Airborne Health, Inc. v. Squid Soap, LP, 984 A.2d 126, 146 (Del. Ch. 2009). 83 Steelhead’s Reply Br., at 14. 84 See C ygnus Opportunity Fund, L LC v. Washington Prime Grp., L LC, 302 A.3d 430, 460 (Del. Ch. 2023) (recognizing that the implied covenant requires a party with contractual discretion to act in good faith and even contract ter ms that might enhance the level of discretion don’t necessarily eliminate the implied covenant).

Jiggy h as developed record evidence of bad faith. About four months after closing, Steelhead’s s enior leadership was communicating that they planned to make “game time decisions if the [contingenc y] triggers are too close.” 85 In t hose same messa g es, St eelhea d execut i ve Ju an Cast ellanos predicted — based on Steelhead’s o wn internal plan— that Jiggy would m iss t he earnouts. 86 Right after this exchange, S teelhead cut nearly all Jiggy marketing spend, despite it being the peak holiday shopping season and one o f Jiggy’s most profitable periods. 87 Steelhead also d eprio ritized Jiggy’s A maz o n channel and destroyed thousands of Jiggy units across multiple SKUs without informing Ms. Marcotte. 88 Lastly, Steelhead rejected large b rand-building opportunit ies that Jiggy had already secured, refused to sell certain new products, and missed large purchase order deadlines. 89 On this evidence, a juror could reasonabl y find that Steelhead concocted an internal plan to lower Jiggy’s revenues to eschew payin g an earnout payment and then followed through with that plan. A juror could interpr et the message s to mean t hat S teelhead had already decided tha t Jiggy was n’t going to get the 85 Aestuary Earnout Messages, at SAEE01311779. 86 Id. 87 Marcotte 10/16 Tr., at 120; Aestuary Earnout Messages, at SAEE01311781. 88 Marcotte Amazon Email, at S AEE01091903; Inventory Email, at SAEE 01090372 – 73; Brzeczek Tr., at 260. 89 Marcotte 12/8 Decl., at ¶ 16.

earnout due to the plan to cu t Jiggy’s revenues and avoid an earnout payment. True, it ’s not an automatic breach of the implied cove nant f or Steelhead to make decisions that dim inish Jiggy’ s profits. This is so even if these decisio ns significantly hindere d Jiggy’s profits, provided they were n ot done in bad faith with the intent to evade an earnout payment. But at th e summary judgment stage, it is not the Court’s place to weigh evidence and see if Steelhea d has something more compelling to support its asserti o n that it was j u st making reasonab le business decisions un motivated by bad faith. Therefore, Steelhead’s motion for summary judgm ent on Jiggy’s implied -covenant claim i s DENIED. C. J IGGY ’ S F RAUDULENT I NDUCEMENT C LAIM SURVIVES. Fraud consists o f the following elem ents: (1) a false representa t ion, usually one of fact, made by the defendant; (2) the defendant’s knowledge or belief that the representation was false, or was made with reckless indifference to t he truth; (3) an intent to induce the plaintiff to act or to refrain from acting; (4) the plaintiff’ s action or inaction taken in justifiable relia n ce upon the representatio n; and (5) damage t o the pl aintiff a s a result of such relian ce. 90 There is no elemental difference between fraud and fraud i n the inducement. 91 Aestuary moves for summary judgment on Jiggy’s fraudulent induceme nt 90 Stephenson v. Capano Dev., Inc., 462 A.2d 1069, 1074 (Del. 1983) (cleaned up). 91 Trif ecta Multimedia Holdings Inc. v. WCG Clinical Servs. LL C, 318 A.3d 450, 463 n.34 (Del. Ch. 2024).

claim. 92 1. The statements Jiggy complain s of are not solely su pported by post-closing actions and may be mi srepresent ations that c an support a fraudule nt inducement claim. Aestuary first attacks the fraudulent inducement claim by arguing that there was no mi srepresentatio n to support the first element o f fraud. 93 Again, the statements are that: (a) Aestuary had significant cash reserves on hand; (b) Aestuary’s equity i nvestor s had committed sufficient capital to grow its portfolio companie s, including Jiggy; (c) Aestuary had the financial and human resources to expand Jiggy’s operations; and (d) A estuary intended to deploy its marketing, supply c hain, and op erations e xpertise to v i rtual ly guaran tee it would grow Jiggy’s re venue by at least ten percent. 94 As for the fi rst three statements, Aestuary submits that they are v ague, subjective, and true. 95 But a s tateme n t that overstates a party’s present wealth can co nstitute a misrepre s entatio n. 96 A nd Ji ggy points to evidence of A estuar y’s 92 See generally Aestuary Op. Br. 93 Aestuary Op. Br., at 9 – 16. 94 Aestuary’s Op. Br., at 1 (citing Amend. Compl., ¶¶ 2, 31, 128); Marcotte 12/8 Decl., at ¶¶ 5 – 6; Marcotte 10/14 Tr., at 56 – 57; Marcotte 10/16 Tr., at 55 – 56; Brzeczek Tr., at 136 – 141. 95 Aestuary Op. Br., at 10 – 12. 96 See T rascent Mgmt. Consulti ng, LLC v. Bouri, 2018 WL 4293359, at *16 (Del. C h. Sept. 10, 2018) (holding that state ments that give the impression of considerable wealth is a misrepresentation).

significant pre-closing cash flow problems. 97 There is al so evidence that Aestuary knew pre -closi n g that it would not h ave the human resources to grow Jiggy after the deal w ent through. 98 The statement of having sufficient cash on hand could give a false impression as to the true state of affairs. 99 What’s more, whether Aestuary did o r did not have significant cash on hand is genuinely disputed by the p arties. 100 These first t hree statements can b e deemed misrepresentati ons — supported by co n tempora neous facts of k nowledge of falsity — that ca n buttress a fra udulent inducement claim. The fourth statement is a mu ch closer cal l. A estuary represented that it could and would deploy i ts resources t o virtually guarantee t he e arnout paymen t. No doubt, optimistic statements p raising skills, experience, and resources are 97 Bennett Opp’n Aff., Ex. 6, at SAEE01077813 (“The emergency cashflow management process worked... it got everyone on the same page about how we needed to man age cas h and extended runway long enough to get the Jiggy money through the door.”) (D.I. 104); id., Ex. 7, at SAEE01077734 (“[Ms. Marcotte] may be thinking she should just hold onto the business or [something]”... “Ye ah but we can’t let her think that otherwise we’re fucked haha”); id., Ex. 9, at S AEE01077781 (“we got [the] LOI signed for Jiggy Puzzles and were able to draw more than we needed for the deal, so we will be able to survive this year”). 98 Id., Ex. 9, at SAEE01077781 (Pre-closing messages showing that Aestuary knew it was “going through an exercise to make cuts and go bare bones to try and maintain revenue,” an exercise that “has growth implications” and included measure s for “reducing costs” and “running [the ] te am lean.”). It can be inferred from these messages that Aestuary then knew it was going to significantly cut it s staff pre -closing and would not have the hu man capital needed to grow Jiggy. 99 See Norton v. Poplos, 443 A.2d 1, 5 (Del. 1982) (“a statement or assertion... may constitute an actionable misrepresentation if it causes a false impression as to the true state of affairs.”). 100 Compare Aestuary Op. Br., at 10 – 12 with Jiggy Opp’n to Aestuary, at 14 – 17.

