Case 2:21-cv-01810 Document 1 Filed 02/26/21 Page 1 of 17 Page ID #:1
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`
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`Laurence M. Rosen (SBN 219683)
`THE ROSEN LAW FIRM, P.A.
`355 South Grand Avenue, Suite 2450
`Los Angeles, CA 90071
`Telephone: (213) 785-2610
`Facsimile: (213) 226-4684
`Email: lrosen@rosenlegal.com
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`Counsel for Plaintiff
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`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
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`No.
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`CLASS ACTION COMPLAINT
`FOR VIOLATIONS OF THE
`FEDERAL SECURITIES
`LAWS
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`CLASS ACTION
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`JURY TRIAL DEMANDED
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`SHAWN LOPEZ, Individually and on
`behalf of all others similarly situated,
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`
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`Plaintiff,
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`v.
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`
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`AGEAGLE AERIAL SYSTEMS,
`INC., J. MICHAEL DROZD, NICOLE
`FERNANDEZ-MCGOVERN, BRET
`CHILCOTT and BARRETT
`MOONEY,
`
`
`Defendants.
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`Plaintiff Shawn Lopez (“Plaintiff”), individually and on behalf of all other
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`persons similarly situated, by Plaintiff’s undersigned attorneys, for Plaintiff’s
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`complaint against Defendants (defined below), alleges the following based upon
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`personal knowledge as to Plaintiff and Plaintiff’s own acts, and information and
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`belief as to all other matters, based upon, inter alia, the investigation conducted by
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`and through his attorneys, which included, among other things, a review of the
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`CLASS ACTION COMPLAINT FOR VIOLATIONS OF
`THE FEDERAL SECURITIES LAWS
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`Case 2:21-cv-01810 Document 1 Filed 02/26/21 Page 2 of 17 Page ID #:2
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`Defendants’ public documents, conference calls and announcements made by
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`Defendants, public filings, wire and press releases published by and regarding
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`AgEagle Aerial Systems, Inc. (“AgEagle” or the “Company”), and information
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`readily obtainable on the Internet. Plaintiff believes that substantial evidentiary
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`support will exist for the allegations set forth herein after a reasonable opportunity
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`for discovery.
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`NATURE OF THE ACTION
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`1.
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`This is a class action on behalf of persons or entities who purchased
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`or otherwise acquired publicly traded AgEagle securities between September 3,
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`2019 and February 18, 2021, inclusive (the “Class Period”). Plaintiff seeks to
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`recover compensable damages caused by Defendants’ violations of the federal
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`securities laws under the Securities Exchange Act of 1934 (the “Exchange Act”).
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`JURISDICTION AND VENUE
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`2.
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`The claims asserted herein arise under and pursuant to Sections 10(b)
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`and 20(a) of the Exchange Act (15 U.S.C. §§ 78j(b) and 78t(a)) and Rule 10b-5
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`promulgated thereunder by the SEC (17 C.F.R. § 240.10b-5).
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`3.
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`This Court has jurisdiction over the subject matter of this action
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`pursuant to 28 U.S.C. § 1331, and Section 27 of the Exchange Act (15 U.S.C.
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`§78aa).
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`4.
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`Venue is proper in this judicial district pursuant to 28 U.S.C. §
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`1391(b) and Section 27 of the Exchange Act (15 U.S.C. § 78aa(c)) as the alleged
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`misstatements entered and the subsequent damages took place in this judicial
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`district.
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`5.
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`In connection with the acts, conduct and other wrongs alleged in this
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`complaint, Defendants, directly or indirectly, used the means and instrumentalities
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`of interstate commerce, including but not limited to, the United States mails,
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`interstate telephone communications and the facilities of the national securities
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`exchange.
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`Case 2:21-cv-01810 Document 1 Filed 02/26/21 Page 3 of 17 Page ID #:3
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`PARTIES
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`6.
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`Plaintiff, as set forth in the accompanying certification, incorporated
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`by reference herein, purchased AgEagle securities during the Class Period and
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`was economically damaged thereby.
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`7.
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`Defendant AgEagle purports to be a commercial drone company.
