NATURE OF THE ACTION
1. This is a securities fraud action brought on behalf of 26 investors described
below, who were issued promissory notes with attached warrants (the “Notes” and the
“Warrants” respectively) by Infotopia, Inc. (“IFTP” or the “Company”) and who exercised the
Warrants and obtained IFTP common stock by surrendering the Notes. The issuance of the
Notes and Warrants and the issuance of the common stock on exercise of the Warrants violated
various provisions of federal and state securities laws. Moreover, each of these transactions was
induced by a series of materially false and misleading representations and omissions in violation
of state and federal antifraud laws.
2. The Defendants herein named either knew or recklessly disregarded the facts that
the misrepresentations and omissions described below were false and misleading and that the
truth, if revealed, would adversely affect the integrity of the market for IFTP common stock.
cle-680445.1
442615v1
08/23/01 09:58
5
JURISDICTION AND VENUE
3. Plaintiffs bring this action pursuant to Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. §§ 78j(b) and 78t(a), and Rule 10b-5
promulgated thereunder, 17 C.F.R. § 240.10b-5.
4. This Court has jurisdiction of this action pursuant to Section 27 of the Exchange
Act, and 28 U.S.C. §§ 1331 and 1337.
5. Venue is proper in this District pursuant to Section 27 of the Exchange Act, and
28 U.S.C. § 1391(b) and (c). IFTP maintains its corporate headquarters and executive offices
within this District, at 3635 Boardman-Canfield Road, Ohio 44406.
6. In connection with the acts and conduct alleged in this Complaint, defendants,
directly and indirectly, used the means and instrumentalities of interstate commerce, including
the mails and telephone communication systems.
PARTIES
7. Renald and Catherine Anelle reside at 25 Rollingview Lane, Fallbrook,
California.
8. Sudhir Athni resides at 440 Charter Blvd., Macon, Georgia.
9. George Bally resides at 55 North Dean St., Englewood, New Jersey.
10. Bradley Barnes resides at 739 Hanover Way, Lakeland, Florida.
11. Avi Bitton resides at 1231 51st St., Brooklyn, New York.
12. Louis Cimino resides at 2461 Santa Monica Blvd., Santa Monica, California.
13. Robert and Pauline Doyon reside at P.O. Box 841, Venice, Florida.
14. Irwin Finch resides at 134 Wood Dale Drive, Ballston Lake, New York.
15. Jose Garcia, Sr. resides at 3158 North Bay Road, Miami, Florida.
cle-680445.1
442615v1
08/23/01 09:58
6
16. Elisa & Michael Giordano reside at 7841 NW 46th St., Lauderhill, Florida.
17. Michael Giordano resides 4872 NW 124th Way, Coral Springs, Florida.
18. Paul Giordano resides at 305 East 95th Street, New York, New York.
19. Ernie Goldberger resides at 1556 S. Glenville Dr., Los Angeles, California.
20. Sam Goldberger resides at 1556 S. Glenville Dr., Los Angeles California.
21. Arno Hausman resides at 185 Youngs Rd., Mahwah, New Jersey.
22. Craig Horton resides at 1807 O’Neal Circle, Vidalia, Georgia.
23. Terry Johnson resides at 1520 Bonita Lane, Naples, Florida.
24. Ira Kalfus resides 317 West 89th St., New York, New York.
25. Magnum Opus Capital, Inc. is a Delaware corporation with its principal place of
business at 740 South Federal Highway, Pompano Beach, Florida.
26. Med All Company is a Florida corporation with its principal place of business at
2260 SW 8th St., Miami, Florida.
27. Med-One Rehabilitation Center Inc. is a Florida corporation with its principal
place of business at 900 West 49th St., Hialeah, Florida.
28. Richard Parlante resides at 5060 8th Avenue, SW, Naples, Florida.
29. Anthony Ricigliano resides at 215 West End Ave., Massapequa, New York.
30. Rex Shuette resides at 3953 Fern Brook, Blairsville, Georgia.
31. Carlos Vasquez resides 115 Woodycrest, Bronx, New York.
32. Aizik Wolf resides at 5000 University Drive, Coral Gables, Florida.
33. Upon information and belief, IFTP is a Nevada corporation with its principal
place of business at 3635 Boardman-Canfield Road, Ohio 44406 Canfield, Ohio.
cle-680445.1
442615v1
08/23/01 09:58
7
34. Upon information and belief, Daniel Hoyng is and at all times relevant hereto was
IFTP’s chief executive officer and chairman of the board of directors and resides at 3988
Fairway Drive, Canfield, Ohio.