mere puffery that cannot form t he basis of a fraud claim. 101 And fraudule nt inducement generally req uires a misrepresentation of present facts rather than a statement o f future intent. 102 But one might state a cl aim “by showing that the defendant had an actual present int ent not to perform [] its promises.” 103 Here, Jiggy cites evidence it suggests shows Aestuary had no intenti o n to use its resources to obtain the revenue needed for an earnout payment. 104 But thi s evidence is all post-closing. 105 Delaware cou rts generally require so methi ng more than post-closing non -perfor mance to justify an inference o f wrongful intent to sup p ort a cla im of fraud. 106 101 Trifec ta Multimedia Hld gs., 318 A.3d at 463 (citing Solow v. Asp ect Res., LLC, 2004 WL 2694916, at *3 (Del. Ch. Oct. 19, 2004)). 102 Ce rcacor Labs., Inc. v. Metronom Health, Inc., 2025 WL 1180186, at *9 (Del. Super. Ct. Apr. 23, 2025). 103 Id. at *9 (quoting CRE Niagara Holdings, LL C v. Resort Grp., Inc., 2022 WL 1749181, at *14 (Del. Super. Ct. May 31, 2022)). 104 Se e Jiggy Opp’n to Aestuary, at 21 – 22 (citing to post-c losing evidence of Aestuary predicting that the revenue amount to trigger an earnout wouldn’t be m et and making several decisions that lowered revenue). 105 Ae stuary int ernally predi cted after closing that Jiggy would not hit the earnout for 2024, 2026, or 2027 —a nd was willing to make “game time dec isions as nee ded if the triggers are too close.” Aestuary Ea rnout Messages, at SAEE01311779; After closing, Aestuary cut nearly all paid marketing during the fourth quarter — Jiggy’s most consequential growth period— causing a 21% decline in year-ov er-year revenue. Aestuary E arnout Messages, at SAEE01311780 – 81; Marcotte 12/8 Decl., at ¶ 15; Also, after closing, Aestuary d estroyed much of the inventory relevant to the Inventory P ayments without telling Ms. Marcotte. Inventory Email, at SAEE_01090372 – 74; Brzeczek Tr., at 260. 106 M urphy v. Godwin, 303 A.2d 668, 673 (Del. S uper. Ct. 1973); see also Osram Sylvania Inc. v. Townsend Ventures, LLC, 2013 WL 6199554, at *16 (Del. Ch. Nov. 19, 2013) (“A claim improperly based on hindsight attempts to infer fraudulent intent based so lely on subsequent activity.”); In re En core Compute r Corp. S’holders Litig., 2000 WL 823373, at *8 – 9 (D el. Ch. June 16, 2000) (declining to infer pre -closing intent based solely on post -closing actions);

That said, the Court of Chancery recently allowed a fraud claim that w as based on post-transaction act i ons to survive the motion- to -dismiss stage. 107 And while this i s t he summary -judgme nt stage, and the Defendant’s s uggest Jiggy’s only evidence to support the scienter behind the “virt ual guarantee” statement is exclusively post-closing, this is not th e “classic ‘fraud by hindsight’” with “an absence of any contemp oraneous facts permitting an inference of falsity or bad faith.” 108 Rather, when placed in context of that just outlined, t he “virtual guarantee” s tatement, too, is properly supported by evidence of then-existing falsity and int ent. 109 2. The integration clau se doesn’t bar rel iance, and justifiable reliance is a qu estion for tr i al. Aestuary next conten d s that t he APA’s reliance clause bar s any j ustifiable reliance by M s. Marcotte. 110 Delaware law requires specific and u nambiguo us Sanders v. Devine, 1997 WL 599539, at *9 (Del. Ch. Sept. 24, 1997) (declining to infer fraudulent intent as o f the date shares we re issued s olely because those shares later were cashed out by the issuer). 107 Trifec ta Multimedia Holdings Inc. v. WCG Clinical Servs. LLC, 318 A.3d 450, 465 (Del. Ch. 2024). 108 M ooney v. E. I. du Pont de Nemours & Co., 2017 WL 5713308, at *6 (Del. Super. Ct. Nov. 28, 2017), aff’d, 192 A.3d 557 (Del. 2018); see also Noerr v. Greenwood, 1997 WL 419633, at *4 –5 (D el. Ch. July 16, 1997) (discussing f ederal and state authority and rejecting “‘fraud by hindsight’” allegations). 109 Cf. Stein v. Wind Energy Holdings, Inc., 2022 WL 17590862, at *7 (Del. Super. Ct. Dec. 13, 2022) (“A party cannot plead an intent to defra ud using subseque nt reversals absent contemporaneous facts supporting a reasonable inference that the d efendant knew the future reversal would happen.”) (emphasis added). 110 Ae stuary Op. Br., at 17 – 18.

anti-reliance languag e to p reclude a fraudulent inducement claim premised on defendant’s p re - contr act statemen t s, since the plaintiff can’t plead justifiable reliance on extracontrac tual statements when they prom i sed not to rely on them. 111 But an integration clause without anti - reliance language doesn’t do the same. 112 Here, the APA’s integration clause provides that i t “constitute[s] the entire agreement between the Parties... an d supersede[s] all prior agreements and understanding s both written and oral, between the Parties with respect to the subject matter hereof.” 113 This is a standard integration clause without specific anti- reliance language, and it doesn’t bar cl aims of justifiable reliance. In fact, the APA’s integration clause is almost identical to the integration clause in Park7 Student Housi ng, LLC v. PR III/Park7 SH Holdin gs, LLC, where the Court of Chancery held t hat this language lacked an antire l iance pr o vision t h at bar s fraud claims. 114 Moreover, questions o f knowle dge or intent are fact-intensive, and courts 111 Park 7 Student Hous., LL C v. PR III/Park7 SH Hol dings, LLC, 340 A.3d 614, 618 (Del. C h. 2025). 112 Id. 113 AP A § 10.4. 114 Se e Park7, 340 A.3d at 617 n.10 (“This Agreement supersedes all prior agree ments between the Pa rties with respect to the subject hereof and all discussions, understandings, offers, and negotiations with respec t thereto, whether oral or written.”).