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`According to AgEagle’s website, the Company is engaged in the design,
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`engineering, and manufacturing of commercial drones, as well as in providing
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`drone services and solutions to the agriculture industry. AgEagle is incorporated
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`in Nevada with its principal office located in Wichita, Kansas. AgEagle’s
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`common stock trades on the New York Stock Exchange (“NYSE”) under the
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`ticker symbol “UAVS.”
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`8.
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`Defendant J. Michael Drozd (“Drozd”) has served as the Company’s
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`Chief Executive Officer (“CEO”) since May 2020.
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`9.
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`Defendant Nicole Fernandez-McGovern (“Fernandez-McGovern”)
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`has served as the Company’s Chief Financial Officer (“CFO”) throughout the
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`Class Period.
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`10. Defendant Bret Chilcott (“Chilcott”) is the founder of the Company,
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`and served as the Company’s President and Executive Chairman of the Board of
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`Directors (“Board”) until May 2020.
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`11. Defendant Barrett Mooney (“Mooney”) served as the Company’s
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`CEO from the beginning of the Class Period until May 2020.
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`12. Defendants Drozd, Fernandez-McGovern, Chilcott and Mooney are
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`collectively referred to herein as the “Individual Defendants.”
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`13. Each of the Individual Defendants:
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`(a)
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`directly participated in the management of the Company;
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`(b) was directly involved in the day-to-day operations of the
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`Company at the highest levels;
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`Case 2:21-cv-01810 Document 1 Filed 02/26/21 Page 4 of 17 Page ID #:4
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`(c) was privy to confidential proprietary information concerning
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`the Company and its business and operations;
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`(d) was directly or indirectly involved in drafting, producing,
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`reviewing and/or disseminating the false and misleading statements
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`and information alleged herein;
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`(e) was directly or indirectly involved in the oversight or
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`implementation of the Company’s internal controls;
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`(f) was aware of or recklessly disregarded the fact that the false
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`and misleading statements were being issued concerning the
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`Company; and/or
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`(g)
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`approved or ratified these statements in violation of the federal
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`securities laws.
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`14. AgEagle is liable for the acts of the Individual Defendants and its
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`employees under the doctrine of respondeat superior and common law principles
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`of agency because all of the wrongful acts complained of herein were carried out
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`within the scope of their employment.
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`15. The scienter of the Individual Defendants and other employees and
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`agents of the Company is similarly imputed to AgEagle under respondeat
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`superior and agency principles.
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`16. Defendants AgEagle and the Individual Defendants are collectively
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`referred to herein as “Defendants.”
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`SUBSTANTIVE ALLEGATIONS
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`Materially False and Misleading Statements Issued During the Class Period
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`17. On September 3, 2019, AgEagle issued a press release entitled:
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`“AgEagle Enters the Fast-Growing Commercial Drone Package Delivery
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`Market.” The subtitle read: “Initial Purchase Orders Received and Testing
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`Underway.”
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`18. Quoting then-CEO Mooney, the press release stated, in pertinent part:
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`Case 2:21-cv-01810 Document 1 Filed 02/26/21 Page 5 of 17 Page ID #:5
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`“Over the past year, there has been a surge of prominent companies,
`including Alphabet (Google), FedEx, Intel, Qualcomm, Amazon,
`Target, Walmart, Alibaba, UPS, 7-Eleven, Uber and many others,
`actively developing commercial drone-delivery service initiatives as
`part of their long-term strategic plans. These companies intend to
`leverage the latest in unmanned aerial vehicle (UAV) technologies to
`deliver food, consumer products, medicines and other types of
`lightweight freight direct to consumers and businesses in the fastest,
`most cost efficient and environmentally responsible manner possible –
`a practical alternative to costly auto transport.”
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`“We have received our first purchase orders to manufacture and
`assemble UAVs designed to meet the critical specifications for
`drones that are meant to carry goods in urban and suburban areas.
`We look forward to providing greater detail in the near future on
`AgEagle’s plans to address the needs of this highly specialized new
`market and the specific role we expect to play in its ongoing
`development[.]”
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`(Emphasis added.)