35. Upon information and belief, Ernest Zavoral is and at all times relevant hereto
was IFTP’s president and a director and resides at 211 Dartmouth Avenue, Canfield, Ohio.
36. Upon information and belief, Marek Lozowicki is and at all times relevant hereto
was IFTP’s Senior Vice President and a member of the board of directors and resides at 91 Pine
Cove Drive, Canfield, Ohio.
37. Upon information and belief, Clinton Smith is and at all times relevant hereto was
a director of IFTP and resides 5167 Roch Avenue, New Orleans, Louisiana.
38. The defendants named in paragraphs 34 -37 above will be referred to as the
“Individual Defendants.”
39. Because of the Individual Defendants’ positions with the Company, they had
access to the adverse undisclosed information about its financial condition and performance,
growth, operations, financial statements, business, products, markets, management, revenues,
earnings, cash positions and present and future business prospects via access to internal corporate
documents (including the Company’s operating plans, budgets and forecasts and reports of actual
operations compared thereto), conversations and connections with other corporate officers and
employees, attendance at management and/or Board of Directors meetings and committees
thereof and via reports and other information provided to them in connection therewith.
40. It is appropriate to treat the Individual Defendants as a group for pleading
purposes and to presume that the false, misleading and incomplete information conveyed in the
Company’s public filings, press releases and other publications as alleged herein are the
cle-680445.1
442615v1
08/23/01 09:58
8
collective actions of the narrowly defined group of defendants identified above. Each of the
above officers and/or directors of IFTP, by virtue of their high- level positions with the Company,
directly participated in the management of the Company, was directly involved in the day-to-day
operations of the Company at the highest levels and was privy to confidential proprietary
information concerning the Company and its business, operations, products, growth, financial
statements, and financial condition, as alleged herein. Said Individual Defendants were involved
in drafting, producing, reviewing and/or disseminating the false and misleading statements and
information alleged herein, were aware or recklessly disregarded that the false and misleading
statements were being issued regarding the Company, and approved or ratified these statements,
in violation of the federal securities laws.
41. As officers and/or directors and controlling persons of a publicly held company
whose common stock was registered with the SEC pursuant to the Exchange Act, traded over the
counter, and governed by the provisions of the federal securities laws, the Individual Defendants
each had a duty to disseminate promptly, accurate and truthful information with respect to the
Company’s financial condition and performance, growth, operations, financial statements,
business, products, markets, management, revenues, earnings, cash positions and present and
future business prospects, and to correct any previously issued statements that had become
materially misleading or untrue, so that the market price of the Company’s common stock would
be based upon truthful and accurate information. The Individual Defendants’ misrepresentations
and omissions alleged herein violated these specific requirements and obligations.
42. The Individual Defendants participated in the drafting, preparation, and/or
approval of the various public statements and communications complained of herein and were
aware of, or recklessly disregarded, the misstatements contained therein and omissions
cle-680445.1
442615v1
08/23/01 09:58
9
therefrom, and were aware of their materially false and misleading nature. Because of their
Board membership and/or executive and managerial positions with IFTP, each of the Individual
Defendants had access to the adverse undisclosed information about IFTP’s financial condition
and performance, growth, operations, financial statements, business, products, markets,
management, revenues, earnings, cash positions and present and future business prospects as
particularized herein and knew (or recklessly disregarded) that these adverse facts rendered the
positive representations made by or about IFTP and its business issued or adopted by the
Company materially false and misleading.
43. The Individual Defendants, because of their positions of control and authority as
officers and/or directors of the Company, were able to and did control the content of the various
SEC filings, press releases and other public statements pertaining to the Company alleged herein.
Each Individual Defendant was provided with copies of the documents alleged herein to be
misleading prior to or shortly after their issuance and/or had the ability and/or opportunity to
prevent their issuance or cause them to be corrected. Accordingly, each of the Individual
Defendants is responsible for the accuracy of the public reports and releases detailed herein and
is therefore primarily liable for the representations contained therein.
44. Each of the defendants is liable as a participant in a fraudulent scheme and course
of business that operated as a fraud or deceit on Plaintiffs by disseminating materially false and
misleading statements and/or concealing material adverse facts. The scheme: (i) deceived the
Plaintiffs regarding IFTP’s financial condition and performance, growth, operations, financial
statements, business, products, markets, management, revenues, earnings, cash positions and
present and future business prospects and the intrinsic value of IFTP common stock; and (ii)
caused Plaintiffs to purchase IFTP securities at artificially inflated prices by inducing them to
cle-680445.1
442615v1
08/23/01 09:58
10
surrender the ir Notes and exercise their Warrants in return for IFTP stock at $.08 per share and
$.50 per share. |
