24. On or about December 28, 2020, the Plaintiff exercised its Common Stock Purchase Warrant, which was also acquired from the Defendants, and issued an Exercise Notice to the Defendants. See Common Stock Warrant, dated January 11, 2019 (hereinafter the “Warrant”), as attached, restated and incorporated by reference herein as Exhibit 5; see also, Auctus Fund, LLC’s Warrant Exercise Notice, dated December 28, 2020, as attached, restated and incorporated by reference herein as Exhibit 6.
25. Under the terms of the Warrant, the “exercise price” of the OPTI shares was upon a formula, on a per share basis, and as provided by the Warrant (hereinafter the “Exercise Price”). See Warrant (Exhibit 5), at p.1. Thus, for the Plaintiff’s exercise of the Warrants to make economic sense for Auctus and be an appropriate investment strategy for the Plaintiff, the price shares of OPTI had to be “in the money,” i.e., the shares traded in the public securities markets at a price above the Exercise Price.
26. In or about late December 2020, the Defendants refused to honor the Exercise Notice of the Plaintiff and refused to issue shares of common stock to Auctus in accordance with the terms and conditions of the Warrants.
27. In or about February 2021, the price of OPTI shares exceeded the Exercise Price in the Plaintiff’s Warrant, and were in the money. Indeed, on or about February 11, 2021, the price of OPTI shares traded at a high of $0.44 per share, and the Defendants’ refusal to honor the Plaintiff’s Warrant caused substantial lost opportunity and lost profits for Auctus.
28. Thereafter, between in or about late February 2021 and to the present date, the price of OPTI shares has declined substantially, causing such Warrant of the Plaintiff to be “under water,” or at a price which does not make economic sense for the Plaintiff to exercise the same. Indeed, on or about September 7, 2021, OPTI shares have recently traded on a range of approximately $0.0355 per share, to approximately $0.0445 per share, on volume of approximately 21,354,291 shares for that day.
29. In sum, the Defendants have committed federal and state securities fraud, unfair and deceptive trade practices, and has perpetrated a fraud and deceit upon the Plaintiff, which suffered as a consequence. Throughout, the Defendants have been unjustly enriched and converted the Plaintiff’s assets, causing it to suffer further damages and injuries. As a result of the fraudulent scheme, actions, concealment, and omissions of the Defendants, the Plaintiff lost substantial profits and lost opportunity in the refusal of the Defendants to honor the Warrant, to issue shares of OPTI or to permit the exercise of the Plaintiff’s Warrant.
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