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`19. On April 13, 2020, AgEagle filed its annual report on Form 10-K
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`with the SEC for the fiscal year ending on December 31, 2019 (the “2019 10-K”).
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`The 2019 10-K was signed by Defendants Mooney, Fernandez-McGovern and
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`Chilcott. Attached to the 2019 10-K were certifications pursuant to the Sarbanes-
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`Oxley Act of 2002 (“SOX”) signed by Defendants Mooney and Fernandez-
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`McGovern attesting to the accuracy of the financial statements and the disclosure
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`of all fraud. The 2019 10-K expanded on the September 3, 2019 press release by
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`specifying that the first purchase order was from “a major unnamed ecommerce
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`company,” stating in relevant part:
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`In September 2019, the Company announced that it was actively
`pursuing expansion opportunities within the Drone Logistics and
`Transportation market, and reported that it had received its first
`purchase order from a major unnamed ecommerce company to
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`Case 2:21-cv-01810 Document 1 Filed 02/26/21 Page 6 of 17 Page ID #:6
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`manufacture and assemble UAVs designed to meet the critical
`specifications for drones that are meant to carry goods in urban and
`suburban areas. AgEagle is currently working in close collaboration
`with this new customer on its tethered test flight operations and
`ongoing development. In association with the initial purchase order,
`AgEagle recorded its first revenues in the second half of 2019 and will
`recognize additional revenues from the project in the first quarter of
`2020.
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`(Emphasis added.)
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`20. On April 15, 2020, AgEagle issued a press release entitled: “AgEagle
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`Receives Follow-On Purchase Orders to Manufacture Commercial Drones for
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`Package Delivery.” The Company’s press release announced follow-on purchase
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`orders for its drones, stating in part:
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`“the expansion of scope for its contracted commercial drone work
`through the receipt of follow-on purchase orders from a major
`ecommerce company. Representing significant new revenue, the new
`purchase orders relate to the continued manufacturing and assembly
`of drones used for the testing and refining of the client’s commercial
`drone small package delivery vehicles, systems and operations
`currently in development.”
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`(Emphasis added.)
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`21. On April 29, 2020, news broke of a video posted on the personal
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`website and YouTube channel of Defendant Chilcott’s daughter. The video
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`showed how to safely unbox the drones, and included the logos of AgEagle and
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`Amazon side-by-side. Although the video was removed, various copies and
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`screenshots remain scattered across the Internet.
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`22. News of this video led to widespread speculation that AgEagle’s
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`“major unnamed ecommerce” partner was in fact Amazon, causing AgEagle stock
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`to skyrocket from an opening price of $0.95 on April 29, 2020 to as high as $5.15
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`in intraday trading on April 30, 2020.
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`Case 2:21-cv-01810 Document 1 Filed 02/26/21 Page 7 of 17 Page ID #:7
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`23. The mysterious video was not the only signal to investors that
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`AgEagle had partnered with Amazon to manufacture and assemble drones for the
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`delivery of consumer goods. On July 7, 2020, Defendant Drozd, the Company’s
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`new CEO, released a letter to shareholders announcing the Company’s expansion
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`to a facility in Wichita, Kansas. The letter stated in pertinent part: “With a goal of
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`materially increasing our manufacturing capacity and proficiencies, AgEagle has
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`finalized its decision to expand our drone-related operations to Wichita, Kansas.”
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`24. On August 4, 2020, AgEagle issued a news release announcing the
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`details of its new Wichita facility, a 12,000 square foot office and warehouse
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`space located at 8863 E. 34th Street North.
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`25. The rumor of a partnership between AgEagle and Amazon continued
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`to grow, with many pointing out the proximity between AgEagle’s new facility
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`and Amazon’s new distribution center. An August 4, 2020 article in the Wichita
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`Business Journal, for example, wrote that: “AgEagle’s new address is just down
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`Webb Road from Amazon’s future distribution center at 4044 N. Toben. There’s
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`been speculation of a partnership between the two companies given AgEagle’s
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`exploration into drone package delivery.”