ordinarily shouldn’t resolve these questions on summary judgment. 115 Aestuar y posits t hat Ms. Mar cotte didn’t justifiably rely on anything because she relied on DBD and was a sophisticated party that could have asked questions to verif y Aestuary’s represe n tations. 116 Jiggy cites evidence that Ms. Marcotte relie d on Aestuary’s rep resenta tions, not DBD’s. 117 Indeed, Aestuary may have a strong case that there was no justifiable reliance. But the reasonableness of a p arty’s reliance is generally a question of fact that cannot be determined on summary judgment. 118 Accordingly, the issue of justifiable reliance is a question for the jury at trial. 3. Jiggy’s fraud claim isn’t b oo tstr apped and seek s damages different than its br ea ch- of - co ntra ct claim. Lastly, Ae stuary attacks Jiggy’s frau d claim with t he bootstra p doctrine, averring that t he facts are the same and the damage s sought are identical. 119 When distingui shing fraud from breach - of -contra ct claims, the Court generally looks to the timing o f the alleged misconduct to de termine whether the 115 Columbus Life Ins., Co. v. Wilmington Tr. Co., 2023 WL 1956868, at *8 (Del. Super. Ct. Feb. 13, 2023). 116 Ae stuary Op. Br., 18 – 20. 117 Ma rcotte 10/14 T r. 253: 2 – 12 (the virtual guara ntee made Ms. Marcotte “ much more comfortable with the terms of the deal ” and “changed the posture of negotiating”). 118 Columbus Life, 2023 WL 1956868, a t *11. 119 Ae stuary Op. Br., at 20 – 23.

inducement to dea l is “separat e and distinct” from the induceme nt to perform. 120 In fact, Aestuary’s brief does a good job of delineating these claims. Jiggy’s remaining fraud allegation is that Aestuary made s everal false representation s that induced Jiggy t o enter into the A PA. 121 While its contract claim, agains t Steelhead on ly, is tha t “Stee l head breac hed the APA i n severa l ways, including ... failing to take actions, designed to and with the intent of decreasing o r avoiding payment of the Contingen t Payments.” 122 The Aestuary claim i nvolves the inducement to deal, while the Steelhead claim is the actual post-closing breaches of the contract to which it is a party. Aestuary isn ’t a party to the APA. Thus, the facts under lying these claim s differ, and there i s no bootstrapping. The fraud claim also seeks different d amages. The fraud damages reflect the value Jiggy was actually worth at the time o f the sale based on what it was promised, whereas the contrac t d amages arise from the APA’s Contingen t Payments and distinct breaches after closing. 123 As such, there i s no bootstrap 120 Surf’s Up Legacy Partners, LLC v. Virgin Fest, LLC, 2021 WL 117036, at *16 (Del. Super. Ct. Jan. 13, 2021) (quoting EZLinks Golf, LLC v. PCMS Datafit, Inc., 20 17 WL 1312209, at *5 (Del. Super. Ct. Mar. 13, 2017)). 121 Amend. Compl., at ¶¶ 128 – 130. 122 Aestuary Op. Br., at 21 (quoting Amend. Compl., at ¶ 115). 123 Compare Amend. Compl., at ¶ 111 (“Defendants succ essfully defrauded JIGGY to acquire the company for a fraction of what it was worth to obtain financing, then di smantled it in bad faith to mi nimize the success of Steelhead and JIGGY, and any p ayments, under the APA.”) with Amend. Compl., at ¶¶ 53 – 59 (alleging breach by Steelhead for failing to deliver Closi ng Inventory Statement after closing date and failing to pay Inventory Payments).

issue with Jiggy’s fraud claim. 124 A nd Aestuary only seeks summary judgmen t on th e fraud claim. 125 So Aestuary’s Motion for Summary Judgment is DENIED. D. W HILE THERE ARE GENUINELY DISPUT ED MATERIAL FACTS REGARDING S TEELHEAD ’ S F RAUD C OUNTERC LAIM, IT SEEKS DA MAGES IDEN TICAL TO THE B REACH - OF -C ONTRA CT C OUNTERCLAIM. In addition to overt misrepresentations, “ fraud also may o ccur through deliberate co n cealment of material facts, or by silence in the face of a du ty to speak.” 126 1. The Court cannot now decide w hether Ms. Marcotte knew or was recklessly ind i fferent t o whether the financi al statement s were inaccurate. Jiggy argues that the s econd fraud element isn’t satisfied since Ms. Marcotte relie d on third-party advisors to create the at -issue financial reports. 127 So, says Jiggy, Ms. Marcotte couldn’t have known if the financi al s tatement s were inaccura te. 128 Again, questions of k nowled ge or intent are fact -intensi v e, and court s ordinarily shouldn’t resolve these question s on a motion for summary 124 Aestuary also says that the economic loss doctrine applies. Aestuary Op. Br., 23 – 24. But the doctrine doesn’t prohibit recovery if the fraud allegations go directly to the inducement of the contract and not the performance. Abbott L abs. v. Owens, 2014 WL 8407613, at *7 (Del. Super. Ct. Sept. 15, 2014). 125 See generally Aestuary Op. Br. 126 Se e Vichi v. Koninklij ke Philips Elecs., N.V., 85 A.3d 725, 773 – 74 (Del. Ch. 2014). 127 Jiggy Op. Br., at 7. 128 Id.

judgment. 129 And there is evidenc e that Ms. Marcotte directly participated in and helped prepare the revenue figures. 130 The D efenda n ts highlight that Ms. Marcotte review ed and revi sed the spread sheets. 131 Too, Ms. Mar co tte pr ovide d the financial books and records that DBD used to create t he reports. 132 Jiggy’s contention that Ms. Marcotte couldn’t have known of the issues in the statements creates a genui n e dispute o f mater ial fact ripe for t rial on t he me rits. It is n ot permissible for the tri al judge... to weigh the evidence or to resol ve conflicts ar ising from pre trial documents, affida vits, depositions or other evidence. That is the job o f the trier of fact (whether it is to b e a bench trial or a jury t rial) after hearing all the ev idence, including live witness testimony t h at, as here, ma y be in conf lict. This is an axiom of the judicial process and applies unless the p arties have stipulated t hat the paper record shall constitute the trial record. 133 Thus, the Court cannot r esolve this conflicting evidence; there r emains a g enuine dispute over Ms. Mar co tte’s kno wledge, which p rohibits su mma ry judgmen t. 2. The Court cannot now decide w hether Defendants’ relianc e was justifiable. Jiggy also targets the fact that the Defendants knew about some of the 129 Columbus Life, 2023 WL 1956868, a t *8. 130 De fs.’ Opp’n, at 17. 131 Ma rcotte 10/21 Tr., at 312 – 315. 132 Ma rcotte 11/7 Decl., at ¶ 8. 133 Ce rberus Int’l, Ltd. v. Apollo Mgmt., L.P., 794 A.2d 1141, 1149 (Del. 2002) (citations omitted).

double-counting. 134 Because of this, Jiggy con t ends that there can be n o justifiable reli ance by t he D efendant s to make out the fourth fraud element. 135 The Defendants respond that they didn’t know the extent of t he overstated revenues. 136 “[W]hether one’s reliance was reasonab l e generally is a questio n of fact that cannot be determined on summary judgment.” 137 But whether reliance is justified is an objective test. 138 And “[t] o establish justifi able reliance, [a plaintiff] must demonstrate he did not have either the awareness or opportunity to discover t he accura te informatio n.” 139 Here, when the Defendants discovered problems with the reports, they disclosed them to Ms. Marcott e and DBD and worked with Ms. Marcotte to fix them. 140 According to the D efenda n ts, t hey only dis co vered the full exten t of t he double counti ng in August 2 024. 141 Conversely, Jigg y highli g hts evide nce 134 Jiggy Op. Br., at 7 – 8. 135 Id. at 7 – 12. 136 De fs.’ Opp’n,, at 20. 137 Vague v. Bank One Corp., 2004 WL 1202043, at *1 (Del. May 20, 2004) (citing Wilm. Tr. Co. v. Aetna Cas. & Sur. Co., 690 A.2d 914, 916 (Del. 1996)). 138 Arwood v. AW Site Servs., LLC, 2022 WL 705841, at *23 (Del. Ch. Mar. 9, 2022). 139 Edinburgh Holdings, Inc. v. Educ. Affiliates, Inc., 2 018 WL 2727542, at *12 (Del. Ch. June 6, 2018) (quoting Tekstrom, Inc. v. Savla, 2006 WL 2338050, at *11 (Del. Super. Ct. July 31, 2006)). 140 De fs.’ Opp’n, at 20. 141 Brz eczek Tr., at 163 – 164, 166 – 168, 175.

