NOHO SERVES DEMAND LETTER TO GREENFIELD FARMS FOOD, INC.
FOR BREACH AND LIQUIDATED DAMAGES
Phoenix, AZ -- December 11, 2017 -- InvestorsHub NewsWire --
NOHO, Inc. (OTC
PINK: DRNK), a Wyoming corporation (the
"Company"), announced that it has served a demand letter
("Demand") to Greenfield Farms Food, Inc. ("GRAS") (USOTC:
GRAS), serving its CEO, Ron Heineman, notifying GRAS of its
intentional breach of the Asset Purchase Agreement dated June 7,
2017. See attached.
Pursuant to the Asset Purchase Agreement ("APA"), NOHO's wholly
owned subsidiary, Cherry Hill Financial, LLC, acquired 49% newly
issued common shares of GRAS, as well as, indefinite proxy over
1,000 Series D Preferred Shares giving NOHO voting control over
GRAS ("Proxy Shares"). NOHO wants to point out that the Proxy
Shares are owned by Ronald Heineman who personally signed the Asset
Purchase Agreement and tendered the Proxy Shares to NOHO. Thus, the
subsequent 8-K filed with the Securities and Exchange Commission on
December 1, 2017, was materially misleading because that action was
not authorized by NOHO.
On December 7, 2017, the Company sent a Demand Letter to Mr.
Heineman and the announced acquisition partner, Ngen Technologies
USA Corp. ("Ngen") that the disclosed transaction was in violation
of the Asset Purchase Agreement, and in violation of the 1934
Exchange Act as the unauthorized acquisition was intentionally and
materially leading. The Company's position is that Heineman's
course of conduct was purposeful and deliberate, subjecting the
Board of Directors and shareholders involved to potential personal
liability.
In response to GRAS' action, NOHO, Inc. CEO, David Mersky, said,
"We were taken by surprise at GRAS' announcement and the Company is
taking all appropriate actions to insure that the Ngen transaction
will not take place. The shares owned by NOHO are a significant
asset to the company and our shareholders and we will enforce our
rights to the fullest extent of the law." Since the closing was
completed on June 7, 2017, NOHO has carried the securities on its
Balance Sheet and now must reserve the shares until disposition of
this matter.
Update on DRNK
While the company has not issued press releases over the last
few months, CEO, David Mersky, indicated, "I am aware that the lack
of communication with our shareholders has been a genuine cause for
concern. I'd like to take this opportunity to advise our
shareholders and the public that operations for NOHO are very
active. I am engaged in positioning NOHO for the future and want to
assure our shareholders that we are looking forward to providing
updates on this process as they occur.
Mr. Mersky further provided, "It has been a lengthy process, but
I'd like to remind everyone that I took over NOHO by accepting 54
billion shares, conveying 90% of the common stock at that time.
Shortly thereafter, between converting all of my common stock to
preferred and then cancelling that class entirely, we reduced the
amount of shares to approximately 6 billion, before the conversion
of pre-existing notes. Today, the current shares outstanding is
approximately 9.2 billion, which was achieved without effecting as
reverse-split, as promised. The 25 billion authorized but unissued
shares must remain temporarily as a reserve for the remainder of
the convertible notes. Management believes these notes will not be
converted and will be handled in another manner. However, if in the
restructuring process, the company incorporates a plan, which
contemplates a reverse-split, I am announcing today that the
decision will be put to the shareholders for vote and I will
abstain from using the controlling preferred class B shares in that
event."
Sibannac, Inc. (USOTC:
SNNC)
In an effort to once again clarify the operations of SNNC, the
proposed name change to IMBUTEK has no effect on the assets or
interests of NOHO. No assets of NOHO were conveyed in the merger
transaction whatsoever and no assets were moved off of NOHO's
Balance Sheet.
Mr. Mersky continued, "While SNNC's business model has allowed
us to move forward and raise capital, I am committed to moving NOHO
forward into the future together and believe that our success will
continue to help restructure the company. However, despite the
total independence of the companies at this time, I look forward to
announcing a plan of operation that will benefit both companies as
we move into 2018. Sometimes it is necessary to work quietly while
this process takes place."