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`26. An August 18, 2020 article from the same newspaper entitled
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`“AgEagle plans to begin move to Wichita next month” further reported: “The
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`company has been touting a ‘major e-commerce company’ since last year as a
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`significant source of future growth. It has been suspected that the client could be
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`Amazon and its pursuit of drone package delivery.”
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`27.
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`In a September 9, 2020 investor presentation filed with the SEC,
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`AgEagle continued to exploit the Amazon rumor for its own gain, claiming on the
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`introductory slide that “U.S.-based AgEagle will be a leading commercial drone
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`technology, services and solutions provider worldwide,” and on the very next
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`slide writing that “Amazon has taught the world to be impatient; people want
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`things faster and cheaper.”
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`Case 2:21-cv-01810 Document 1 Filed 02/26/21 Page 8 of 17 Page ID #:8
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`28. After feeding the rumor of a potential partnership with Amazon for
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`months – including but not only in the video that floated on the website with ties
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`to Defendant Chilcott – AgEagle attempted to hide behind a contractual non-
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`disclosure agreement in resisting calls to identify the ecommerce company with
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`which it had partnered.
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`29.
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`In the second quarter earnings call that took place in August of 2020,
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`and again in statements made to the press ahead of the third quarter earnings call
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`in October of 2020, CEO Michael Drozd insisted that he could not identify the
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`Company’s e-commerce partner.
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`30. The statements contained in ¶¶17-29 were materially false and/or
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`misleading because they misrepresented and failed to disclose the following
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`adverse facts pertaining to the Company’s business, operations and prospects,
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`which were known to Defendants or recklessly disregarded by them. Specifically,
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`Defendants made false and/or misleading statements and/or failed to disclose that:
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`(1) AgEagle did not have a partnership with Amazon and in fact never had any
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`relationship with Amazon; (2) rather than correct the public’s understanding about
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`a partnership with Amazon, Defendants were actively contributing to the rumor
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`that AgEagle had a partnership with Amazon; and (3) as a result, Defendants’
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`statements about AgEagle’s business, operations, and prospects, were materially
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`false and misleading and/or lacked a reasonable basis at all relevant times.
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`THE TRUTH BEGINS TO EMERGE
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`31. On October 14, 2020, news broke that Amazon did not have a
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`partnership agreement with AgEagle, and in fact never did. The Wichita Business
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`Journal published a story with the headline: “Exclusive: Who’s AgEagle’s big
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`customer? We now know who it’s not.” The article, which reported that AgEagle
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`was not partnering with Amazon, stated in part:
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`Case 2:21-cv-01810 Document 1 Filed 02/26/21 Page 9 of 17 Page ID #:9
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`Since AgEagle Aerial Systems announced its move to Wichita,
`speculation has swirled that it could be coming as part of a partnership
`with Amazon.
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`But the retail giant has put the rumor to rest, with a company
`spokesperson telling the WBJ there is no partnership and that
`Amazon, to date, has not worked with AgEagle in any capacity.
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`An AgEagle (NYSE: UAVS) spokesperson had no comment
`following the Amazon statement to the WBJ.
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`The drone company, which announced plans in July to relocate from
`Neodesha, has been touting a “major e-commerce customer” since last
`year as a growth driver but has said it can’t identify that customer due
`a confidentiality clause in its contract.
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`32. On February 18, 2021, Bonitas Research published a report revealing
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`that AgEagle “was a pump & dump scheme orchestrated by . . . AgEagle founder
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`and former chairman Bret Chilcott and other UAVS insiders to defraud US
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`investors.” The Bonitas Research report continued:
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`In April 2020 rumor of a partnership between Amazon.com, Inc.
`(“Amazon”, Nasdaq: AMZN) & AgEagle was started by a
`promotional video uploaded to AgEagle’s founder and former
`chairman Bret Chilcott’s daughter’s personal website and youtube
`account (the “Promo Video”). Since then, a 54 page due diligence
`document has circulated on Reddit which at various times referenced
`the Promo Video and suggested that the AgEagle’s partnership with
`Amazon was real.
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`We have found no evidence of any “major e-commerce customer” or
`any drone technology credited to AgEagle other than reference to the
`Promo Video leaked by AgEagle’s founder and former Chairman Bret
`Chilcott’s daughter.