suggesting that the Defendants knew the full ext en t of the misreporting. 142 Ag ai n, this conflicting evidence creates a dispute of fact that prevents summar y judgment. 3. But Steelhead’s fraud countercla i m seeks iden tical damag es to its breach- of -c o ntract counter claim and i s based on identical facts. Jiggy asserts that Steelhead’s fraud countercla im fails as it seeks identical damages to the breach- of - contract counterclaim and the counterclaim doesn’t seek recessionary damages. 143 The Defenda nts reply that the fraud damages are disputed, so s u mmary judgme nt is inapplicable. 144 To p lead a fraud claim successfully, the alleged ly d efraude d plaintiff mu st have sustained damages as a result of a defendant’ s action. 145 The damages allegations can’t rehash the damages allegedly caused by breach of contract. 146 142 Jiggy Op. Br., 9 – 12 (citing to messages showing t hat the Defendants kne w of the extent of the accounting issues before closing); see, e.g., Bennett Op. Aff., Ex. 10, at SAEE01077852 (“i dont think they are lying, i think they did some shady adjustments we need to unravel”); id., Ex. 11, at SAEE01077871 (“I don’t want to put [Jiggy] onto their numbers being wrong”); id., Ex. 16, at SAEE01109614 (“these numbers are super off from the financials” . .. “We’ll talk with the accountants who maintain qbo tomorrow to see what is going on... But goo d lord that’s not close ... This p&l is not helpful at all”); id., Ex. 12, at SAEE01092189 (“dbd’s [P&L] is shit, i dont think we should use it”). 143 Jiggy Op. Br., at 12, 15 – 16; P l. Jiggy Puzzles, LLC’s Reply Br. in Further S upp. of its Mot. for Partial Summ. J.[hereinafter “Jiggy Reply”], at 10 – 12 (D.I. 118). 144 Defs.’ Opp’n, 23. 145 Novipax Holdings LLC v. Sealed Air Corp., 20 17 WL 5713307, at *14 (Del. Super. Ct. Nov. 28, 2017) (c iting ITW Glob. Invest. Inc. v. Am. Indus. Partners Cap. Fund IV, L.P., 2015 WL 3970908, at *5 (Del. Super. Ct. Jun. 24, 2015)). 146 Id.

Moreover, one cannot “bootstrap a cl aim of b reach of contract into a claim for fraud by alleging that a contracting party never intended to perform it s obligations.” 147 In other words, a p laintiff canno t adequately state a fraud cla im merely by add ing the term “fraudu l ently induced” to a breach - of -co ntract claim. 148 And Delaware law requires that a frau d cl aim plead qualitative ly different d amages — s uch as rescission or r escissory damage s — reflect i ng a harm independent of the contractual expectancy; absent such distinct d amages, a fraud claim impermissibly bootstraps the br each- of -co ntract claim and cannot move forward. 149 Here, Steelhead’s fraud counterclaim s eeks n either recessio n ary nor punitive damages to differentiate the fraud damages from the breach- of -co ntract damages. 150 On top o f that, the fraud counterclaim merely overlaps its breach- of -contract c ounterclaim. 147 Id. (quoting Narrowstep, Inc. v. Onstream Medi a Corp., 2010 WL 5422405, at *15 (D el. Ch. Dec. 22, 2010)). 148 Id. 149 Se e, e.g., Firmenich Inc. v. Nat. Flavors, Inc., 2020 WL 1816191, at *6 – 9 (Del. Super. C t. Apr. 7, 2020). In Firmenich, this Court rea ffirmed that a fraud claim ca nnot proc eed a longs ide a breach-of-contract claim where the plaintiff fails to plead damages distinct from contract damages. Relying on EZLinks, the Court explained that failure to plead separate fraud damages is an independent ground for dismissal and that a request fo r punitive damages alone is not a separate injury. Id. at *5. By contrast, the court acknowledged that ITW Global Investments Inc. and Novipax Holding s LLC recognize that rescission or rescissory damages can distinguish fraud damages from contract dama ges where such relief is actually sought. Id. at *6 – 8. 150 See generally Steelhead’s Countercl., at 82 – 85.

In its fraud counterclaim, Steelhead avers that “[p]rior to the acquisition, Jiggy int entio n ally concealed and misrepresented its true revenue i n order to induce Steelhead’s reliance and ensure that Steelhead bought the Jiggy business,” and “[p]rior to the ac quisition, Jiggy inte ntionally conceale d and misrepre s ented its pre-existing debts, liabilities, and other operational problems in order to induce Steelhead’s reliance and ensure that Steelhead bought the Jiggy business.” 151 Similarly, the breach - of - contract counterclaim concerns t he APA’ s representation s and w arranti es, and alleges that “Jiggy breached section 4.21 o f the APA through its non -disclosure of pre- existing liabilities and d ebts,” and “Jiggy b reached section 4.19 of t he APA through its failure to provide financial documentatio n accordin g to Generally Accepted A cco unting Principles.” 152 And more, the breach- of - contract counterclaim s ays that “J iggy b reac hed section 4.20 of the APA by failing to conduct its business in the ordinary course, consistent with past practices — specifical ly, shortly before the closing, Jiggy decreased marketing expenditures and artificially accelera t ed sales to inflate revenue, boost the appearance of profitability, and per s onally b enefit Ms. Marcotte.” 153 So precisely the same facts undergird the breach- of -the-re presentation s 151 Id., at ¶¶ 97 – 98; see also Brzeczek Tr., at 163 – 164. 152 Id., at ¶¶ 92 – 93. 153 Id., at ¶ 90.