For additional information on NOHO please visit www.nohodrink.com and at www.instagram.com/nohodrink,
as well as at www.twitter.com/nohodrink.
Cautionary Note Regarding Forward-Looking Statements.
This press release contains statements that constitute
forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements
appear in a number of places in this release and include all
statements that are not statements of historical fact regarding the
intent, belief or current expectations of the Noho, Inc. (the
"Company"), its directors or its officers with respect to, among
other things: (i) financing plans; (ii) trends affecting its
financial condition or results of operations; (iii) growth
strategy and operating strategy. The words "may," "would,"
"will," "expect," "estimate," "can," "believe," "potential"
and similar expressions and variations thereof are intended to
identify forward-looking statements. Investors are cautioned
that any such forward-looking statements are not guarantees
of future performance and involve risks and uncertainties,
many of which are beyond the Company's ability to control, and
actual results may differ materially from those projected in the
forward looking statements as a result of various factors. You
should not place undue reliance on forward-looking statements since
they involve known and unknown risks, uncertainties and other
factors, which are, in some cases, beyond the Company's control and
which could, and likely will, materially affect actual results,
levels of activity, performance or achievements. The Company
assumes no obligation to publicly update or revise these
forward-looking statements for any reason, or to update the reasons
actual results could differ materially from those anticipated in
these forward-looking statements, even if new information becomes
available in the future. Important factors that could cause actual
results to differ materially from the company's expectations
include, but are not limited to, those factors that are disclosed
under the heading "Risk Factors" and elsewhere in documents filed
by the company from time to time with the United States Securities
and Exchange Commission and other regulatory authorities.
2907
Shelter Island Drive, Suite 105 • San Diego, CA 92106 •
619.300.6971. www.zouvaslaw.com
Investor/Media
Contact:
Mr. Clifford M. Rhee
Mr. Ronald Heineman
Greenfield Farms Food, Inc.
118 West 5th
Street
Covington, KY 41011
info@nohodrink.com
VIA FEDERAL EXPRESS AND ELECTRONIC
CORRESPONDENCE
Re: Demand for Issuance of Common Stock and Liquidated Damages
for Breach.
Dear Mssrs. Rhee and Heineman:
As you are aware, this firm represents NOHO, Inc. and its
subsidiary, Cherry Hill, Inc. (collectively hereinafter referred to
as the “Company and/or NOHO”). We are writing to convey to you our
demands as current bona-fide shareholders of Greenfield Farms Food,
Inc. (“GRAS”). GRAS is in default of its obligations to the Company
pursuant to the asset purchase agreement executed on June 7, 2017
(hereinafter referred to as the “APA”), and, on that basis, we
demand: (i) the immediate issuance of 49% of the Issued and
Outstanding Common Stock of GRAS as of the Closing Date of the APA;
and (ii) Assignment of the majority shareholder proxy (“Majority
Proxy”) as agreed pursuant to Section 6.4(c) of the APA, assigned
to David Mersky; and (iii) Retraction of the Press Release and 8-K
filed on December 1, 2017 as it was not authorized by the majority
shareholder; and (iv) Class D Preferred Stock is null and void
pursuant to Section 13 and Section of the Exchange Act; and payment
of $2,000,000.00; (and (v) waiver and release from all potential
claims arising from your gross negligence and multiple regulatory
violations as defined below (collectively referred to hereinafter
as the “Demand”).
Based on a review of the facts, neither Heineman nor Rhee has
the authorization from the majority shareholders of GRAS to take
any of the corporate actions memorialized in the 8-K filed on
December 1, 2017. Failure to comply with our Demand, will force us
to exhaust all available remedies, both in law and in equity, as
recourse for your refusal. To be clear, the extent of the recourse
available to the Company include, but are not limited to: (i)
filing a complaint with the Securities and Exchange Commission (the
“SEC”) and the Financial Industry Regulatory Authority (“FINRA”);
and (ii) filing a lawsuit against GRAS for contractual and punitive
damages, as well as attorneys’ fees, govern yourselves
accordingly.