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`In 4Q’20 an Amazon spokesperson disclosed to reporter Daniel
`McCoy of the Witchita Business Journal that Amazon specifically
`does not have any dealings with AgEagle whatsoever.
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`Case 2:21-cv-01810 Document 1 Filed 02/26/21 Page 10 of 17 Page ID #:10
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`33. On this news, shares of AgEagle, fell $5.13, or 36.4%, to close at
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`$8.96 on February 18, 2021, damaging investors.
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`34. As a result of Defendants’ wrongful acts and omissions, and the
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`precipitous decline in the market value of the Company’s common shares,
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`Plaintiff and other Class members have suffered significant losses and damages.
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`PLAINTIFF’S CLASS ACTION ALLEGATIONS
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`35. Plaintiff brings this action as a class action pursuant to Federal Rule
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`of Civil Procedure 23(a) and (b)(3) on behalf of a class consisting of all persons
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`other than Defendants who acquired AgEagle securities publicly traded on the
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`NYSE during the Class Period, and who were damaged thereby (the “Class”).
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`Excluded from the Class are Defendants, the officers and directors of AgEagle,
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`members of the Individual Defendants’ immediate families and their legal
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`representatives, heirs, successors or assigns and any entity in which Defendants
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`have or had a controlling interest.
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`36. The members of the Class are so numerous that joinder of all
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`members is impracticable. Throughout the Class Period, AgEagle securities were
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`actively traded on the NYSE. While the exact number of Class members is
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`unknown to Plaintiff at this time and can be ascertained only through appropriate
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`discovery, Plaintiff believes that there are hundreds, if not thousands of members
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`in the proposed Class.
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`37. Plaintiff’s claims are typical of the claims of the members of the
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`Class as all members of the Class are similarly affected by Defendants’ wrongful
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`conduct in violation of federal law that is complained of herein.
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`38. Plaintiff will fairly and adequately protect the interests of the
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`members of the Class and has retained counsel competent and experienced in class
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`action and securities litigation. Plaintiff has no interests antagonistic to or in
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`conflict with those of the Class.
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`CLASS ACTION COMPLAINT FOR VIOLATIONS OF
`THE FEDERAL SECURITIES LAWS
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`Case 2:21-cv-01810 Document 1 Filed 02/26/21 Page 11 of 17 Page ID #:11
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`39. Common questions of law and fact exist as to all members of the
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`Class and predominate over any questions solely affecting individual members of
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`the Class. Among the questions of law and fact common to the Class are:
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`•
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`whether the Exchange Act was violated by Defendants’ acts as
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`alleged herein;
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`•
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`whether statements made by Defendants to the investing public
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`during the Class Period misrepresented material facts about the financial condition
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`and business of AgEagle;
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`•
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`whether Defendants’ public statements to the investing public during
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`the Class Period omitted material facts necessary to make the statements made, in
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`light of the circumstances under which they were made, not misleading;
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`•
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`whether the Defendants caused AgEagle to issue false and misleading
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`filings during the Class Period;
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`•
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`whether Defendants acted knowingly or recklessly in issuing false
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`filings;
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`•
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`whether the prices of AgEagle securities during the Class Period
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`were artificially inflated because of the Defendants’ conduct complained of
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`herein; and
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`•
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`whether the members of the Class have sustained damages and, if so,
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`what is the proper measure of damages.
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`40. A class action is superior to all other available methods for the fair
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`and efficient adjudication of this controversy since joinder of all members is
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`impracticable. Furthermore, as the damages suffered by individual Class
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`members may be relatively small, the expense and burden of individual litigation
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`make it impossible for members of the Class to individually redress the wrongs
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`done to them. There will be no difficulty in the management of this action as a
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`class action.