and the fraud- in -the-inducement counterclaims with no difference in damages pled or sought. 154 Accordingly, Steelhead’s fraud counterclaim simply s ounds in contract. It is impermissibly bootstrap p ed onto St eelhea d ’s br each- of -co ntract counterclaim. Summ ary judgment is GRANTED on Jiggy ’s Motion for Summary Jud gment on Steelhea d’s Counterclaim C ount II (Fraud). 4. Aestuary’s sole fraud counte rclaim survives sinc e A estu ary doesn’t assert a breach - of -contr a ct cl aim. Aestuary’s sole countercla i m is fraud. 155 So there is no b ootstra p ping issue for Aestuary. 156 And there remain s a genuine disp ute as to mate rial facts that prevents judgment on this counterclaim as a matter of law. Therefore, Jiggy’s Motion for Summ ary Jud g ment on Aestuary’s C ounterclaim is DENIED. E. S TEEL H EAD ’ S B REACH - OF -C O NTRA CT C OUNTERCLAIM SUR VIVES. Jiggy moves for summary judgment on Steelhead’s breach - of -contra ct counterclaim since the elements of a breach- of -contract claim fail as a matter of 154 The standard remedy for breach of contract is expectation damages that would “put the promisee in the same pos ition as if the promisor h ad performed under th e c ontract.” Duncan v. Theratx, Inc., 775 A.2d 1019, 1022 (Del. 2001). And Steelhead’s fraud counterclaim seeks these same damages. 155 Se e Aestuary ’s C ountercl., at ¶¶ 54 – 59. 156 Se e Levy Fam. Inv’rs, LLC v. Oars + Alps LLC, 2 022 WL 245543, a t *8 (Del. Ch. Jan. 27, 2022) (“Thus, th e a nti -bootstrapping rule does not prevent parties from bringing a fraud claim if . . . there is no breach claim on which to bootstrap the fraud claim.”) (quotations omitted).

law. 157 Jiggy attacks ea ch alleged breach in p iecemeal fa shion. 158 To p reva il on a breach- of -contract claim, one must show: (1) a contract ual obligation; (2) a breach of t hat obligation; an d (3) resulting damages. 159 The plaintiff must establish an “express contractual obligation that was breached” to proceed on a breac h - of -c o ntract c l aim. 160 1. The re is evidence to support the APA § 2.1(d) c o unterclaim. APA Section 2.1(d) provides that Seller “shall sell, convey, assign, transfer and deliver or cause to be delivered, to Purchaser... all Transferred Technology, which, for the a voidance of doubt, includes without limitation the Technology set fo rth on Sc h edule 2.1(d). ” 161 Sch edule 2.1(d) includes JTB Custom Software for on -demand printing, all Jigg y puzzle specificat ions, all J iggy r igid box specification s, all Jiggy product specificatio n s, and all Jiggy template CAD files. 162 Steelhead contends that it didn’t receive certain puzzle dye desig n files, large items on the Kay Accounts sheet, or control over Jiggy’s Google Ads and Stripe accounts, an d there are te xt messages and emails to support this. 163 157 Jiggy Op. Br., 16 – 21. 158 Id. 159 See VLIW Tech., LLC v. Hewlett-Packard, Co., 840 A.2d 606, 612 (Del. 2003). 160 Talkdesk, Inc. v. DM Trans, LLC, 2024 WL 2799307, a t *4 (Del. Super. C t. May 31, 2024) (quoting Wal-Mart Stores, Inc. v. AIG Life Ins. Co., 901 A.2d 106, 116 (Del. 2006)). 161 APA § 2.1(d). 162 APA Schedule 2.1(d). 163 Cumings Opp’n Af f., Ex. 17 [he reinafter “Account Sheet Texts”] at SAEE_01093372; id.,

While Jiggy points to things that may weaken the Steelhead ’ s evidence, the Court does not weigh extant evidence at summary judgment. 164 T he partie s have not stipulated that the paper re co rd constit utes the trial record. So the C o urt is not licensed to determine which party’s evidence is more credible o r persuasive at this point. 165 In addition, Steelhead ha s identified damages stemming from this breach. 166 Steelhead asserts that, b ecause of these missing items, i t was fo rced to reverse-engineer specifica t ions, rebuild documentatio n from s cratch, and commission new puzzle dies at its own expense — only to receive the underly i ng materials weeks later, after the new dies had already been produced, causing product-consiste nc y risk s and unnece s sary capital o u tlays. 167 The re is als o documentatio n underpinning damages. 168 Because there is evidence to s uppor t the each contrac t -breach eleme nt, that counterclaim of Stee lh ea d’s survives. Ex. 18A – C [hereinafter “Google Ads Texts”] at JIGGY002710 – 12 (D.I. 106); See generally id., Ex. 14 [hereinafter “Sample Feedback Emails”]. 164 Se e Jiggy Reply, at 13 – 1 5. 165 Ce rberus, 794 A.2d at 1149. 166 Defs.’ Opp’n, at 24 – 25. 167 See generally Sample Feedback Emails. 168 See, e.g., Google Ads Texts (“ADs have stopp ed running bc we don’t hav e proper access and can’t update billing.”).

1. There is evidence to support the APA §§ 2.3, 4.19, 4.20, and 4.21 counterclaims. Jiggy similarly attacks th ese b reac h - of -c ontract counterclaims saying there is neither a breac h nor damages. 169 APA Sect ion 4.1 9 rep resents tha t Jiggy’s financial records “fairly present, in conf o rmity with G AAP a p plied on a co n sistent basis . .. the financial p osition of [Jiggy].” 170 Section 4.20 warrants t hat Jiggy ’s business “has been conducte d in th e ordinary course consistent w ith best p ractices and there has not been any event, occurrence or development that h as had, or could reasonably be expect ed to have, individually o r in the aggregate, a Mat eria l Adverse Effect.” 171 And Section 4.21 s ubmits that “[t]here are no Liabilities with respec t to the Business or the Purchased Assets of any kind whatsoever, whether accrued, contingent, absolute, determined, d etermina ble or otherwise, and there is no existing condition, situation or set o f circumstances which could reasonably be expected to result in such Liability...” with specific carve -outs. 172 A bsent list ed exceptions in t he AP A, Steelhead didn’t assume a ny Liability. 173 Like the fraud counterclaims that are identical to these b reac h - of -contract 169 Jiggy Op. Br., at 18 – 21. 170 APA § 4.19. 171 Id. § 4.20. 172 Id. § 4.21. 173 Id. § 2.3.

counterclaim s, there are dispute d material facts that prevent summar y judgment. First, there is evidence to corroborate that the financial statements did not fairly present the business, as there was double-counting an d Steelh ead discovered the full extent of this in August 2024. 174 On that same note, Steelhead points to evidence that the business wasn’t conducted in the ordinary course because Jiggy reduced marketing spending and accele rat ed billing and collec tion before closing. 175 Th is caused a drop in B2B revenu e after closing. 176 And after closin g, Steelhead discover ed approximately $20,000 in u npaid ar tist royalties an d additional outstanding pre-closing vendor invoices — total ing r oughly $ 50,000 — that had not been disclosed during diligence. 177 So there i s ev idence of b reache s of these contrac t prov i sions. Steelhead identifies damages from these breaches in the form of product- consistency risks, unnecessary capital delays, B2 B revenue drops, damage to vendor relationships, unexpected cash-flow burde ns, paid invoices, and fi n ancial damages. 178 There is a cap ital report showing that, after closing, there w ere 174 Brzeczek Tr., at 163 – 164, 175. 175 Cumings Opp’n Aff., Ex. 16 [hereinafter “ Freshbooks Jiggy Invoices August 2023”]; id., Ex. 19 [hereinafter “Monthly Meta Spend”]. 176 See F reshbooks Jiggy Invoices August 2023 (sh owing that Jiggy issued invoices on the two days before closing and collected from large B2B customers). 177 Cumings Opp’n Aff. Opp ’n, Ex s. 15A – B [hereinafter “Closing Working Ca pital R eport”]. 178 Se e Defs.’ Opp’n, at 23 – 26; Brzeczek Aff., at ¶¶ 7 – 8 and Ex. 6; Cumings Opp’n Aff., Ex. 20.