The following is a brief summary of the basis for the
Demand.
a. Violation of Federal Securities Laws
i. Violation of FINRA Ban and Section 15 of the Exchange
Act
Subsequent the Closing of the APA on June 7, 2017, Mr. Heineman
ceased having any legal right to negotiate, take part in, and/or
sign any future agreement, but did so in the Letter of Intent
(“LOI”) between GRAS and Ngen Technologies USA Corp. dated
November 28, 2017. Heineman’s actions amount to gross recklessness
and disregard for any regulations or regulatory
authority.
As you are aware, the Securities Exchange Act of 1934 (the
“Exchange Act”) makes it unlawful for any person who is not
registered as a broker and/or dealer with the Securities and
Exchange Commission (the “SEC”) to effectuate, induce or attempt to
induce the purchase or sale of any security. Section 15(a) of the
Exchange Act provides:
“It shall be unlawful for any broker or dealer
which is either a person other than a natural person or a natural
person not associated with a broker or dealer which is a person
other than a natural person (other than such a broker or dealer
whose business is exclusively intrastate and who does not make use
of any facility of a national securities exchange) to make use of
the mails or any means or instrumentality of interstate commerce to
effect any transactions in, or to induce or attempt to
induce the purchase or sale of, any security (other than
an exempted security or commercial paper, bankers' acceptances, or
commercial bills) unless such broker or dealer is
registered in accordance with subsection (b) of this
section” (emphasis added).
The penalty for willfully violating the Exchange Act, for which
you are clearly culpable, is severe and can result in: (i) a
fine of up to Five Million
Dollars ($5,000,000); and (ii)
imprisonment for up to Twenty
Years (20 years) in a Federal penitentiary. Section
32(a) of the Exchange Act provides the following:
“Willful violations; false and misleading statements
Any person who willfully violates any provision of this title
(other than section 30A), or any rule or regulation thereunder the
violation of which is made unlawful or the observance of which is
required under the terms of this title, or any person who willfully
and knowingly makes, or causes to be made, any statement in any
application, report, or document required to be filed under this
title or any rule or regulation thereunder or any undertaking
contained in a registration statement as provided in subsection (d)
of section 15, or by any self-regulatory organization in connection
with an application for membership or participation therein or to
become associated with a member thereof, which statement was false
or misleading with respect to any material fact, shall upon
conviction be fined not more than
$5,000,000, or imprisoned not
more than 20 years, or both, except that when such
person is a person other than a natural person, a fine not
exceeding $25,000,000 may be imposed; but no person shall be
subject to imprisonment under this section for the violation of any
rule or regulation if he proves that he had no knowledge of such
rule or regulation.” See section 32(a) of the Securities Exchange
Act of 1934.
Given the significant sanctions that can be levied upon you both
for making false statements in the 8-K filed on December 1, 2017.
We will be forced to file a complaint with the SEC and FINRA if you
do not comply, and you will be personally liable for the derivative
shareholder lawsuit we are preparing to file.
A. Violation under Rule 13e-3
SEC Rule 13e-31 prohibits
issuers subject to the registration or reporting provisions of the
Exchange Act from taking certain actions without making certain
filings with the SEC and disseminating extensive information
to the issuer’s stockholders. You both failed to file the
Preliminary and Definitive 14C with the SEC and therefore any
actions filed on the Form 8-K are null and void by operation of
law.
1. Transactions to Which the Rule
Applies
SEC Rule 13e-3 governs several transactions by an issuer or
between an issuer and one or more of its affiliates (i.e., any
person directly controlling, controlled by, or under common control
with the issuer) that are intended to or may reasonably be expected
to result in one or more of the following: (A) causing any class of
equity securities of the issuer which is subject to 12(g) or
section 15(d) of the Exchange Act to be held of record by less than
300 persons; or (B) causing any class of equity securities of the
issuer which is either listed on a national securities exchange or
authorized to be quoted in an inter-dealer quotation system of a
registered national securities association to be neither listed on
any national securities exchange nor authorized to be quoted on an
inter-dealer quotation system of any registered national securities
association.
The rule applies to transactions which involve the purchase of
any equity security by its issuer or by an affiliate of the issuer;
a tender offer for an equity security by its issuer or by an
affiliate of the issuer; a proxy or consent solicitation or
distribution of information statements pursuant to Exchange Act
Regulations 14A or 14C with respect to a merger, consolidation,
reclassification, recapitalization, reorganization, sale of assets,
or similar types of transactions between an issuer (or its
subsidiaries) and any of its affiliates; and reverse stock splits
involving the purchase of fractional interests. The gross
recklessness of Mr. Heineman will undoubtedly allow the rightful
shareholders of GRAS to pierce the corporate veil and sue any and
all standing directors personally.