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`CLASS ACTION COMPLAINT FOR VIOLATIONS OF
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`Case 2:21-cv-01810 Document 1 Filed 02/26/21 Page 12 of 17 Page ID #:12
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`41. Plaintiff will rely, in part, upon the presumption of reliance
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`established by the fraud-on-the-market doctrine in that:
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`AgEagle’s shares met the requirements for listing, and were listed
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`and actively traded on the NYSE, an efficient market;
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`•
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`As a public issuer, AgEagle filed periodic public reports;
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`AgEagle
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`regularly communicated with public
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`investors via
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`established market communication mechanisms, including through the regular
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`dissemination of press releases via major newswire services and through other
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`wide-ranging public disclosures, such as communications with the financial press
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`and other similar reporting services;
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`AgEagle’s securities were liquid and traded with sufficient volume
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`during the Class Period; and
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`AgEagle was followed by a number of securities analysts employed
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`by major brokerage firms who wrote reports that were widely distributed and
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`publicly available.
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`42. Based on the foregoing, the market for AgEagle securities promptly
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`digested current information regarding AgEagle from all publicly available
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`sources and reflected such information in the prices of the shares, and Plaintiff and
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`the members of the Class are entitled to a presumption of reliance upon the
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`integrity of the market.
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`43. Alternatively, Plaintiff and the members of the Class are entitled to
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`the presumption of reliance established by the Supreme Court in Affiliated Ute
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`Citizens of the State of Utah v. United States, 406 U.S. 128 (1972), as Defendants
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`omitted material information in their Class Period statements in violation of a duty
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`to disclose such information as detailed above.
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`11
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`CLASS ACTION COMPLAINT FOR VIOLATIONS OF
`THE FEDERAL SECURITIES LAWS
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`Case 2:21-cv-01810 Document 1 Filed 02/26/21 Page 13 of 17 Page ID #:13
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`COUNT I
`For Violations of Section 10(b) And Rule 10b-5 Promulgated Thereunder
`Against All Defendants
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`44. Plaintiff repeats and realleges each and every allegation contained
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`above as if fully set forth herein.
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`45. This Count is asserted against Defendants based upon Section 10(b)
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`of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder
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`by the SEC.
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`46. During the Class Period, Defendants, individually and in concert,
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`directly or indirectly, disseminated or approved the false statements specified
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`above, which they knew or deliberately disregarded were misleading in that they
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`contained misrepresentations and failed to disclose material facts necessary in
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`order to make the statements made, in light of the circumstances under which they
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`were made, not misleading.
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`47. Defendants violated §10(b) of the 1934 Act and Rule 10b-5 in that
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`they:
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`•
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`employed devices, schemes and artifices to defraud;
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`made untrue statements of material facts or omitted to state material
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`facts necessary in order to make the statements made, in light of the circumstances
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`under which they were made, not misleading; or
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`•
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`engaged in acts, practices and a course of business that operated as a
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`fraud or deceit upon Plaintiff and others similarly situated in connection with their
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`purchases of AgEagle securities during the Class Period.
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`48. Defendants acted with scienter in that they knew that the public
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`documents and statements issued or disseminated in the name of AgEagle were
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`materially false and misleading; knew that such statements or documents would
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`be issued or disseminated to the investing public; and knowingly and substantially
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`participated, or acquiesced in the issuance or dissemination of such statements or
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`12
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`CLASS ACTION COMPLAINT FOR VIOLATIONS OF
`THE FEDERAL SECURITIES LAWS
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`Case 2:21-cv-01810 Document 1 Filed 02/26/21 Page 14 of 17 Page ID #:14
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`documents as primary violations of the securities laws. These Defendants by
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`virtue of their receipt of information reflecting the true facts of AgEagle, their
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`control over, and/or receipt and/or modification of AgEagle’s allegedly materially
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`misleading statements, and/or their associations with the Company which made
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`them privy
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`to confidential proprietary
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`information concerning AgEagle,
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`participated in the fraudulent scheme alleged herein.
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`49.
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`Individual Defendants, who are the senior officers and/or directors of
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`the Company, had actual knowledge of the material omissions and/or the falsity of
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`the material statements set forth above, and intended to deceive Plaintiff and the
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`other members of the Class, or, in the alternative, acted with reckless disregard for
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`the truth when they failed to ascertain and disclose the true facts in the statements
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`made by them or other AgEagle personnel to members of the investing public,
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`including Plaintiff and the Class.