unpaid artist royalt ies incurred before closing, as well as roughly $50,000 i n further undisclo sed pre-closing o b ligation s. 179 The issue of d amag es is typically left for the jury. 180 Any unexcuse d failure to perform a contract is a legal wrong. 181 And i f one “suffi ciently pleads facts which, if t rue, sho w t he ‘existence’ of damages, arg uments as to the ‘amount’ of dama ges do not justify grantin g summary judgment.” 182 3. There is evid ence to support t he APA § 7.2 counterclaim. Likewise, there is evidence supporting the counterclaim for breach of the APA confidentiality provision. Sectio n 7.2 p rohibits Jiggy from directly or indirectly issuing any statemen t to a third party regarding the existence of the APA. 183 That notwithstanding, Jiggy publicly f iled its compla i nt on October 1 7, 2024, and a t tached an unredacted copy o f the APA. 184 And Stee l head insists that this public disclosure materially harmed its ability to negotiate future acquisit i ons 179 Se e Closi ng Working Capital Report. 180 Ce rcacor Labs., 2025 WL 1180186, at *14. 181 M edlink Health Sols., LLC v. JL Kaya, Inc., 2024 WL 1192781, at *6 (Del. Super. Ct. Mar. 20, 2024). 182 LG Elecs. Inc. v. Inventi on Inv. Fund I, L.P., 2024 WL 4675050, at *6 (Del. Super. Ct. Sept. 25, 2024) (quoting Medlink Health Sols., 2024 WL 1192781, at *5); see also Torrent Pharma, Inc. v. Priority Healthcare Distrib., Inc., 2022 WL 3272421, at *13 (Del. Super. Ct. Aug. 11, 2022) (recognizing that Delaware courts genera ll y make the wrongdoer bear the risk of uncertainty in d amages calculation and may infer nominal d amages from a contractual injury). 183 APA § 7.2(b). 184 D.I. 1.

because counterparties could then (and presumably now) examine specific terms, pricing struct ures, and previo us concessio n s. 185 Jiggy maintains t hat t his claim fai ls for l ack of dama ges and cites Kronenberg v. K atz. 186 Not so. There, t he cou n tercl ai mants c ontended that the plaintiffs breached a confidentialit y provision by filing a public la w suit that named the counterclaima nts. 187 The Court dismissed the claim at s umma ry judgment because “[a]t no time during the course of this litigation [have the counterclaima nts] pointed to specific portions of the record that contain specific proprietary information or sens i tive pe rsonal inf ormat ion tha t would justify sealing particular portions of the record, much less i ndicate d how the mere fact of this busine ss dispute itself c an be c oncealed from the publ ic.” 188 Here, Steelhead highlights the commercial sensitivity o f the APA for bargaining purposes, which could justify sealing portions of it. 189 In fact, the Court has allowed filings under seal in this case after Jiggy publicly filed its initial 185 Defs.’ Opp’n, 29. 186 872 A.2d 568 (Del. Ch. 2 004). 187 Krone nberg, 872 A.2d at 575. 188 Id. 189 Defs.’ Opp’n, 29.

complaint. 190 This was missing from Kronenberg. 191 Accordingly, Steelhead ha s identified a breach and damages flowing from that b reac h. Jiggy’s Motion for Summary Judgment on Steelhead’s Counterclaim Count I (Breach of Contrac t) is DE N IED. F. A L EANER VERSION OF S TEE LHEAD ’ S I M PLIED -C OVENANT C OUNTERCLA IM SURVIVES. Again, every contract contains an implied covenant of good faith and fair dealing. A nd again, t he implied covenant requires “‘a party in a contractual relationship to refrain from arbitrary or unreasonable conduct which has the effect of preventing the other p arty to the contract from receiving the fruits’ of the bargain.” 192 The implied covena nt allows a court to infer contractua l obligations “that neither party anticipated.” 193 A complainant must allege three elements to state a claim for breach of the implied covena nt: (1) a specific obligation implied in the contract; (2) a breach of that obligatio n; and (3) resulting damages. 194 190 D.I. 8; D.I. 10. 191 See Kronenb erg, 872 A.2d at 606 – 07 (“As a result, the parties to the LLC Agreement knew that the nature of any dispute among themselves would become public unless the dispute involved matters of such commercial or personal sensitivity as to justify placing the entire record under seal — an eventuality that is highly improbable when the dispute sim ply involves accusations of wrongdoing among business partners. ”) (emphasis added). 192 Dunlap, 878 A.2d at 442 (quoting Wilgus, 498 A.2d at 159). 193 CMS Inv. Holdings, LLC v. Castle, 2015 WL 3894021, at *15 (Del. Ch. June 23, 2015). 194 Fortis Advisors LLC v. Dialog Se miconductor P LC, 2015 WL 401371, at *3 (Del. Ch. Jan.

Courts will not infer an obligation exi sts that contrad i cts a clearly permissible exercise of an express contractual right. 195 And it is t he express contractual language that controls; not a part y ’s actions implementing a contract. 196 A court m ight ri ghtly infer an obligation “when the expre ss t erms of the contract indicate that t h e p arties would have agreed to the oblig atio n had they negotiated the issue, [so] the plaintiff must advance provisions of the agreement that sup port th i s fi nding in order to al lege s ufficiently a specific implied contractual o blig ation.” 197 But t he covenan t will no t b e employed to “infer language that contradicts a clear exerc ise of an express contractual right” or engage in “post contractua l rebalancing of the econom ic benefits flowing to the contracting parties.” 198 To reiterate, the covenant applies “o nly in that narrow band of cases where t he contract as a whole speaks sufficiently to suggest an obligation and point to a result, but d oes not speak d irectly en ough to provide an explici t answer. ” 199 30, 2015). 195 Nemec, 991 A.2d at 1127. 196 Id. at 1126. 197 Fitzgerald, 1998 WL 842316, at *1 (footnote omitted). 198 Nemec, 991 A.2d at 1127 – 28. 199 Airborne Health, 984 A.2d at 146.