Mr. Heineman also committed violations of Sections 17(a)(2) and
17(a)(3) of the Securities Act. In the offer or sale of securities,
Section 17(a)(2) makes it unlawful “to obtain money or property by
means of any untrue statement of a material fact or any omission to
state a material fact necessary in order to make the statements
made, in light of the circumstances under which they were made, not
misleading;” and Section 17(a)(3) proscribes “any transaction,
practice, or course of business which operates or would operate as
a fraud or deceit upon the purchaser.” Violations of Section
17(a)(2) and 17(a)(3) may be established by a showing of
negligence. Aaron v. SEC, 446 U.S. 680, 697 (1980); SEC v. Glt.
Dain Rauscher, Inc., 254 F.3d 852, 856 (9th Cir. 2001).
B. Rule 10b-5 Anti-Fraud
SEC Rule 10b-5 requires full and accurate disclosure of all
material facts regarding the transaction and any corporation must
carefully abide by the requirements of this rule at all times when
effectuating any transaction involving the sale of
securities.
Rule 10b-5 is the principal anti-fraud provision in the federal
securities laws. Rule 10b-5 provides:
“shall be unlawful for any person, directly or indirectly, by
the use of any means or instrumentality of interstate commerce, or
of the mails or of any facility of any national securities
exchange,
a. To employ any device, scheme, or artifice to
defraud,
b. To make any untrue statement of a material fact or to omit to
state a material fact necessary in order to make the statements
made, in the light of the circumstances under which they were made,
not misleading, or
c. To engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon any
person, in connection with the purchase or sale of any
security.”
To prove securities fraud under Rule 10b-5, a plaintiff must
establish the following: (1) material misrepresentation or omission
by the defendant; (2) intent to defraud or recklessness; (3) a
connection between the misrepresentation or omission and the
purchase or sale of a security; (4) reliance upon the
misrepresentation or omission (transaction causation); (5) economic
loss; and (6) loss causation. In this case, you both have clearly
committed fraud because: (i) GRAS made a material misrepresentation
as to the status of the APA; and (ii) you both had the intent to
defraud because you decided to ignore the Asset Purchase Agreement
which Heineman executed and then filed an 8-K announcing an
unauthorized LOI Between GRAS and Ngen; (iii) the misrepresentation
by Heineman was made as an inducement for the Ngen to purchase the
securities of GRAS; (iv) the Company relied upon the
misrepresentation from GRAS as inducement to enter into the Merger
transaction; (v) the Company suffered substantial economic loss in
the form of loss of investment capital needed for operations,
enhanced regulatory and accounting costs, loss of goodwill, equity
dilution, declines in share price, and the loss of good will as a
result of GRAS’s fraud; and (vi) these losses are attributable to
the fraudulent actions of you both.
The penalty for willfully violating the Securities Act, for
which you are clearly culpable, is severe and can result in: (i) a
fine; and (ii)
imprisonment for up to Twenty
Five Years (25 years) in a Federal penitentiary. 18
USC § 1346(2) of the Securities Act of 1933 (the “Securities Act”)
provides the following:
“Whoever knowingly executes, or attempts to execute, a scheme or
artifice …
(2) to obtain, by means of false or
fraudulent pretenses, representations, or
promises, any money or property in connection with the purchase or
sale of any commodity for future delivery, or any option on a
commodity for future delivery, or any security of
an issuer with a class of securities registered under section 12 of
the Securities Exchange Act of 1934 (15 U.S.C. 78l) or that is required to file reports
under section 15(d) of the Securities Exchange Act of 1934
(15 U.S.C. 78o (d));
shall be fined under this title, or imprisoned
not more than 25 years, or both” (emphasis added).
See 18 USC § 1346(2).
Given the significant sanctions that can be levied upon you and
GRAS, it is advisable that you comply with the Demand or we will be
forced to file a complaint with the SEC and FINRA. If you do not
comply, you will be at risk of potential imprisonment and the
imposition of monetary sanctions.