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`50. As a result of the foregoing, the market price of AgEagle securities
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`was artificially inflated during the Class Period. In ignorance of the falsity of
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`Defendants’ statements, Plaintiff and the other members of the Class relied on the
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`statements described above and/or the integrity of the market price of AgEagle
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`securities during the Class Period in purchasing AgEagle securities at prices that
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`were artificially inflated as a result of Defendants’ false and misleading
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`statements.
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`51. Had Plaintiff and the other members of the Class been aware that the
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`market price of AgEagle securities had been artificially and falsely inflated by
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`Defendants’ misleading statements and by the material adverse information which
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`Defendants did not disclose, they would not have purchased AgEagle securities at
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`the artificially inflated prices that they did, or at all.
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`52. As a result of the wrongful conduct alleged herein, Plaintiff and other
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`members of the Class have suffered damages in an amount to be established at
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`trial.
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`13
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`CLASS ACTION COMPLAINT FOR VIOLATIONS OF
`THE FEDERAL SECURITIES LAWS
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`Case 2:21-cv-01810 Document 1 Filed 02/26/21 Page 15 of 17 Page ID #:15
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`53. By reason of the foregoing, Defendants have violated Section 10(b)
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`of the 1934 Act and Rule 10b-5 promulgated thereunder and are liable to the
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`Plaintiff and the other members of the Class for substantial damages which they
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`suffered in connection with their purchase of AgEagle securities during the Class
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`Period.
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`COUNT II
`Violations of Section 20(a) of the Exchange Act
`Against the Individual Defendants
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`54. Plaintiff repeats and realleges each and every allegation contained in
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`the foregoing paragraphs as if fully set forth herein.
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`55. During the Class Period, the Individual Defendants participated in the
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`operation and management of AgEagle, and conducted and participated, directly
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`and indirectly, in the conduct of AgEagle’s business affairs. Because of their
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`senior positions, they knew the adverse non-public information about AgEagle’s
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`misstatement of revenue and profit and false financial statements.
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`56. As officers and/or directors of a publicly owned company, the
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`Individual Defendants had a duty to disseminate accurate and truthful information
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`with respect to AgEagle’s financial condition and results of operations, and to
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`correct promptly any public statements issued by AgEagle which had become
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`materially false or misleading.
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`57.
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` Because of their positions of control and authority as senior officers,
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`the Individual Defendants were able to, and did, control the contents of the
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`various reports, press releases and public filings which AgEagle disseminated in
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`the marketplace during the Class Period concerning AgEagle’s results of
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`operations. Throughout the Class Period, the Individual Defendants exercised
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`their power and authority to cause AgEagle to engage in the wrongful acts
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`complained of herein. The Individual Defendants therefore, were “controlling
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`persons” of AgEagle within the meaning of Section 20(a) of the Exchange Act. In
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`14
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`CLASS ACTION COMPLAINT FOR VIOLATIONS OF
`THE FEDERAL SECURITIES LAWS
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`Case 2:21-cv-01810 Document 1 Filed 02/26/21 Page 16 of 17 Page ID #:16
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`this capacity, they participated in the unlawful conduct alleged which artificially
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`inflated the market price of AgEagle securities.
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`58. By reason of the above conduct, the Individual Defendants are liable
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`pursuant to Section 20(a) of the Exchange Act for the violations committed by
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`AgEagle.
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`PRAYER FOR RELIEF
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`WHEREFORE, Plaintiff, on behalf of himself and the Class, prays for
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`judgment and relief as follows:
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`(a)
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`declaring this action to be a proper class action, designating plaintiff
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`as Lead Plaintiff and certifying plaintiff as a class representative under Rule 23 of
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`the Federal Rules of Civil Procedure and designating plaintiff’s counsel as Lead
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`Counsel;
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`(b)
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`awarding damages in favor of plaintiff and the other Class members
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`against all defendants, jointly and severally, together with interest thereon;
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`(c)
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`awarding plaintiff and the Class reasonable costs and expenses
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`incurred in this action, including counsel fees and expert fees; and
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`(d)
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`awarding plaintiff and other members of the Class such other and
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`further relief as the Court may deem just a