1. The implied-covenant counterc laim cannot be based on pre-closing conduct. Steelhead’s c o untercl aim para g raph 107 sa y s “[t ]he A PA also included a n implied provision that Ms. Marcotte would not make false v erbal representations, concealments, or o mi ssions that would materially i mpac t St eelhe ad ’s decision on whether to acquire Jiggy.” 200 Acts that would impact Steelhead’s decision to enter into the APA would ha ve to arise pr e-APA. Jiggy asserts that an implied -cove nant claim cannot be based on pre- contract conduct. 201 Jiggy cites to the U nited States District Court for th e Distric t of Co lumbia case Intelsat USA Sale s Corporation v. Ju ch-Tech, I ncorporated. 202 Intelsat instructs: “ T he implied covenan t of good faith and fair dealing ‘relates only to the performance of obligations under an extant contract, and not to any pre- contract conduct.’” 203 In th e federal appeals court case Intelsat cites, the Second Circuit held that, un d er New Yor k law, an implied cove n ant relates o nly to the p erforman ce of obligations under an extant contract, and not any pre - contract cond uct. 204 200 Steelhead’s Countercl., at ¶ 107. 201 Jiggy Op. Br., 23. 202 24 F. Supp. 3d 32 (D.D.C. 2014). 203 Intelsat USA Sales Corp. v. Juch-Tech, In c., 24 F. Supp. 3d 32, 43 (D.D.C. 2014) (quoting Indep. Order of For esters v. Donald, L ufkin & Jenrette, Inc., 157 F.3d 933, 941 (2d Cir. 1998)). 204 Indep. Order of Foresters v. Donald, Lufkin & Jenrette, Inc., 157 F.3d 933, 941 (2d Cir. 1998).

While no Delaware case h as expressly said so, several other jurisdictions have expressed the rule t hat pre-c ontractual conduct ca nnot serve as the basis for an i mplie d-covenant cl aim. 205 “Particular fo rms of bad faith in bargaining are the subjects of rules as to capacity to contract, mu tual assent and consideration and of rules as to invalidating causes such as fraud and duress.” 206 A pplyi ng t hi s sensible rule, the Court finds that an actionable breach of the implied covenan t cannot be b ased on pre-contract conduct, since the contract had not y et existed. Thus, Jiggy’s motion for summary judgment is GRANTED to excise Steelhead’s Counterclaim allegat ion of a breach o f the implied covenant that is based wholly on pre-contract act ions. 207 2. Most of the remainder of the implied-covenant counterclaim is expressly covered by the APA an d the breach - of -contract counterclaim. The implied-covenant counterc l aim also asserts that the A PA i ncluded 205 RBS Citizens, Nat. Ass’n v. RTG -Oak L awn, LLC, 943 N.E.2d 198, 207 (Ill. App. Ct. 2011) (“The duty of good faith and fair dealing, however, does not arise out o f pre contractual actions and is only applicable to the conduct of parties to an existing contract.”); B onfield v. AAMCO Transmissions, Inc., 717 F. Supp. 589, 593 – 94 (N.D. I ll. 1989) (dismissing portion of implied- covenant claim where claim rested on precontractual negotiations); Terranova v. Terranova, 883 F. Supp. 1273, 1277 n.2 (W.D. Wis. 1995) (noting that, under both Wisconsin and California law, the implied covenant only extends to the performance of a contract and not precontractual negotiations); Contreras v. Master Fin., Inc., 2011 WL 325 13, at *3 (D. N ev. Jan. 4, 2011) (“[A]n implied covenant relates only to the p erformance of obligations under an extant contract, and not to any pre- contract conduct.”); see also Young v. A llstate Ins. Co., 198 P.3d 666, Hawai’i 403, 690 – 91 (2008) (indicating the covenant of good faith does not extend to activities before consummation of an insurance contract). 206 R ESTATEMENT (S ECOND) OF C ONTRACTS § 205 cmt. c (A.L.I. 1981). 207 Steelhead’s Countercl., at ¶ 107.

implied provisions that prohib ited “ [Ms. ] Marcotte from acceptin g further payments from customers for her personal benefit after the close of the acquisition” a nd “intentional ly attempt[i ng] to disrupt Jiggy’s profitability and long t erm success af ter the close of t h e acquisition fo r her own perso nal gain.” 208 Jiggy conten ds that these o bligatio n s are “c l early art iculated in t h e APA.” 209 “Where the questioned contract expressly addresses a particular matter, ‘an implied cove nant clai m respecting t h at matter i s duplicative a nd not viable.’” 210 Here, the APA required transfer of “all accounts or notes receivable held by Seller,” and “al l Contract s and other instruments... including s ale and purchase orders.” 211 And APA Section 2.1(d) provides that Seller “shall s ell, convey, assign, tra nsfer and deliver or cause to b e delivered, to Purchaser . . . all Transferred Technology, which, for the avoidance of doubt, i ncludes without limitation th e Technolo gy set forth o n Sc hedule 2.1(d).” 212 APA Section 2.1 expressly cover s the portion of the counterclaim that alleges that Ms. Marcotte breached the implied covenant by retaining and 208 Steelhead’s Countercl., at ¶¶ 105, 106. 209 Se e Jiggy Reply, 20. 210 Brightstar Corp. v. PCS Wireless, LLC, 2019 WL 3714917, at *11 (Del. Super. Ct. Aug. 7, 2019) (quoting Edinburgh Holdings, Inc. v. Education Affiliates, Inc., 2018 WL 2727542, at *9 (Del. Ch. June 6, 2018)). 211 APA §§ 2.1(a), (g). 212 Id. § 2.1(d).

depositing customer payments owed to Steelhead and failing to perform key transition responsibilities. 213 These facts support a breach- of -contract counterclaim, n ot a se parate implied-covenant counterclai m. As a result, Jiggy’s motion for summary judgment is G R ANTED to excise St eelhea d ’ s Counterclaim allegation at paragraph 105 because the APA breach- of -contr act counterclaim c o vers t h e transit ion obligations. The only r emaining part of the im p lied-covenant c ounterclaim i s the implied o bligat ion that Ms. Marcotte wouldn’t “intentionally attempt to disrupt Jiggy’s profitability and long term success after the close of the acquisition for her own personal ga in.” 214 In support, Jiggy point s to the fact that Ms. Marcotte advocated for initiatives that favored short -term revenue or her own earnout potential over the long -ter m health of the business, including proposals that would have resulted in negative margins. 215 This is a v alid implied -covena nt counterclaim that states an implied p rovision and is based on post -negotiation conduct. A reasonable factfinder could find that Ms. Marcotte took certain actions fo r her own p ersona l gain in violation of t he implied covenant that she not to favor herse lf over Jiggy’s long -term success. So summary judgm ent is 213 De fs.’ Opp’n, 31 – 32. 214 Stee lhead’s Countercl., at ¶ 106. 215 De fs.’ Opp’n, 32; B rzeczek Aff., at ¶¶ 28 – 32; Brzeczek Aff., Ex. 9 (D.I. 90).

DENIED as to this allegation su p porting Steelhea d ’s Implie d -Covenan t Counterclaim found at Paragraph 106. Accordingly, Jiggy’s motion for summary judgment o n Steelhea d’s implied-cove nant counterclaim is GRANTED in pa rt, and DENIED in p a rt. G. T HE D EFEND ANTS ’ A FFIRMATIVE D EFENSE S P RESENT A M I XED B AG OF P LEADING I SSUES T HAT CAN BE A DDRESSED T HROUGH P ROPER T RIAL I NSTRUCT IONS. 1. This Court doesn’t have jurisdiction ov er an unclean hands defense. The Superior Court “is a court of law and does n ot provide affirmative equitable relief as that jurisdiction l ies exclusivel y with the Delaware Court of Chancery.” 216 Delaware courts often recognize that laches and unclean hands are unavailable at law. 217 The reason is that such defenses answer only equita ble claims. 218 Therefore, Jiggy’s motion for summary judgment is GRANTED on th is affirmative defense because the Court doesn’t have jurisdiction over Affirmative Defense 9. 216 Av aya, In c. v. Charter Commc ’ ns Holding Co., LLC, 2015 WL 1975814, at *3 (Del. Super. Ct. May 1, 2015). 217 Dy ton v. Ahern, 2025 WL 3232911, at *7 (Del. Super. Ct. Nov. 19, 2025), reargument denied, 2025 WL 3496991 (Del. S uper. Ct. Dec. 5, 2025); see also Mine Saf ety Appliances Co. v. AIU Ins. Co., 2016 WL 498848, at *12 (Del. Super. Ct. Jan. 22, 2016) (“Laches is an equitable defense that is not available in the Superior Court, which is a court of law.”). 218 Dy ton, 2025 WL 323291 1, at *7.