Our complaint against you will charge you with failing to
disclose material facts to all shareholders and intentional
misrepresentation, and failing to maintain physical possession or
control of securities. We will seek appropriate injunctive relief,
damages, costs and possible attorneys’ fees, together with any and
all possible available remedies, such causes of action will include
the violations discussed above, but may also include:
1. Violations of the Sherman Act, 15 U.S.C. § 1 -
Conspiracy to Restrain Trade – We believe that you have
engaged in concerted action with others and that this concerted
action produced anticompetitive effects with respect to NOHO’s
stock and geographic markets; and
2. Unjust Enrichment – We will allege that you
were enriched by your illegal practices and that our client
suffered in the amount that you profited from the shares you naked
shorted and that there was no justification for this conduct;
and
3. Conversion – our client had a property
interest in its own stock and the right to issue stock, further our
client had a right to possession of the shares of its own stock
that you illegally sold. Accordingly, our client suffered damages
as a result of your illegal conversion; and
4. Deceptive Trade Practices – we will be able
to prove that, in the course of your business you passed off our
client’s stock as your own, caused a likelihood of confusion or of
misunderstanding as to the source, sponsorship, approval, or
certification of the goods, caused a likelihood of confusion or of
misunderstanding as to filiation, connection, association with, or
certification by our client, used deceptive representations or
designations of geographic origin in connection with goods,
represented that goods had the sponsorship and/or approval of our
client, and that you had quantities of our client’s stock that you
did not have, that you advertised goods with intent not to sell
them as advertised, that you advertised goods with intent not to
supply reasonably expectable public demand and that this willful
conduct created a likelihood of confusion and/or misunderstanding;
and
5. Civil Conspiracy - a confederation or
combination of two or more persons and or entities, including you
engaged in the unlawful acts described in the preceding paragraphs,
this conduct was done in furtherance of a conspiracy to harm our
client in the ways described in the preceding paragraphs, and with
the goal of driving down our client’s stock price so that the you
and your conspirators would profit through selling. Our client
suffered actual damage as a result of the conspiracy; and
6. Negligence – at all relevant times, you
breached the duty of care you owed to the company, individual
shareholders and the public to employ reasonable means and
practices to ensure that trade transactions conducted on their own
behalf or on behalf of third parties were not conducted for the
purpose of, or which it is reasonable to foresee may or will have
had the result of, improperly, deceptively, or fraudulently
manipulating the market price of our client’s stock or presenting
false or misleading information concerning the price, actual
trading activity and/or trading and/or failures to deliver
securities. All representation you have made regarding our client’s
stock were made intentionally and/or negligently and were
materially false and misleading; and
7. Fraud – you knowingly defrauded the Company,
the shareholders and the public by manipulating the price of the
shares in the marketplace through the practice of illegally selling
the shares without consent; and
8. Civil RICO 18 U.S.C § 1962 – we believe that
you have acted with others as an enterprise engaged in and whose
activities were fraudulent and otherwise illegal and otherwise
effecting interstate commerce. During the course of the underlying
transaction, you and others devised a scheme and artifice to
defraud and mislead the public through illegal stock market
manipulation. The sole purpose of this enterprise was to create
illegally obtained profits. At all times, you knew your conduct was
illegal and in connection with this conduct utilized interstate
commerce, the internet and interstate phone services. Under this
statute, we would be able to recover triple damages in addition to
attorney’s fees.
Our claims against you also involve conversion or misuse of
customer funds, misuse of customer securities, as well as failure
to maintain possession or control of fully paid securities. We
believe and can prove that you have misused customers’ fully-paid
securities by selling shares without the customer’s
knowledge.
Based on our research we believe your potential exposure
to damages could easily be upward of $10,000,000.00, not including
attorney’s fees and likely punitive damages.
Please feel free to contact me by e-mail at lzouvas@zouvaslaw.com or by
telephone at (619) 300-6971 in case you have any additional
questions or comments regarding this matter. We look forward to
hearing from you and resolving this matter amicably and
expeditiously.
Regards,
Luke C. Zouvas, Esq.
NoHo (PK) (USOTC:DRNK)
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