1. But this Court has jurisdiction over the waiver and estoppel defense, and dismissing these defenses is generally inappropriat e at summary judgme nt. On the ot her hand, the Court has juri sdiction over the equitable defense o f waiver a nd estoppel. “Fo r instance, Superior Court Rule 8(c) includes waiver and estoppel as affirmative defenses.” 219 As a result, the Court has jurisdict ion over these defe ns es. Still, the Court may have o ccasi on to determine if these defenses have merit at summ ary judgment. 220 “‘Waiver is the voluntary and intentional relinquishment of a known right’ either conferred by sta t ute or sec u red by contract.” 221 “Estoppel depends on what a party caused another t o do, and involves an element o f reliance.” 222 Estoppel “‘arise s when, by its conduct, a party int enti onally or unintentionally leads another, in reliance o n that conduct, to change position to his detriment.’” 223 “‘The question of w aiver is normally a jury question, unless the facts are undisputed and give rise to only one reasonabl e 219 Id. 220 Se e Paragon Metal Holdings, LLC v. Smith, 2025 WL 524265, at *10 (Del. Super. Ct. Jan. 28, 2025) (noting, at sum mary judgment, that the defendant shoulders the burden to prove its affirmative defenses). 221 Roam -Tel P ’rs v. AT &T Mobilit y Wireless Operations Holdings Inc., 2010 WL 5276991, at *9 (Del. Ch. Dec. 17, 2010) (quoting Realty Growth Investors v. Council of Unit Owners, 453 A.2d 450, 456 (Del. 1982)). 222 Id. (citing D ONALD J. W O LFE AND M ICHAEL A. P ITTENGER. C ORPORATE AN D C OMME R CIAL P RACTICE IN THE D ELAWARE C OURT OF C HANCERY § 11.02, at 11 – 14 (2009)). 223 In re Coinmint, LLC, 261 A.3d 867, 894 (Del. Ch. 2021) (quoting Roa m- Tel P’rs, 2010 WL 5276991, at *9).

inference.’” 224 And “[u]nles s only one inference can be drawn from the evidence, the existence o f estoppel i s a q uestion to be determined by the t rier of fac t.” 225 Here, there are competing fraud and breach - of -contract claims amongst the parties. There are several material factual disputes. And these defenses involve these disputed questions of fact — such as, w hether Jiggy co mmitte d fraud in the lead up to the APA, if Ms. Marcotte knew about the al leged double- counting, o r if there was reas onable reliance by an y of t he parti es. T hus, J iggy’ s motion for summar y judgme nt is DENIED on Affirma tive Defense 18. 3. Denials of a claim’s elements a ren ’ t aff irmative defens es. Steelhead ’ s and Aestuary’ s affi rmative defen ses 2, 4, 14, 15, and 16 involve d enials of elements o f Jiggy’s claims. 226 “ A d enial of an el ement of a claim is not an affirmative de fense. ” 227 While these defenses shouldn’t be lis ted as affirmative defenses, Ji ggy still bears the burden to prove the elements 224 Spe cialty Dx Holdings, LLC v. Lab. Corp. of Am. Holdings, 2021 WL 6327369, at *10 (Del. Super. Ct. Dec. 16, 2021) (quoting Mergenthaler v. Hollingsworth Oil Co. Inc., 1995 WL 108883, at *2 (Del. Super. Feb. 22, 1995)); see also George v. Frank A. Robino, Inc., 334 A.2d 223, 224 (Del. 1975) (“ It is fo r the jury to say whether plainti ff ’ s conduct under the circumstances of this case evidenced an intentional, conscious and voluntary abandonment o f his claim or right.”). 225 De rvaes v. H.W. Booker Constr. Co., 1980 WL 333053, at *10 (Del. Super. Ct. May 28, 1980). 226 The listed affirmative defenses are injury caused by Plaintiff’s conduct, no injury from Defendant’s c onduct, absence of false representation, lack of intent to defr a ud, and abse nc e of reasonable reliance, respectfully. Aestuary’s Countercl. and Steelhead’s Countercl., 53 – 56. 227 Paragon M etal Hld gs., 2025 WL 524265, at *10 n.156.

addressed to prove its cl aim. These de nials will not be identified at trial as Affirmative Defenses 228 but the jury w ill be i nst ructe d on the elements of J i ggy ’s claims and Jiggy’s burden in proving those elements. So, in effect, Jiggy’s summary judgmen t motion on Steelhead’s and Aestuary’s id entif ication of affirmative defenses 2, 4, 14, 15, and 16 as such is GRANTED. But the p ractica l effect of that small victory is nil. 4. Justification isn’t a defense to breach of contract or fraud. Jiggy also moves fo r su mmary judgment on the Defendants’ affirmative defense of justification. 229 The Defendants don’t appear to respond to this, nor do they identify any rul e, caselaw, o r statute that says justification can be an affirmative defense to b reach of contract or civil fraud. 230 So such as it is, Jiggy’s motion for summar y judgment on Affirmative Defen se 7 is GRANTED. 5. The failure- to -plead -fraud-with-particu larity affirmative defen s e is mo o t. Finally, Jiggy lists t he Defendants’ Affirmative D efense 13 in its brief. 231 This Affirmative Def ense says that Jiggy failed to p lead fraud w ith particularity as required by Rule 9. 232 But the Defendants don’t argue that Jiggy’s fraud claim 228 Se e id. 229 Jiggy Op. Br., a t 26. 230 Se e Defs.’ Opp’n, at 34. 231 Jiggy Op. Br., a t 26. 232 Ae stuary’s Countercl. and S teelhead’s Countercl., at 55.

is invalid under Rule 9 — a pleading rather than t rial issue — in their motions for summary judgm ent. As such, at t his point the iss u e is moo t. V. CONCL USION For the foregoing reasons and in the manner expressly se t forth above, the Court: GRANTS, in part, and D ENIES, in part, Steelhead’s Motion for Partial Summary Judgment; DENI ES Aestuary’s Moti on for Partial Summary Judgment; and GR ANTS, i n part, a nd DENIES, i n part, Jiggy’ s Motio n for Partial Summar y Judgment. IT IS SO ORDE RED. / s / Paul R. Wallace ____________ _ _________ ______ Paul R. Wallace, Judge Original to Pr othonotary cc: All parties a nd Counsel o f Recor d